LC 149

2018 Regular Session

1/16/18 (LHF/ps)

DRAFT
SUMMARY

Requires coordinated care organizations to annually report to Oregon

Health Authority specified financial information to authority.
Requires authority to collaborate with coordinated care organizations to
develop plan for full implementation of alternative payment methodologies
and to develop metrics for investments in social determinants of health.
Requires authority to develop plan to reimburse costs of at least 85 per-
cent of services using alternative payment methodologies.
Requires authority to establish structure for collaboration between coor-
dinated care organizations and community mental health programs in each
geographical region to improve coordination of behavioral health services.
Repeals sunset on Central Oregon Health Council.
Requires expenditure of portion of coordinated care organization’s annual
net income or reserves on services designed to address health disparities and
social determinants of health. Modifies composition of coordinated care or-
ganization governing body.

1 A BILL FOR AN ACT

2 Relating to health care; creating new provisions; amending ORS 414.625; and
3 repealing section 19, chapter 418, Oregon Laws 2011.
4 Be It Enacted by the People of the State of Oregon:
5 SECTION 1. Sections 2 to 5 of this 2018 Act are added to and made
6 a part of ORS chapter 414.
7 SECTION 2. Coordinated care organizations shall report annually
8 to the Oregon Health Authority financial information prescribed by
9 the authority that discloses each coordinated care organization’s profit
10 margin, medical and nonmedical costs and investments and payments
11 made to partner organizations.
12 SECTION 3. The Oregon Health Authority shall collaborate with all
NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
 LC 149 1/16/18

1 coordinated care organizations to develop a plan for the full imple-

2 mentation of alternative payment methodologies. The plan must:
3 (1) Describe how the authority, coordinated care organizations and
4 contracted providers will provide at least 85 percent of the reimburse-
5 ments for services using alternative payment methodologies, in ac-
6 cordance with ORS 414.653, by December 31, 2023;
7 (2) Provide a broad definition of alternative payment methodologies;
8 (3) Allow for a phased-in implementation over the term of a coor-
9 dinated care organization’s contract; and
10 (4) Align with the methodology and calculations for alternative
11 payment models developed by the Center for Medicare and Medicaid
12 Innovation.
13 SECTION 4. (1) As used in this section, “social determinants of
14 health” means the conditions into which individuals are born and in
15 which individuals grow, live, work and age, including but not limited
16 to:
17 (a) Housing;
18 (b) Education;
19 (c) Criminal justice;
20 (d) Employment opportunities;
21 (e) Neighborhood environment; and
22 (f) Transportation.
23 (2) The Oregon Health Authority shall collaborate with coordinated
24 care organizations to develop specific metrics for a coordinated care
25 organization’s annual investments in the social determinants of health
26 of its members. The metrics must be consistent with the requirements
27 for medical loss ratios contained in the terms and conditions of the
28 demonstration project approved by the Centers for Medicare and
29 Medicaid Services.
30 SECTION 5. The Oregon Health Authority shall establish a struc-
31 ture for collaboration between coordinated care organizations and

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1 community mental health programs in each geographical region of

2 this state in the delivery of behavioral health services to ensure that
3 all Oregonians’ behavioral health needs are aligned, coordinated and
4 directed by coordinated care organizations. Each collaboration must
5 have a model of governance and finance that builds on existing
6 structures and is led by the coordinated care organizations.
7 SECTION 6. Section 19, chapter 418, Oregon Laws 2011, as amended
8 by section 6, chapter 359, Oregon Laws 2015, is repealed.
9 SECTION 7. ORS 414.625 is amended to read:
10 414.625. (1) The Oregon Health Authority shall adopt by rule the quali-
11 fication criteria and requirements for a coordinated care organization and
12 shall integrate the criteria and requirements into each contract with a co-
13 ordinated care organization. Coordinated care organizations may be local,
14 community-based organizations or statewide organizations with community-
15 based participation in governance or any combination of the two. Coordi-
16 nated care organizations may contract with counties or with other public or
17 private entities to provide services to members. The authority may not
18 contract with only one statewide organization. A coordinated care organiza-
19 tion may be a single corporate structure or a network of providers organized
20 through contractual relationships. The criteria and requirements adopted
21 by the authority under this section must include, but are not limited to, a
22 requirement that the coordinated care [organization’s demonstrated experi-
23 ence and capacity for] organization:
24 (a) Have demonstrated experience and a capacity for managing fi-
25 nancial risk and establishing financial reserves.
26 (b) [Meeting] Meet the following minimum financial requirements:
27 (A) [Maintaining] Maintain restricted reserves of $250,000 plus an
28 amount equal to 50 percent of the coordinated care organization’s total ac-
29 tual or projected liabilities above $250,000.
30 (B) [Maintaining] Maintain a net worth in an amount equal to at least
31 five percent of the average combined revenue in the prior two quarters of the

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 LC 149 1/16/18

1 participating health care entities.

