SENATE SPECIAL COMMITTEE ON

ACCESS TO THE OREGON HEALTH PLAN

 

 

September 5-6, 2002 Hearing Room 50

10:00 a.m.      Tapes 3 - 8

 

MEMBERS PRESENT:            Sen. John Minnis, Chair

                                                Sen. Bev Clarno

                                                Sen. Ted Ferrioli

Sen. Bill Fisher

Sen. Gary George

Sen. Avel Gordly

Sen. Rick Metsger

Sen. Frank Shields

Sen. Cliff Trow

 

STAFF PRESENT:                  Rick Berkobien, Administrator

                                                Bill Taylor, Counsel

                                                Patsy Wood, Committee Assistant

 

 

MEASURE/ISSUES HEARD:            Informational Meeting

 

                                                Secretary of State Audits Division

                                                Department of Human Services

                                                Oregon Health Policy and Research

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 3, A

003

Chair Minnis

Calls the meeting to order at 10:12 a.m.

010

Cathy Pollino

Director, Secretary of State Audits Division (AD). Introduces Chuck Gibner, Assistant Director.  Gives an overview of the Secretary of State audit reports (EXHIBITS A & B).  Explains what is used to compile the encounter data.

032

Sen. Trow

Asks if the information is standardized

035

Pollino

Responds affirmatively.  Continues to discuss the encounter data audit.  Talks about the importance of good encounter data.  Talks about what the state is doing to ensure good encounter data.  Says the question of “how far off is it” isn’t answered in the audit – quality of the data is unknown.

071

Sen. Trow

Asks if the data is so far off to cause big problems.

073

Pollino

Does not know.  A review should be performed.

078

Sen. Trow

Says the fix is sometimes more expensive than the problem.

080

Pollino

Agrees, but does not know how far off the data is because they do not have the expertise to do an extensive audit.

101

Sen. Shields

Asks if the data is accurate enough so that the capitation rates are appropriately set.

110

Pollino

Answers they do not know.

114

Sen. Shields

Mentions the questions of paying too much or not paying enough.

118

Pollino

Talks about cost of living adjustment based on services.  Talks about the discrepancies in reporting.

133

Sen. Clarno

Asks if they interviewed plants going out of business because lack of reimbursement rates.

139

Chuck Gibner

Deputy Assistant Director (AD).  Responds they did interview a couple but had no way to confirm whether the rates were paying enough or not.

145

Sen. Clarno

Asks if anyone has reported feeling financially stable.

150

Pollino

Assumes some would go out of business.

151

Sen. Clarno

Talks about people going out of business because they could not operate with the reimbursement amount.  Says there must be problems with the encounter data and the reimbursement rate.

154

Chair Minnis

Asks if there was adjustment by region.

156

Pollino

There is a geographic adjustment and with population served.

158

Chair Minnis

Asks if providers are opting out.  Asks about the expectations of the Audits Division.  Hears that the data is so inaccurate that there is no guidance as to financial accountability.  Asks what needs to be done to improve the data and if there is documentation of agency response.

197

Pollino

Talks about the Secretary of State Audits Division role: identify systemic fixes to these issues – what can they do to improve the process. 

210

Chair Minnis

Talks about legislation recently passed by Congress regarding corporations’ financial conditions where state agencies verify the true financial condition.

220

Pollino

Says they have the state’s financial report.

224

Chair Minnis

States the purpose of the legislation was to hold CEO’s accountable.

230

Pollino

Answers she is not aware of that.

233

Sen. Fisher

Comparee private industry’s accountability to the state’s lack of accountability.  Discusses the expense and fines that private companies are subject to.

257

Pollino

Emphasizes the state has financial reports that are audited every year and there are standards with accurate reporting data.

267

Sen. Fisher

Talks about the exactness of private business reporting required by the state.

278

Sen. Ferrioli

Discusses the importance of the audit. It says this agency violates accurate data reporting.  Reads from the report.  This program fails to meet HCFA regulations.  The agency is seriously challenged without quality controls on their encounter data.  Says there are no controls in place for auditing prescription drugs which is a significant cost of the Oregon Health Plan (OHP). 

320

Sen. Ferrioli

States there is potential fraud and waste found by the report.  Discusses fraud that could occur with a simple chest x-ray.  Reports that inadequate encounter data could be putting the program at risk.  Talks about the length of time the audit took compared to the number of files. Emphasizes the seriousness of the problem. Wants more extensive audits in OHP.

420

Chair Minnis

Asks if the Secretary of State has copies of the data.

426

Pollino

Responds that a lot of the information is held by an accounting firm and the database could be shared with the committee.

440

Sen. Trow

Asks how big a problem we have.

445

Pollino

Answers that they do not know at this point.  They could be “right on”

455

Sen. Trow

Asks if the quality of the encounter data is worse than any other state.

459

Pollino

Responds that there is a struggle everywhere. Surmises that being off a small percentage can cause big problems due to the size of the program in Oregon.

