Takeaways from the CCO 2.0 contract awards
Last week, the Oregon Health Authority announced its intent to award the 2020-2024 coordinated care contracts to 15 organizations. The new CCO 2.0 contracts will total over $6 billion for the 2020 contract year, serving nearly 1 million Oregon Health Plan members.
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In January, the Oregon Health Policy Board released its request for applications outlining the policy priorities for the next phase of CCO contracting. The RFA prioritized increasing value and pay performance, addressing the social determinants of health, behavioral health integration, and maintaining sustainable cost growth and ensuring financial transparency.
“The first round of CCO contracting in 2015 was about a change of strategic mission and restructuring of Medicaid MCOs as CCOs with strengthened community-based governance,” said government strategist and lobbyist Tom Holt. “The 2020 awards look like OHA strengthening financial oversight and performance accountability — no doubt informed by senior OHA leaders’ background in regulating commercial health insurers.”
Eleven organizations are approved for five-year contracts; the other four are approved to receive one-year contracts. The organizations with one-year contracts are on “remediation plans” and will have the year to prove they are able to meet the specified CCO 2.0 expectations and policies.
“It looks like OHA questions the long-term viability of small, stand-alone CCOs. All of the essentially probationary 1-year awards are to smaller, mostly rural CCOs serving geographies on which larger players didn’t bid. The larger CCOs, all of which have sophisticated administrators behind them, are being asked to tune up their execution, as well as shore up their financial structures — and in a few cases do that while competing for CCO membership,” added Holt.
“Bottom line, everyone is being told to up their games, and no one should assume their territories will be protected by OHA from the hard business realities of sustainably operating Medicaid programs. It all adds up to an exciting opportunity to build on the original vision of CCOs and take it to the next level.”
“It will be interesting to watch the role of communities in influencing CCOs over the next five years as well as the impact of having multiple CCOs in some markets and single CCOs in others. Some of the smaller rural CCOs have performed well over the last six years, and I hope those affected by the one-year contracts will be able to meet the requirements to extend those contracts and continue serving their communities in partnership with their local providers,” said Janet Meyer, Principal at Health Management Associates.
The 15 organizations are now tasked with proving they have adequate provider networks in their service areas, and that they are ready to deliver the services they promised in their applications. As reported by the Portland Business Journal, this is already proving difficult for at least one health plan.
“The OHA’s award announcement definitely signaled a new era in CCO policy and operations. I think it is good that OHA is raising the bar for acceptable performance, being more prescriptive in setting CCO priorities and beefing up oversight,” said Meyer.