FamilyCare Health to OHA: Stop putting the state at risk

Portland, OR – March 21, 2016 – FamilyCare Health is ready to settle its dispute with the Oregon Health Authority (OHA) today with a proposal that meets CMS requirements and saves the state from losing over $500 million in federal funds without costing the state anything. Today’s proposal is in response to OHA’s unnecessary and disruptive actions of last week, which left more than 130,000 individuals in the tri-county wondering about the future availability of their health care.

At its meeting with the OHA last Monday, FamilyCare offered to jointly meet with OHA and CMS to review FamilyCare’s long standing proposal to end the disagreement over payment rates. During the meeting, it became clear that, even if CMS approved FamilyCare’s prior proposal, OHA would have additional objections, although OHA would not reveal what those were. OHA also terminated mediation efforts.

Following the meeting, OHA called FamilyCare and said it was working on a reformulation of FamilyCare’s proposal in conjunction with its actuaries to jointly present to CMS. OHA did not provide a reformulated proposal as promised. Instead, it delivered a new proposal, demanding that FamilyCare agree in advance to rates for 2017 and 2018 before they have been developed. OHA also proposed to pay FamilyCare a lump sum payment of $12 million from the State general fund. OHA’s new proposal also required FamilyCare to agree to an unspecified clawback amount for 2015. Finally, FamilyCare would have to agree to accept 2016 rates that are not actuarially sound and give up its right to challenge the rates for 2016, 2017, and 2018.

Contrary to OHA’s statements that FamilyCare’s prior proposal is inconsistent with CMS-approved rates, FamilyCare received confirmation from PricewaterhouseCoopers that the proposal is “consistent with the approved rate ranges” as required by CMS’s February 24, 2016 letter to OHA. As such, FamilyCare’s prior proposal would have allowed OHA to avoid a loss of over $500 million in matching federal funds.

The same is true of FamilyCare’s new proposal as well. It proposes rates within the CMS-approved rate ranges and would allow OHA to obtain full federal funding to avoid the projected $500 million loss. And the current proposal employs exactly the same rate methodology adopted by OHA.

FamilyCare’s new proposal would require FamilyCare to repay OHA $47.3 million for 2015. Although FamilyCare’s rates for 2016 would be increased for the ACA population, the increase would be fully funded by the federal government and have no impact on the State general fund. Under the current 2016 OHA rates, FamilyCare expects to incur a loss of $31.6 million. The expected 2016 loss has been confirmed by Milliman, an independent actuarial firm. To FamilyCare’s knowledge, no other CCO is projecting a loss for 2016, based on their OHA rates.

OHA also has asserted that FamilyCare is requesting to be treated differently. FamilyCare has repeatedly requested to be treated the same. FamilyCare took the largest rate hit in the state in 2015. OHA’s revised 2015 rates for FamilyCare are $129 million less than FamilyCare’s 2014 rates. By contrast, the other tri-county Coordinated Care Organization received a $10 million increase from OHA over the two year period. Under today’s proposal, FamilyCare’s payment rates for the ACA population are still less than the other tri-county CCO, amounting to approximately $46 million less for 2015 and $32 million less in 2016.

FamilyCare has operated in good faith to reach a resolution, but OHA has consistently thrown up barriers and refused to provide information.

FamilyCare has been in business for more than 30 years, has exceeded the state’s incentive metrics for the past two years, and has been designated a top workplace for the past four years. OHA’s actions have had and will continue to have a negative impact on thousands of members, providers, staff, and community programs.

OHA has a fair proposal in front of them and they’re putting the state at financial risk every day they don’t act on it.

About FamilyCare Health
For 30 + years, FamilyCare Health has been providing patient-centered healthcare to Oregonians. With over 130,000 members, FamilyCare Health is a Medicare and Medicaid managed care organization providing health plan services in Multnomah, Clackamas, Washington and some parts of Marion counties. FamilyCare was the first health plan in Oregon to integrate models of physical and mental health. It was the first Coordinated Care Organization in the tri‐county area certified by the Oregon Health Authority. More information at