TAPE 4, A

005

Sen. Trow

Asks what we need to better understand the problem.

009

Pollino

Responds the next step is to prioritize the audits coming out of the Secretary of State.

020

Sen. Trow

Asks if more information is needed to analyze where we are.

022

Pollino

Responds they can put that together.

023

Chair Minnis

Asks if a larger statistical sample number is needed.

026

Pollino

Explains the numbers used.

032

Chair Minnis

Is there a problem, based on the information found?

034

Pollino

Answers, Yes.

036

Sen. Ferrioli

Emphasizes that the failure is with the system and controls, not the people running the program.  There is no mandate for this agency to do anything about prescription drug data. A mechanism to measure data platforms is needed.   

055

Chair Minnis

Discusses the potential of spending more money than we need to spend.

060

Sen. Shields

Responds this information is hard to determine if the data is incorrect.  Discusses the expanse of this problem and legislators not having the time to explore the issue.  There is not enough data to determine where the sources of the problems lie.

080

Chair Minnis

Says there is enough lack of information to explore the issue.

095

Counsel Taylor

Directs to Page 2 of report “income not identified” and asks eligibility requirements found in the report.

100

Gibner

Mentions looking for a high-risk pool to audit.

110

Pollino

Says there is an update on that.

113

Sen. Ferrioli

Says we do not know if it is a system error or lack of control or oversight of the Legislature, but we do know this audit says the program fails to meet minimum federal standards for data.

123

Pollino

Explains we are only looking at managing the program – not legislative oversight.

130

Gibner

Discusses the eligibility plan audit and how the data was gathered (EXHIBIT B).  Says they looked at high risk individuals.

148

Chair Minnis

Asks for a definition of “high risk.”

150

Gibner

Explains their definition of “high risk.” 

165

Counsel Taylor

Refers to Page 2, “Unreported Income”

178

Counsel Taylor

Asks if that is a conservative number.

180

Gibner

Responds that would be statistically relevant to that population.

182

Counsel Taylor

Asks if between 100 and 125 percent group of those receiving benefits but actually ineligible would be a substantially larger sum of money.

188

Pollino

Explains how the “pool” was narrowed to focus.

199

Counsel Taylor

Would it be safe go assume that as some people go below the line, others go above the time?

200

Pollino

Answers yes; there is that population between 100 and 125 percent.

206

Taylor

Asks if that number is factored.

208

Pollino

Answers, no.

214

Gibner

Each sample case went back into case files.

218

Chair Minnis

Pool between 100 – 125% is significant.  Asks if the federal government allows for fluctuation.

226

Gibner

Continues his discussion of the population that fall into the high risk category.  Comments on the number of individuals on the plan who did not have social security numbers.  Premium waiver allowances were also considered.  Refers to page 4 that gives contributing factors – notes drop in income was not investigated.  Discusses non-citizens.

279

Sen. Shields

Asks about eligibility specialists.

290

Gibner

Responds that they worked with DHS and there was a problem with manageability because of large caseloads.

302

Sen. Shields

Discusses eligibility in his area of Portland.

314

Sen. Trow

Asks if there was good training for people who determine eligibility.

319

Gibner

Replies that in the enhanced verification process trainers are focused on this area.

335

Sen. Trow

Asks if those marginally qualified clients that needed immediate medical attention might have affected eligibility.

339

Gibner

Answers that was not a factor evident in our sample.

342

Rep. Kruse

Discusses time allotted for applications.

358

Sen. Ferrioli

Asks how you can make a determination without social security numbers – saying a number of citizens were approved.  Discusses people from Washington and Idaho who hook up with the OHP.  Talks about serving illegal aliens or people not eligible for the program which is contradictory to federal law (page 5 of Exhibit B).  Says there are not adequate quality controls within the agency. 

TAPE 3, B

018

Counsel Taylor

Asks about the “significant” rate of error – what is significant?

023

Sen. Ferrioli

Gives the example of 20 files, six of the households.  Significant in some cases is 50 %.  Only very few social security number files are pulled, like 20.

026

Gibner

Gives the sample of 15 of 60 files did not have a social security number.

032

Pollino

Says an audit test was done to determine out of state living. States that obtaining Post Office boxes was the most common way to get an Oregon address.

040

Chair Minnis

Asks if they identified addresses.

042

Sen. Fisher

Says reports were made on using other people’s addresses. Asks if driver’s licenses or voting cards were checked.

058

Pollino

Answers no.

060

Sen. Fisher

Discusses people who come from out of state with relatives in Oregon who use false Oregon residency.  Wonders why eligibility requirements are not tighter.  Notes that the report doesn’t say why social security numbers are not required.

062

Gibner

Replies that the individual applying has to have a social security number, but not people in the house.

127

Jean Thorne

Governor’s Office, OHP2 Project Director, DHS. Introduces Lynn Reed.

128

Sue Abrams

Children, Adults and Families, DHS.  Gives background with DHS.