2 (C) Expend a portion of the annual net income or reserves of the
3 coordinated care organization that exceed the financial requirements
4 specified in this paragraph on services designed to address health dis-
5 parities and the social determinants of health consistent with the co-
6 ordinated care organization’s community health improvement plan
7 and transformation plan and the terms and conditions of the Medicaid
8 demonstration project under section 1115 of the Social Security Act (42
9 U.S.C. 1315).
10 (c) [Operating] Operate within a fixed global budget and, by January 1,
11 2023, spending on primary care, as defined in section 2, chapter 575, Oregon
12 Laws 2015, at least 12 percent of the coordinated care organization’s total
13 expenditures for physical and mental health care provided to members, ex-
14 cept for expenditures on prescription drugs, vision care and dental care.
15 (d) [Developing and implementing] Develop and implement alternative
16 payment methodologies that are based on health care quality and improved
17 health outcomes.
18 (e) [Coordinating] Coordinate the delivery of physical health care, mental
19 health and chemical dependency services, oral health care and covered
20 long-term care services.
21 (f) [Engaging] Engage community members and health care providers in
22 improving the health of the community and addressing regional, cultural,
23 socioeconomic and racial disparities in health care that exist among the co-
24 ordinated care organization’s members and in the coordinated care
25 organization’s community.
26 (2) In addition to the criteria and requirements specified in subsection
27 (1) of this section, the authority must adopt by rule requirements for coor-
28 dinated care organizations contracting with the authority so that:
29 (a) Each member of the coordinated care organization receives integrated
30 person centered care and services designed to provide choice, independence
31 and dignity.

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 LC 149 1/16/18

1 (b) Each member has a consistent and stable relationship with a care
2 team that is responsible for comprehensive care management and service
3 delivery.
4 (c) The supportive and therapeutic needs of each member are addressed
5 in a holistic fashion, using patient centered primary care homes, behavioral
6 health homes or other models that support patient centered primary care and
7 behavioral health care and individualized care plans to the extent feasible.
8 (d) Members receive comprehensive transitional care, including appropri-
9 ate follow-up, when entering and leaving an acute care facility or a long
10 term care setting.
11 (e) Members receive assistance in navigating the health care delivery
12 system and in accessing community and social support services and statewide
13 resources, including through the use of certified health care interpreters and
14 qualified health care interpreters, as those terms are defined in ORS 413.550.
15 (f) Services and supports are geographically located as close to where
16 members reside as possible and are, if available, offered in nontraditional
17 settings that are accessible to families, diverse communities and underserved
18 populations.
19 (g) Each coordinated care organization uses health information technol-
20 ogy to link services and care providers across the continuum of care to the
21 greatest extent practicable and if financially viable.
22 (h) Each coordinated care organization complies with the safeguards for
23 members described in ORS 414.635.
24 (i) Each coordinated care organization convenes a community advisory
25 council that meets the criteria specified in ORS 414.627.
26 (j) Each coordinated care organization prioritizes working with members
27 who have high health care needs, multiple chronic conditions, mental illness
28 or chemical dependency and involves those members in accessing and man-
29 aging appropriate preventive, health, remedial and supportive care and ser-
30 vices, including the services described in ORS 414.766, to reduce the use of
31 avoidable emergency room visits and hospital admissions.

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 LC 149 1/16/18

1 (k) Members have a choice of providers within the coordinated care

2 organization’s network and that providers participating in a coordinated care
3 organization:
4 (A) Work together to develop best practices for care and service delivery
5 to reduce waste and improve the health and well-being of members.
6 (B) Are educated about the integrated approach and how to access and
7 communicate within the integrated system about a patient’s treatment plan
8 and health history.
9 (C) Emphasize prevention, healthy lifestyle choices, evidence-based prac-
10 tices, shared decision-making and communication.
11 (D) Are permitted to participate in the networks of multiple coordinated
12 care organizations.
13 (E) Include providers of specialty care.
14 (F) Are selected by coordinated care organizations using universal appli-
15 cation and credentialing procedures and objective quality information and
16 are removed if the providers fail to meet objective quality standards.
17 (G) Work together to develop best practices for culturally appropriate
18 care and service delivery to reduce waste, reduce health disparities and im-
19 prove the health and well-being of members.
20 (L) Each coordinated care organization reports on outcome and quality
21 measures adopted under ORS 414.638 and participates in the health care data
22 reporting system established in ORS 442.464 and 442.466.
23 (m) Each coordinated care organization uses best practices in the man-
24 agement of finances, contracts, claims processing, payment functions and
25 provider networks.
26 (n) Each coordinated care organization participates in the learning
27 collaborative described in ORS 413.259 (3).
28 (o) Each coordinated care organization has a governing body of which a
29 majority of the members are persons that share in the financial risk of the
30 organization and that includes:
31 (A) A representative of a dental care organization selected by the coor-

