Concerns about CCO 2.0 brought up in senate committee

Last month, former Gov. John Kitzhaber raised concerns about the direction coordinated care organizations are headed when he spoke at the 2019 Oregon State of Reform Health Policy Conference.

Kitzhaber was the leading force behind the establishment of coordinated care organizations (CCOs) in 2012 when he was governor. With the current CCO contracts set to expire at the end of December, the Oregon Health Authority (OHA) is now in the midst of preparing for the next iteration of CCO contracts, referred to as “CCO 2.0.”

It is these new contracts, and the direction they are pushing CCOs, where Kitzhaber sees a problem.


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During his remarks at the State of Reform conference, Kitzhaber noted a lack of vision for the next five years of CCOs, and recommended legislators press the “pause button” to re-evaluate the trajectory of where CCOs are headed.

One key issue Kitzhaber says need to be reevaluated is the administrative burden being placed on CCOs. Previously, there were about 60 different administrative rules and regulations, but that number has jumped to about 200 with the new CCO contracts, he says. Kitzhaber says there isn’t clarity about the purpose of those rules. 

“If I were to advise the legislature, I think it would be worthwhile at least to put a pause button on for a moment – not on the contract process, but in the sheer volume of the rules and regulations. And say, what is the policy? Do we still embrace the direction we set up 5 years ago? And if not, how has it changed? And then, what are the problems that we face in getting there? And then how do these rules and regulations and civil penalties get us there?

It seems to me that taking a month or so to actually answer those questions would alleviate a lot of the concern, a lot of the confusion, and put us in a better place to move this to the next level,” said Kitzhaber. 

The result of these rules, according to Kitzhaber, is that there is less ability for individualization and a loss in the “local flavor” of individual CCOs.

“It’s not clear to me where the current administration wants the CCOs to be 5 years from now. It appears from the outside that they’re moving away from a local, community-based, innovative, collaborative partnership between the agency and the coordinated care organizations, to a much more regulatory, punitive insurance model,” said Kitzhaber.

“The fact of the matter is health occurs at the local level with a provider and an individual. It is local. And I do think the “secret sauce” of the coordinated care organizations is that local flavor, that engagement, that sense of ownership by the local community.”

Kitzhaber’s comments have had an impact.

His remarks at the State of Reform Conference were reported on by Lund Report editor-in-chief Lynne Terry, and were featured in a piece by the Portland Business Journal. 

Though Kitzhaber wasn’t mentioned by name, many of his concerns were also the topic of discussion at a recent Senate Interim Committee on Health Care meeting. At the meeting, senators pressed Oregon Health Authority Director Pat Allen on a number of issues related to CCO 2.0. 

Before jumping in to address questions provided by the committee, Allen commented on the importance of CCO 2.0, the challenges OHA is trying to tackle, and the notion that the process should slow down. 

“One of the messages that we’re really getting pretty consistently is that we should slow this whole thing down and not move so quickly,” said Allen. “When we think about ‘slow down’ I think we really need to think in terms of the million members on the Oregon Health Plan and what we’re trying to deliver with CCO 2.0. And the idea that 2.0 really is a higher bar and a higher level of accountability and a higher level of transparency and clarity so that we can manage these kinds of processes and hold CCOs accountable to doing the job that I know they’re capable of doing and managing that care.”

In their list of questions, the committee asked about the new volume of reporting and regulations placed on CCOs. They questioned the usefulness of these reports and the administrative burden they might create. 

Allen noted that the new rules and reports are an attempt to clean up previous CCO rules and improve transparency, but said that OHA may have “bitten off more than we could chew.” He says they are actively working internally and with CCOs to identify opportunities where they can “delay, slim down, or get rid of” some of the reports. 

When Sen. Dennis Linthicum brought up “the full speed ahead” notion of CCO 2.0, Allen pushed back. 

“I would respectfully push back on the notion that I’m endorsing ‘full speed ahead.’ We’ve already delayed the whole process by a year. I’ve already talked about the fact that we’re working on how we can limit and reduce the portfolio of reports,” responded Allen. “I am by no means saying we’re not making a change to anything and we’re full speed ahead on everything. We are actively working to try to be responsive to this issue. But I also want to make sure that we’re operating this system for the benefit of members on the Oregon Health Plan, not for the benefit of coordinated care organizations.”

A highlight of Kitzhaber’s comments is available above. His full keynote can be viewed here