129

Vicky Green

Program Manager for Oregon Health Plan Statewide Processing Center, DHS.  Gives background with DHS.

148

Abrams

Discusses the actions they put into place

155

Chair Minnis

Asks if she has access to financial accountability people within DHS.

160

Abrams

Talks about the eligibility audit.  Says the policy on non-citizens has been changed in their rules.

181

Sen. Ferrioli

Asks if actual or potential savings were tracked as a result of the changes made.

184

Abrams

Answers they have not tracked them, but they could provide information if people are denied.

190

Sen. Ferrioli

Talks about ineligibles being found and notification of discontinued benefits.

200

Abrams

Said new ineligibles will not receive benefits.  Talks about “pending” notice given to individuals.  Talks about follow-up on areas that were pointed out by the Secretary of State audit report – waiver and income pieces.  Says that a social security number or proof of applying for social security number is now required.  Talks about a verification of income.

255

Sen. Ferrioli

Points out that a drop in income is a significant driver – value of OHP would compare to $350/month in health care so people miss work or leave a job to stay on the OHP.  Explains that people do not want to jeopardize their health coverage in low paying jobs.

285

Sen. Clarno

Asks about policy changes, Asks if caseworkers are going back in files to check eligibility or just new enrollees.

295

Abrams

Responds usually at re-certification or if it comes to someone’s attention.

298

Sen. Clarno

Re-certify how often?

300

Abrams

Every six months. Explains training to staff at OHP after the audit.

311

Chair Minnis

Asks if staff was signing up people who were not qualified.

313

Green

Responds, no.

320

Chair Minnis

Asks how the interview process is monitored

325

Green

Talks about quality control done monthly.

328

Chair Minnis

Says he has heard that caseworkers have told individuals to leave their job to stay on the OHP or have another baby.

335

Green

Answers, no, she has not heard that.

339

Sen. Metsger

Asks if review of eligibility has been done in the agricultural field – says he has heard that a group of ineligible individuals get one person signed up. This has to do with assigning payment to one person rather than others.

366

Abrams

Explains they do a match with the employment division for a control.  Says they have investigators.

375

Sen. Metsger

Asks if an investigation has taken place.

384

Abrams

Responds she does not know but can find out.

386

Chair Minnis

Asks how many screeners there are to determine OHP eligibility.

TAPE 4, B

001

Green

Reviews the eligibility process for the OHP.

005

Chair Minnis

Asks to describe hospitalization process.

007

Green

Responds they fax the form in and emergency determination is made.

014

Sen. Ferrioli

Asks about spot checks – how many are required each month?

016

Green

Responds five reviews on each worker with 20-25 workers each month.

020

Sen. Ferrioli

Audit implies that every file on intake has to be reviewed. Encounter data needs to be correlated.  Emphasizes the need for systematic quality control on intake.  Asks if a minimum wage earner, 40 hrs a week, is eligible for OHP.

040

Abrams

Responds that depends on how many are in household.  One person would not be eligible.  Says minimum wage is above poverty level.

050

Sen. Ferrioli

Asks if an employer could hire people part time and sign them up for OHP.

055

Abrams

Answers, that if a worker was paid below eligibility and met standards, they could sign up for OHP.

060

Sen. Ferrioli

Asks if all people on unemployment would be eligible for OHP.

063

Abrams

Answers she is not sure, it would depend on their income.

066

Sen. Ferrioli

Based on minimum wage, at 30 hours per week, guesses they would qualify.  Describes Washington County software developers were doing this very same thing.  Says people figure out how to tap into these benefits.  In District 30, 40% of the people he represents are eligible for DHR programs and services. This program needs to be sustainable.

087

Chair Minnis

Asks if there are analyses of what percentage are receiving OHP benefits.  Asks for number employed and receiving OHP and how often people cycle through the program and the turnover.

090

Abrams

Respond there is information, and she can get the figures.

100

Sen. Trow

Asks about staffing problems – are caseloads too big?

109

Abrams

Responds at the present with turnover and the freeze there are 40 unfilled positions.

117

Sen. Trow

The issue is whether to supply adequate staff or hire specialists to watch over inadequate staff.

123

Abrams

Responds that some processes have been recommended to improve quality control.  It would require additional staff.

135

Sen. Trow

Sympathizes with people who need to be on the program.

197

Jean Thorne

DHS. Talks about rising cost of health care to which the OHP is subject. Submits notebook (EXHIBIT C) and discusses 3 charts (EXHIBIT D).  Speaks about the waivers (EXHIBIT E) and the flexibility they might have.

250

Chair Minnis

Discusses the responsibility of financial accountability – asks how do you avoid the alarmist?

262

Thorne

Responds on flexibility in reducing benefits.

265

Chair Minnis

Responds that that make the issue “muddier.”  Talks about expanding a program without accountability.

273

Thorne

Responds the escalation of health plan costs are related to caseload increases and medical inflation.  There is room for tighter controls.

280

Thorne

Agrees and says there are more processes to look at to make sure encounter data is accurate.  Describes the bar chart in Exhibit D.  Discusses waivers. 