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 LC 149 1/16/18

1 dinated care organization;

2 (B) The major components of the health care delivery system;
3 (C) At least two health care providers in active practice, including:
4 (i) A physician licensed under ORS chapter 677 or a nurse practitioner
5 certified under ORS 678.375, whose area of practice is primary care; and
6 (ii) A mental health or chemical dependency treatment provider;
7 (D) At least two members from the community at large, who have no
8 financial interest in the coordinated care organization, to ensure that
9 the organization’s decision-making is consistent with the values of the
10 members and the community; and
11 (E) At least one member of the community advisory council.
12 (p) Each coordinated care organization’s governing body establishes
13 standards for publicizing the activities of the coordinated care organization
14 and the organization’s community advisory councils, as necessary, to keep
15 the community informed.
16 (3) The authority shall consider the participation of area agencies and
17 other nonprofit agencies in the configuration of coordinated care organiza-
18 tions.
19 (4) In selecting one or more coordinated care organizations to serve a
20 geographic area, the authority shall:
21 (a) For members and potential members, optimize access to care and
22 choice of providers;
23 (b) For providers, optimize choice in contracting with coordinated care
24 organizations; and
25 (c) Allow more than one coordinated care organization to serve the ge-
26 ographic area if necessary to optimize access and choice under this sub-
27 section.
28 (5) [On or before July 1, 2014,] Each coordinated care organization must
29 have a formal contractual relationship with any dental care organization
30 that serves members of the coordinated care organization in the area where
31 they reside.

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1 SECTION 8. ORS 414.625, as amended by section 14, chapter 489, Oregon

2 Laws 2017, is amended to read:
3 414.625. (1) The Oregon Health Authority shall adopt by rule the quali-
4 fication criteria and requirements for a coordinated care organization and
5 shall integrate the criteria and requirements into each contract with a co-
6 ordinated care organization. Coordinated care organizations may be local,
7 community-based organizations or statewide organizations with community-
8 based participation in governance or any combination of the two. Coordi-
9 nated care organizations may contract with counties or with other public or
10 private entities to provide services to members. The authority may not
11 contract with only one statewide organization. A coordinated care organiza-
12 tion may be a single corporate structure or a network of providers organized
13 through contractual relationships. The criteria and requirements adopted
14 by the authority under this section must include, but are not limited to, a
15 requirement that the coordinated care [organization’s demonstrated experi-
16 ence and capacity for] organization:
17 (a) Have demonstrated experience and a capacity for managing fi-
18 nancial risk and establishing financial reserves.
19 (b) [Meeting] Meet the following minimum financial requirements:
20 (A) [Maintaining] Maintain restricted reserves of $250,000 plus an
21 amount equal to 50 percent of the coordinated care organization’s total ac-
22 tual or projected liabilities above $250,000.
23 (B) [Maintaining] Maintain a net worth in an amount equal to at least
24 five percent of the average combined revenue in the prior two quarters of the
25 participating health care entities.
26 (C) Expend a portion of the annual net income or reserves of the
27 coordinated care organization that exceed the financial requirements
28 specified in this paragraph on services designed to address health dis-
29 parities and the social determinants of health consistent with the co-
30 ordinated care organization’s community health improvement plan
31 and transformation plan and the terms and conditions of the Medicaid

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 LC 149 1/16/18

1 demonstration project under section 1115 of the Social Security Act (42
2 U.S.C. 1315).
3 (c) [Operating] Operate within a fixed global budget and spending on
4 primary care, as defined by the authority by rule, at least 12 percent of the
5 coordinated care organization’s total expenditures for physical and mental
6 health care provided to members, except for expenditures on prescription
7 drugs, vision care and dental care.
8 (d) [Developing and implementing] Develop and implement alternative
9 payment methodologies that are based on health care quality and improved
10 health outcomes.
11 (e) [Coordinating] Coordinate the delivery of physical health care, mental
12 health and chemical dependency services, oral health care and covered
13 long-term care services.
14 (f) [Engaging] Engage community members and health care providers in
15 improving the health of the community and addressing regional, cultural,
16 socioeconomic and racial disparities in health care that exist among the co-
17 ordinated care organization’s members and in the coordinated care
18 organization’s community.
19 (2) In addition to the criteria and requirements specified in subsection
20 (1) of this section, the authority must adopt by rule requirements for coor-
21 dinated care organizations contracting with the authority so that:
22 (a) Each member of the coordinated care organization receives integrated
23 person centered care and services designed to provide choice, independence
24 and dignity.
25 (b) Each member has a consistent and stable relationship with a care
26 team that is responsible for comprehensive care management and service
27 delivery.
28 (c) The supportive and therapeutic needs of each member are addressed
29 in a holistic fashion, using patient centered primary care homes, behavioral
30 health homes or other models that support patient centered primary care and
31 behavioral health care and individualized care plans to the extent feasible.

