SENATE SPECIAL COMMITTEE ON

ACCESS TO THE OREGON HEALTH PLAN

 

 

September 09, 2002   Hearing Room 50

10:00 a.m.  Tapes 11 - 12

 

MEMBERS PRESENT:            Sen. John Minnis, Chair

                                                Sen. Bev Clarno

                                                Sen. Ted Ferrioli

Sen. Cliff Trow

 

MEMBERS EXCUSED:             Sen. Bill Fisher

Sen. Gary George

Sen. Avel Gordly

Sen. Rick Metsger

Sen. Frank Shields

 

VISITING MEMBER:                 Sen. Ken Messerle

 

STAFF PRESENT:                  Rick Berkobien, Administrator

                                                Craig Prins, Counsel

                                                Patsy Wood, Committee Assistant

 

ISSUES HEARD:                     Invited Testimony Only

                                                     OHP Mental Health

                                                     DHS Policy Making

 

 

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 11, A

004

Chair Minnis

Calls the meeting to order at 10:15 a.m. 

015

Barry Kast

Assistant Director, Health Services, Department of Human Services (DHS).  Points out the reorganization of DHS which has now put mental health under the category of Health Services.  Informs the committee that they will be discussing the introduction of mental health into the Oregon Health Plan (OHP).

040

Chair Minnis

Notes his unfamiliarity with the previous DHS organization, and asks about the connection between the state and county mental health.

047

Kast

Discusses the partnerships DHS Health Services has with local providers and organizations. 

071

Sen. Trow

Asks if there is still a Health Department within the DHS structure.

074

Kast

Says the legislature abolished the Health Division and gave those responsibilities to the director.  Explains the new structure of the Health Division.

088

Chair Minnis

Comments that agency people shouldn’t assume that legislators know an agency’s organizational structure, and notes that staff has handed out DHS organizational charts (EXHIBIT A). 

105

Margy Johnson

Deputy Assistant Director, Health Services, DHS.  Gives a brief history of how mental health was included in the OHP. 

  • 1995: pilot phase-in of only 25% of Medicaid-eligible population covered under the OHP. 
  • 1997: mental health approved statewide. 
  • 1998: up to 100% phase-in of mental health. 

Says contractors are single-county agencies or groups of counties.  Of 10 mental health organizations, all but 3 are county-based and the seven county-based have 90% of enrollees seeking mental health care.

146

Chair Minnis

Asks if counties provide the service or contract for it.

148

Johnson

Notes different ways services are provided.

153

Chair Minnis

Asks if the counties providing the service are reimbursed by the OHP.

157

Johnson

Explains the contractor services and the consortium of counties that has been formed (EXHIBITS B & C).

166

Chair Minnis

Inquires if the consortium of counties provides services or subcontracts for the services.

170

Johnson

Responds that the state contract is an administrative management of the benefit package.

178

Chair Minnis

Tries to clarify the cash flow.

180

Johnson

Explains the relationship between the mental health organizations and the counties.

194

Chair Minnis

Asks what happens to the money after the state gives it to the mental health organization who distributes it to the counties.

195

Johnson

Responds that services are then provided by the county or by a subcontractor.

206

Chair Minnis

Asks how the fee-for-service fits within this framework.

208

Kast

Explains the essence of the OHP’s capitation (managed care component): the state makes a payment based on an actuarial estimate of cost.

211

Chair Minnis

Asks: is it so much money per enrollee or is it fee-for-service or both.

214

Kast

Replies that capitation payments are paid on a per-member, per-month basis and the rates depend on which eligibility category an individual is in, so it costs more for a disabled person to receive health care.

218

Chair Minnis

Wonders if the entire system is set up that way.

221

Kast

Says rates don’t change no matter how large the mental health organization is.  Describes how the counties have “grouped” themselves to alleviate some of the health-care risk.  Points out the individual contracts they have with Clackamas, Lane and Multnomah County.

249

Chair Minnis

Notes this is complicated and wonders if it is necessarily so.

250

Kast

Discusses how the administrative model seems to be working in terms of more people being served without rates going up significantly. 

271

Chair Minnis

Asks if anyone has ever looked at how much money gets to patients after all the administrative costs are filtered out.

285

Kast

Notes the costs explored by the Office of Medical Assistance Program (OMAP).  Says that information could be quantified for the committee, but not today.

304

Chair Minnis

Questions if all these layers of administration are the best model for delivering mental health services.

315

Kast

Maintains that people are getting services who never had access to mental health before, but others are still waiting to get into the system.

327

Chair Minnis

Asks if all categorical eligibles fit into mental health.

331

Kast

Nods affirmatively.

332

Chair Minnis

Asks: if the state rescinded the OHP and went back to the basic Medicaid package required by the federal government, would mental health be included.

336

Johnson

Responds that mental health is part of the OHP.

337

Chair Minnis

Understands mental health is part of OHP, but wonders if it is included in the federal minimum for Medicaid.

340

Johnson

Says, no.

345

Rick Berkobien

Committee Administrator.  Asks Mr. Kast to touch on the integrated model approach that Oregon has been exploring with regards to acute health and mental health.