342

Chair Minnis

Discusses budget and raising the level to 185% of the federal poverty level and asks what that would look like in the future.

350

Thorne

Says they should get to that information in her presentation.  Mentions constraints by federal government.

382

Chair Minnis

Asks for spreadsheets to help explain this. 

389

Rep. Kruse

Mentions creation of new waiver application

423

Rep. Kruse

Wonders if legislators have seen documentation

425

Thorne

She can give 27 pages of the last set.

430

Rep. Kruse

States that if we were involved in creation of OHP, we should be involved in negotiations.

449

Sen. Fisher

Asks for information on list of co-payments – asks for the range.

455

Thorne

Answers they can get that.

465

Rep. Kruse

Submits testimony (EXHIBIT F).

467

Chair Minnis

Recesses the committee until 3:30 p.m.

TAPE 5, A

027

Chair Minnis

Reconvenes the committee September 6, 2002 at 11:10 a.m.

035

Jean Thorne

Continues her discussion of the historical background of OHP from about 1983. 

§         Government should be responsible for taking care of the poor

§         Employers should be responsible for providing health coverage

Implementation began February of 1994.  10.7% uninsured in 1996 and creeping up.  Talks about the controls in the OHP.  Talks about actions taken in the 2001 legislative session. 

141

Thorne

Compares statistics from 1995 (EXHIBIT G).  OHP doesn’t drive Oregon health care costs, it responds to them. 

196

Thorne

Discusses approach for OHP2 and HB 2519 (EXHIBIT H)

 

Thorne

Discusses the three-bar graph in Exhibit D.  Says they have asked for approval to go to 185% of poverty.  Describes the FHIAP graph. 

281

Thorne

Discusses the Initial OHP Standard Benefit Package in Exhibit D.  Talks about what services are not covered.  Talks about HB 2519.  Says state would cover mandated services. 

408

Thorne

Summarizes services that could go away, starting with dental care.

TAPE 6, A

021

Thorne

States changes in cost-sharing that has to be approved by the federal government.  Says the Legislature does not need a bill to move a line on the list, but would have to approve disappropriations. 

048

Thorne

Discusses the Oregon Health Plan 2 State Budget Neutrality page of Exhibit D.  Talks about the flexibility they now have from the federal government.  Describes the savings that could be realized as of December 1. 

140

Thorne

Discusses the Program Cost from Outreach/Expansion.  Describes how the expansion will occur.  Discusses restructuring of OHP; there are many concerns from the advocacy community about the impact of co-pays and premiums.  OHP is trying to take a path that allows more flexibility and tools. 

310

Chair Minnis

Asks if receiving benefits under OHP is optional.

320

Thorne

Answers the federal government has mandatory groups, optional people and a separate group because of waivers.

330

Chair Minnis

Could this group because it is optional go away?

334

Thorne

Yes.

336

Chair Minnis

Asks about the benefits of the OHP.

345

Thorne

Translates into savings to everybody but the state. Describes the uninsured.

354

Chair Minnis

Asks why that is in the state’s interest. 

365

Thorne

Hospitals being compensated by payers who have to pay more.  Health care coverage is brought to 110,000 who didn’t have it before. 

388

Chair Minnis

We’re doing this because it is humanitarian?

390

Thorne

Yes and a benefit to the private sector. Says preventive care is less expensive.

408

Chair Minnis

Asks if this information has been quantified.

410

Lynn Read

DHS.  Says this has not been quantified – have looked at the issue, but have not figured out how to quantify results.

412

Chair Minnis

Discusses the idea of capping expansion – OHP Standard – asks if there has been an analysis and if a cap is defensible.

415

Thorne

Says it is subject to available funds and federal government is allowing them to cap.

418

Chair Minnis

Who would they sue?

440

Thorne

In this case they could sue anyone. The federal government is allowing the state to cap enrollment.

475

Chair Minnis

Speaks about managed care.

489

Thorne

Talks about how the capitation rate is used to pay managed care. Discusses premiums and co-pays.

TAPE 5, B

048

Sen. Fisher

Asks what has happened to payroll, licensing, cost of equipment and supplies, donated services which are the first to suffer when bills have to be paid.

066

Thorne

Clarifies charity care is going down and hospital gross costs going up.  Managed care rates do not cover for all cases. 

100

Sen. Fisher

Refers to testimony on paying for managed care. Mentions care givers losing money.

118

Thorne

Discusses changes in Medicaid, Medicare, private sector, and OHP. 

148

Sen. Fisher

Wants it in the record that it is not true that providers have taken advantage  of the higher payment OHP gives and are no longer doing charity work.

156

Thorne

Responds that another factor is that medical malpractice has gone through the roof.  Costs are higher.  There are a number of factors that drive the ability of a provider to be able to see OHP patients.

160

Sen. Fisher

Asks about dental co-pays.

162

Thorne

Points out Appendix 3.1.