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 LC 149 1/16/18

1 (d) Members receive comprehensive transitional care, including appropri-

2 ate follow-up, when entering and leaving an acute care facility or a long
3 term care setting.
4 (e) Members receive assistance in navigating the health care delivery
5 system and in accessing community and social support services and statewide
6 resources, including through the use of certified health care interpreters and
7 qualified health care interpreters, as those terms are defined in ORS 413.550.
8 (f) Services and supports are geographically located as close to where
9 members reside as possible and are, if available, offered in nontraditional
10 settings that are accessible to families, diverse communities and underserved
11 populations.
12 (g) Each coordinated care organization uses health information technol-
13 ogy to link services and care providers across the continuum of care to the
14 greatest extent practicable and if financially viable.
15 (h) Each coordinated care organization complies with the safeguards for
16 members described in ORS 414.635.
17 (i) Each coordinated care organization convenes a community advisory
18 council that meets the criteria specified in ORS 414.627.
19 (j) Each coordinated care organization prioritizes working with members
20 who have high health care needs, multiple chronic conditions, mental illness
21 or chemical dependency and involves those members in accessing and man-
22 aging appropriate preventive, health, remedial and supportive care and ser-
23 vices, including the services described in ORS 414.766, to reduce the use of
24 avoidable emergency room visits and hospital admissions.
25 (k) Members have a choice of providers within the coordinated care
26 organization’s network and that providers participating in a coordinated care
27 organization:
28 (A) Work together to develop best practices for care and service delivery
29 to reduce waste and improve the health and well-being of members.
30 (B) Are educated about the integrated approach and how to access and
31 communicate within the integrated system about a patient’s treatment plan

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 LC 149 1/16/18

1 and health history.

2 (C) Emphasize prevention, healthy lifestyle choices, evidence-based prac-
3 tices, shared decision-making and communication.
4 (D) Are permitted to participate in the networks of multiple coordinated
5 care organizations.
6 (E) Include providers of specialty care.
7 (F) Are selected by coordinated care organizations using universal appli-
8 cation and credentialing procedures and objective quality information and
9 are removed if the providers fail to meet objective quality standards.
10 (G) Work together to develop best practices for culturally appropriate
11 care and service delivery to reduce waste, reduce health disparities and im-
12 prove the health and well-being of members.
13 (L) Each coordinated care organization reports on outcome and quality
14 measures adopted under ORS 414.638 and participates in the health care data
15 reporting system established in ORS 442.464 and 442.466.
16 (m) Each coordinated care organization uses best practices in the man-
17 agement of finances, contracts, claims processing, payment functions and
18 provider networks.
19 (n) Each coordinated care organization participates in the learning
20 collaborative described in ORS 413.259 (3).
21 (o) Each coordinated care organization has a governing body of which a
22 majority of the members are persons that share in the financial risk of the
23 organization and that includes:
24 (A) A representative of a dental care organization selected by the coor-
25 dinated care organization;
26 (B) The major components of the health care delivery system;
27 (C) At least two health care providers in active practice, including:
28 (i) A physician licensed under ORS chapter 677 or a nurse practitioner
29 certified under ORS 678.375, whose area of practice is primary care; and
30 (ii) A mental health or chemical dependency treatment provider;
31 (D) At least two members from the community at large, who have no

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 LC 149 1/16/18

1 financial interest in the coordinated care organization, to ensure that

2 the organization’s decision-making is consistent with the values of the
3 members and the community; and
4 (E) At least one member of the community advisory council.
5 (p) Each coordinated care organization’s governing body establishes
6 standards for publicizing the activities of the coordinated care organization
7 and the organization’s community advisory councils, as necessary, to keep
8 the community informed.
9 (3) The authority shall consider the participation of area agencies and
10 other nonprofit agencies in the configuration of coordinated care organiza-
11 tions.
12 (4) In selecting one or more coordinated care organizations to serve a
13 geographic area, the authority shall:
14 (a) For members and potential members, optimize access to care and
15 choice of providers;
16 (b) For providers, optimize choice in contracting with coordinated care
17 organizations; and
18 (c) Allow more than one coordinated care organization to serve the ge-
19 ographic area if necessary to optimize access and choice under this sub-
20 section.
21 (5) [On or before July 1, 2014,] Each coordinated care organization must
22 have a formal contractual relationship with any dental care organization
23 that serves members of the coordinated care organization in the area where
24 they reside.
25 SECTION 9. Section 3 of this 2018 Act is repealed on January 2, 2024.
26

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