175

Sen. Shields

Asks about doctors leaving Oregon due to high liability insurance.

180

Thorne

Defers to Dr. Santa.

183

Sen. Shields

Refers to Medicaid and CHIP being out there whether OHP is or not.

188

Thorne

Of the 450,000 on the health plan, 340,000 would be covered under Medicaid and CHIP.

191

Sen. Shields

Refers to inadequate eligibility determination.

200

Thorne

Defers to other members of DHS to answer this.

209

Sen. Shields

Wants to know the accuracy in eligibility information in those two categories.  Asks about moving the line on the list. 

235

Thorne

Points out the Legislature moves the line, not the agency.

245

Sen. Shields

Refers to the chart, DHS adults outreach, what kind of outreach and how does the $10.6 million cost arise. Asks how outreach in one area can be outreach in another category. Asks about the interrelationship.

258

Thorne

Responds about expansion in OHP.

264

Read

Discusses the estimate. Discusses publicity for those who qualify for programs. 

293

Chair Minnis

Asks how the $10 million was arrived at.

293

Read

Responds it was based upon assumption that there would be influx over six months.

303

Chair Minnis

Asks if the $10 million is mostly focused toward FHIAP?

304

Read

Answers it is the spillover from their outreach.

314

Chair Minnis

Asks how many are intended to increase in the outreach program.

315

Read

Answers 14,000.

324

Chair Minnis

Asks how these people get into the program.

327

Sen. Shields

Comments that this is additional cost to the OHP because of the outreach.

330

Read

Comments that they do not want to spend on expanding. 

340

Sen. Shields

Describes a VISTA volunteer in his area.  Describes federal money being brought in.

363

Read

Responds there is no dollar amount budgeted for outreach. 

375

Sen. Shields

Asks what the minimum expansion that the federal government would require; has OHP set up how to determine that minimum?

390

Thorne

Answers not at the present.  Until waivers are in hand, they will not.

407

Sen. Trow

Refers to new waivers, expansion, new eligible, premiums and asks should we cap those premiums?

424

Thorne

Answers they are establishing premium models.

435

Sen. Trow

Discusses how seniors are paying high medication costs and co-pays.

440

Thorne

Responds premiums and co-pays were topics discussed in the waiver committee for OHP Standard.  Explains co-pays.

TAPE 6B

030

Sen. Fisher

Asks if co-pays are mandatory.

034

Thorne

Explains that for the OHP Plus, the separate co-pays the Legislature dealt with are not mandatory, but OHP Standard, the 110,000 people, are mandatory under Medicaid law. 

050

Chair Minnis

Recesses until 2:00 p.m.  Reconvenes meeting at 2:00 p.m.

073

Sen. Gordly

Asks about the wait list of patients. 

077

Thorne

Responds about the Family Health Insurance Assistance Program (FHIAP) program which caps enrollment.  There are 20,000 on that list. The Medicaid parts of the program, OHP and CHIP, there are no wait lists.  Those are currently entitlement programs.

090

Sen. Gordly

Comments that there are no specific wait lists for CHIP, we have a way of capturing what the need is. Asks for a perspective that shows without the OHP, what is the safety net in the communities to provide health care.

109

Thorne

Responds the first safety net is the hospital emergency room.  Describes other clinics.  Federally qualified health centers do charge co-pays. 

131

Sen. Gordly

Asks if there is a description by county or district that describes usage of the OHP.

135

Thorne

States there is one by county and it will be distributed.(EXHIBIT I)

155`

Sen. Gordly

Asks if they could see the total number of Oregonians receiving the existing health services existing in one picture.

164

Thorne

Discusses where those figures might be obtained.

180`

Sen. Gordly

Asks if the data can be separated by ethnicity.

183

Lynn Read

Responds there is data within their MMIS data system on race.

199

Chair Minnis

Are we assuming some individuals are underserved by race?

202

Sen. Gordly

Answers that is a fact.  Others can testify to that also.

208

Thorne

Discusses racial statistics.

217

Sen. Gordly

Explains how data can be of help in determining access to health care by race.

243

Thorne

Discusses by total population health care accessibility.

250

Chair Minnis

States there may be a larger served racial group that is questionable.

260

Sen. Gordly

Asks if there are questions we are missing.

260

Thorne

Responds the issues are very complex.  Suggests further hearing all the perspectives mentioned. 

285

Chair Minnis

Asks about the 110,000 in the OHP standard that are waiver related.  What is the cost per enrollee?

289

Thorne

Answers somewhere around $300 per individual.  Offers to get the accurate figure.

297

Chair Minnis

And that is 40 percent, 60 percent federal?

302

Sen. Ferrioli

Asks about the waivers.  Currently it is designed to give Oregon flexibility in allocation of costs and benefits;

326

Read

Responds the federal oversight agency guide is to provide technical assistance to states. 

350

Sen. Ferrioli

Discusses how accountability requirements are affected.

365

Read

Says she will look into that further.

400

Sen. Ferrioli

Asks if we do not currently require any long-term care, non- institutional care or in-patient encounter data.

428

Read

Responds those services are not part of managed care. 

439

Sen. Ferrioli

Asks for encounter data that the agency collects, and what new plans for encounter data it intends. The federal waiver is very good but the dark side is that it absolves administrators from meeting minimum standards for accountability and reporting. Wants a better understanding of how the capitation rate is set.  Wants to know who does the capitation rate.  What are the data streams? How the correlations are made.  Are there any connection between the people setting the capitation rates and any beneficiaries under this program?

482

Thorne

Responds that the actuary is Price Waterhouse Coopers.  They are available to explain the capitation rates.

490

Sen. Ferrioli

Asks who audits the department.

495

Thorne

Responds the department has an Audits Unit which has a function related to looking at the organization.  That is intended to improve operations. The Secretary of State Audit is separate.

TAPE  7,A

050

Sen. Ferrioli

So you do have an outside process that looks at your program?

052

Thorne

Replies the internal process is for the department as a whole.

055

Sen. Ferrioli

Asks if Price Waterhouse performs any other functions besides setting the capitation rates?

058

Thorne

Says they set per capita costs.  They are looking at our fee-for-service utilization and expenditures and our managed care utilization and costs.

063

Sen. Ferrioli

Asks if they provide written reports.

065

Thorne

Answers they provide detailed reports.

068

Sen. Ferrioli

Asks to see the executive summary. Asks how clients get back onto a program once they have been off for six months.

072

Thorne

Replies those under the poverty level have to wait the six months until they can reapply.  If they are over the poverty level, it may be longer due to caps.

080

Sen. Ferrioli

Do those unable to meet the premium end up in the emergency room?

085

Thorne

Replies that is possible.

090

Sen. Ferrioli

Asks about cost shifting between agencies and HMOs and service and care providers but also between agency and hospital, doctors’ offices and clinics.  Do you have an analysis of cost shifting caused by your agency?

100

Thorne

Replies they do not have an analysis because it has not happened yet.  There are reports Dr. Santa may have.

105

Chair Minnis

Comments on minimizing the shift.

107

Thorne

Says they do not have data on physicians and other providers.

110

Sen. Ferrioli

Asks if the agency implements the proposed prescription drug data system, and if it created a savings, where would that money go.

115

Thorne

Until capitation rates change, any benefit accrues to the plan.  Discusses utilization of that money.

120

Sen. Ferrioli

Wants to make sure this program is sustainable, accountable, and is solvent. Says it sounds like when an asset appears it may disappear. Hoped that the Secretary of State’s audits would trigger the desire to become accountable to meet the minimum federal requirements for reporting and to show potential improvements in performance and efficiency which result in savings. Says he does not see this.

170

Sen. Ferrioli

Emphasizes that the program will be lost if accountability is not attempted. You have to show how there can be savings.

185

Thorne

Answers during the interim DHS comes to the Emergency Board every six months. They rebalance at that time.

199

Chair Minnis

Comments that these are interesting issues in a complex area.  Supports focusing on accountability of the agency. Asks how many states have programs that insure above the federal poverty level.

210

Thorne

Suggests 10 to 20 states.

212

Chair Minnis

Supports tracking accountability of the agency.

215

Sen. Trow

Comments that he did not realize there was a serious accountability problem with the agency.  Is there concern at the federal level on how this money is being spent and how the program is operating?

220

Read

Answers she has not heard of anything.

222

Thorne

Answers that the federal agency has looked to Oregon as being one of the better states in terms of encounter data collection.  This is an emerging field for states.

265

Sen. Trow

Talks about people who could not afford the program and would end up in emergency rooms. Suggests other consequences of not getting health care in the job, school, getting sicker, and even death.

312

Chair Minnis

Asks if that could be quantified.

315

Sen. Trow

Replies that some are qualitative and cannot be quantified but they are important.

320

Thorne

Discusses how coverage leads to savings. Ability to quantify is difficult.

325

Sen. Shields

Discusses accuracy of information in Oregon and other states.  Asks about other states encounter data.

340

Thorne

Responds that changed in 1997 coming out of the Balanced Budget Act requirements.

350

Sen. Shields

Asks if Oregon’s encounter data system is ahead of the other states.

360

Thorne

Replies that is probably true but the standards are set by the federal agency.

363

Sen. Shields

Adds also the Secretary of State Audit guidelines.

377

Sen. Ferrioli

Says that what he just heard is that the agency has better encounter data than the other states, yet, the agency agrees with the auditor’s report that they are not meeting the minimum standards for encounter data reporting.  Emphasizes that point.

400

Thorne

Responds that it is not characterized as a superior program; the level of efficiency in other states is very low.

405

Sen. Ferrioli

Asks if we meet all the federal requirements.

407

Thorne

Replies we meet the federal requirements for Oregon.

410

Sen. Ferrioli

That is circular!  Either we meet the federal requirements or we do not.

415

Chair Minnis

Based on the waiver they are not required to meet the standards.

418

Sen. Ferrioli

Asks if we do not have federal requirements, do we have any requirements?

422

Thorne

Answers that the one requirement for other states not applicable to Oregon is the one to collect pharmacy encounter data and Oregon is now doing that.

428

Sen. Ferrioli

Suggests the legislators need to have data that can be made sense of to fulfill their role as oversight authority.

Tape 8,A

050

Chair Minnis

Recesses until 4:30 p.m.  Calls meeting to order at 4:38 p.m.

055

Dr. John Santa

Office of Oregon Health Policy and Research. Submits testimony and discusses HB 2519.  Talks about a bid for a new actuary.  Says 41 states have capitated Medicaid programs figured in 41 different ways.  Points out that a workgroup has been formed to provide input to the process.  Discusses Section 12 of HB 2519 (EXHIBIT J).

133

Sen. Fisher

Wonders if this information borders on Federal Trade Commission (FTC) collaboration.

137

Dr. Santa

Responds that information about trade levels is not FTC’s concern, but independent competitors discussing that information and organizing joint efforts to affect reimbursement rates is of concern.

143

Sen. Fisher

Points out a problem he had when information was released.

153

Dr. Santa

Says comparative information can be shared with practitioners.

157

Chair Minnis

Asks what difference it makes.

159

Dr. Santa

Responds the question is what do the hospitals get, the doctors, individual doctors get.

168

Sen. Ferrioli

Talks about reimbursement rates for doctors and hospitals and wonders what dynamics come into a rural community.  Capitation rates driven down by low per capita income so capitation rates are lower in rural areas than urban areas.  Wants the assurance that the RFP won’t bias capitation rates against rural Oregon.

233

Dr. Santa

RFP directs the actuary to be open to a number of areas, including the cap rate methodology.

241

Sen. Ferrioli

Comments that medical care in rural communities can cost more, but the capitation rates would not show this.

250

Sen. Trow

Asks how the RFP is going to be performed.

257

Bob DuPree

Deputy Administrator, Office of Oregon Health Policy and Research. Explains what the actuaries will do in Oregon.

276

Sen. Ferrioli

Describes former task force that visited rural Oregon a couple of years ago. Suggests their sharing the experience with the RFP organization.

280

Sen. George

Asks how Oregon compares with the 30 states not participating in this type of program in payment to hospitals and doctors.

300

Dr. Santa

Replies there are studies available showing comparable reimbursement rate by states.  Says Oregon compares well for primary care services, but not as well for surgical services.  Says it is more difficult to compare services on the hospital side.

323

Sen. George

Mentions the Secretary of State audit report saying primary providers are leaving because they’re losing money.  Is that correct?

331

Dr. Santa

Mentions providers who have been replaced by smaller HMO’s.  Says the state significantly increased reimbursement last October, but the state’s increases are still falling short of the market. Industry costs are increasing significantly.

393

Sen. Ferrioli

Asks if Oregon is 49th out of 50 states in physician reimbursement rates. Says this is driving the recruitment and retention issues.

403

Dr. Santa

Says, overall, we are lower than average; Oregon is around 38th.

409

Sen. Ferrioli

Asks if that is overall reimbursements.

412

Dr. Santa

Replies physicians only.

TAPE 7, B

009

Sen. Ferrioli

Requests rankings on reimbursements.

010

Dr. Santa

Says he will get those to the committee.  Points out documents in the packets.

016

Sen. Trow

Asks how the work groups and the actuarial inter-relate.

021

Dr. Santa

Explains the work groups are ongoing and they are to interact with the actuary.  The physician group will be asked if they are aware of an alternative to RBRBS (the Medicare methodology for paying physicians). Says physicians were unhappy with that and a new system may have to be looked at.

036

Sen. Trow

Asks if options and recommendations go to the next Legislative session.

044

Dr. Santa

Responds that is what the bill calls for.  Continues pointing out the health care drivers – especially the increased costs in all sectors of the health care industry.  Refers to (EXHIBITS K & L) and a website showing where Oregon ranks in terms of state spending per Medicaid enrollee (EXHIBIT M) refers to chart (EXHIBIT N).

126

Sen. Ferrioli

Refers to trends in exhibit. Discusses health care cost drivers. Discusses fraud and abuse drivers.

144

Dr. Santa

Says he is not aware of that study.

146

Sen. Trow

Asks if there is an average estimation on program abuse.

152

Dr. Santa

Says he would assume so. Explains how fraud and abuse is handled.

160

Sen. Trow

Asks about fraud and abuse in the system.

166

Dr. Santa

Points out areas where fraud might occur. Says where there is a lot of money, there is a lot of opportunity.  States risk should become more predictable. 

195

Dr. Santa

Third area: cost shift – the waiver brings in federal dollars which should mean less cost share, not more.  Mentions statistics on the uninsured.

227

Dr. Santa

Refers to a study by Providence/Health System report entitled Continuity & Turbulence in an Expanded Medicaid Managed Care Program (EXHIBIT O).  Encourages the committee to talk to the people who did this report.

299

Chair Minnis

Says the line has to be drawn somewhere.

304

Dr. Santa

Says the waiver creates a sliding scale which gives people an alternative as their income rises.  Talks about the importance of a six-month lapse in insurance.  Says the waiver creates options that were not there before.

334

Chair Minnis

Asks if there is staff, like Paul Warner, who could plug this into a chart.

340

Dr. Santa

Replies it is a complex picture.  Says he is worried about hospitals in Coos Bay and Grants Pass who are the primary employers and would suffer if the program is cut back. 

364

Sen. Gordly

Asks that the people who provided this report come before the committee.

369

Dr. Santa

Absolutely.

370

Sen. Gordly

Can we take time to hear from the Robert Wood Johnson Foundation?

385

Chair Minnis

Replies if it applies in a limited-resource environment.

400

Sen. Gordly

Recommends seeking as much objective information as we can get.

412

Dr. Santa

Points out this is the first time the federal government is going to enroll people and let some of them choose between a private and public insurance – a truly original idea.

438

Chair Minnis

Sounds good, but who is going to do the data.

443

Dr. Santa

Says a grant has come from RWJ foundation to prepare the waiver; the state will be overrun with researchers because of the offerings in the waiver.

TAPE 8, B

013

Jim Neely

Deputy Assistant Director, DHS.  Submits (EXHIBIT P). Refers to the Audit Section in the committee’s notebook. 

025

Chair Minnis

Asks if he would respond to the audits in writing.

127

Neely

Says he would be happy to respond to what the agency has done in response to the audit.

052

Sen. Clarno

Says Sue Abrams did touch on the agency response yesterday.  Asks if individual tax returns are sought in terms of wages.

058

Neely

Replies he can check wage and hour records, but does not know if the Department of Revenue will share that information.

064

Sen. Clarno

Responds that the individual would have to give permission. Wonders about state and federal permission.

070

Chair Minnis

Reiterates that he wants to know what the agency has done in response to the audits.

078

Sen. Ferrioli

Asks what the Secretary of State is going to do after the audits raised questions.

087

Chair Minnis

Agrees.  Personally he would not be averse to shutting down the OHP system. 

115

Sen. Gordly

This statement causes her to wonder about our collective compassion as legislators and Oregonians, and what will happen to the OHP and the people who rely on it for services. Oregon leads the nation in unemployment and hunger.

163

Chair Minnis

Talks about his poor beginnings. Is worried about how the state of Oregon manages its money.

176

Dr. Santa

Adds that there are lots of actuaries watching these decisions; the biggest challenge is stability.

198

Sen. George

Talks about how the OHP has risen in costs since its inception.  Describes how the program is out of control.

219

Sen. Ferrioli

Talks about the need for compassion to be mixed with discipline to make the plan cost efficient.

311

Sen. Fisher

Agrees.  Points out the need for accountability for the dollars spent.

326

Sen. George

Clarifies the figures he used earlier.

337

Sen. Trow

Knows this is an expensive, but a valuable program.  Some people want a more comprehensive program than we currently have.  Feels this program is cost effective because of what it does for the people in Oregon as a whole; it keeps people healthy and productive.

370

Chair Minnis

Notes the broader discussion of health care in the nation. 

399

Dr. Santa

Says there is no state that has been willing to take on tougher choices than Oregon.  Gives examples.

429

Chair Minnis

Feels the work of the committee could be valuable.

434

Sen. Gordly

Asks if BM 23 passes, what is the plan?

442

Chair Minnis

Adjourns the committee at 5:55 p.m.

 

Submitted by,                        Reviewed by,

 

 

 

Patsy Wood                        Rick Berkobien

Committee Assistant                        Committee Administrator

 

Transcribed by,

 

 

Nancy Massee

Committee Assistant


 

EXHIBIT SUMMARY

 

A –Encounter Data, Pollino, 10 pp

B – Audit Report, Pollino, 8 pp

C – Oregon Health Plan Information, Thorne, Notebook

D – Charts on Income Eligibility and Oregon Health Plans, Throne, 3 pp

E – 1115 Waiver Amendment Application, 5/31/2002, other OHP information, Thorne,

                 118 pp

F -  Written testimony, Rep. Kruse, 5 pp

G – Caseload summery, DHS, 3 pp

H – HB 2519-B, staff, 8 pp

I – Eligibility by County, Thorne, 2 pp

J – Contractor Reimbursements, Dr. Santa, 3 pp

K – Overhead presentation on health care costs, Santa, 14 pp

L – Health Care Cost Trends, Santa, 7 pp

M – State health care facts, Santa, 4 pp

N – Personal Health Care Spending Per Capita Charts, Santa, 3 pp

O – Continuity & Turbulence in an Expanded Medicaid

        Managed Care Program, Santa, 3 pp

P – Chart on income levels under 100% FPL, Neely, 1 p