352

Kast

Before he answers the question about the integrated system, he notes that pharmaceuticals are not a part of mental health integration (capitation), but paid for on a fee-for-service basis.

365

Chair Minnis

Asks if pharmaceutical reimbursement to providers is separate.

374

Kast

Responds affirmatively, saying the cost for psycho tropic drugs is about $250 million per biennium.

385

Sen. Messerle

Points out that one county in his district had developed an ending balance of between $6.5 and $6.9 million in seven years.  Notes that the Mental Health Organizations (MHOs) are required to retain a $250,000 reserve, but asks if counties are required to do this.

411

Johnson

Says that reserve figure is a requirement of the MHO contract, but is not a requirement of the counties.

423

Sen. Messerle

Asks if other contractors below the MHO should carry a reserve.

428

Johnson

Replies that the counties revenue and expenses have been reviewed quarterly as part of the financial statement review of the MHOs, and it is up to the MHOs to make sure the subcontractors are in a sustainable position.

TAPE 12, A

014

Sen. Messerle

Asks two questions: 1) are the MHO’s appropriate in today’s society; and 2) would fee-for-service be more appropriate so services get to the citizens.

038

Chair Minnis

Notes confusion regarding the $6.9 million reserve by the MHO in Sen. Messerle’s district.

042

Sen. Messerle

Points out that the $6.5 - $6.9 million reserve is held by Coos County, not the MHO.

048

Chair Minnis

Asks if the Jefferson Behavioral Health MHO has a $250,000 reserve.

050

Sen. Messerle

Yes.  Has found that some counties have inadequate reserves while two counties in the state have very large reserves.

056

Chair Minnis

Wonders if reserves could be brought back into the state coffers for use elsewhere.

059

Sen. Messerle

Says that cannot be done.

061

Kast

Gives background history of the accounting procedures of the mental health organizations and the counties. 

116

Kast

Mentions that Coos County is planning on spending some of their reserve on a new building which can run a modern mental health program.  Explains how the Coos County reserve was accumulated.  Says greater consistency needs to be brought to financial reporting. 

136

Kast

Notes that under the current law, the state cannot ask for the $6 million reserve to be returned.  However, a proposed rate adjustment with the counties would prevent future overpayments.

145

Sen. Trow

Asks if reserves were built up because patients went unserved.

147

Kast

Responds that patients may have gone unserved or the capacity may not have been there to serve them.  Notes these kinds of distortions (accumulations of capital) occur in areas other than mental health.

164

Sen. Trow

Wonders if those organizations/counties who prosper are not serving patients, and those with little money are serving many.

166

Kast

Responds that he couldn’t conclude that.

167

Chair Minnis

Asks why not.

170

Kast

Replies that the funding chosen by the legislature for the Oregon Health Plan is a risk-based model and risk management is unpredictable. 

187

Chair Minnis

Asks where this risk-based model is codified in statute.

194

Johnson

Responds that ORS 414 describes the rate-setting process that recognizes the actual rate to providers and this same language applies to the mental health rate-setting process.

206

Chair Minnis

Asserts that this statute should be more closely examined.  Recounts stories that he has heard from employees of the Multnomah County mental health system that monies went missing when the previous director left.

232

Kast

Describes how capitation is risk-based. 

242

Chair Minnis

Gives a brief history of de-institutionalizing mental health in 1993.

255

Kast

Discusses the building to be used for mental health patients in Coos Co.

268

Chair Minnis

Questions using operational funds to build a building.

278

Kast

Stresses that funds have not been redirected from patient care to build this new facility.

282

Chair Minnis

Asks how they would know that monies were not being set aside for another purpose.

282

Kast

Replies that data would indicate if that was happening.

309

Sen. Ferrioli

Offers a scenario: if the county had a surplus and the agency said they could expense certain items, wouldn’t that shift mental health funds to the general fund of the county?

322

Kast

Repeats that there are different accounting procedures in each county.

343

Sen. Ferrioli

Wonders if the standardized accounting system used for education could be used for the OHP at the county level.

376

Chair Minnis

Says a discussion on this topic could be had with the counties.

378

Sen. Messerle

Describes areas where Coos County has been able to set aside $1 million/year for the last six to seven years.  Suggests more accountability for the mental health department.  Feels the MHOs are an incentive for a public body to not give service and hopes to take a hard look at this issue next session.

417

Sen. Trow

Asks if patients are not being served when the county has this much reserve.

424

Sen. Messerle

Responds he is getting correspondence to that effect.

429

Sen. Ferrioli

Notes the problems when there is no standard accounting system.

447

Chair Minnis

Asks if the department has talked to the counties about a standardized accounting system.

459

Kast

Says he has not had those discussions.  Notes the federal government has a standard reporting model.

467

Chair Minnis

Indicates he would like to have a briefing on the federal reporting requirements – especially if 36 counties are reporting them differently.

481

Kast

Points out that it has never been in enabling legislation to impose mandatory accounting on the counties – just an annual audit.

491

Chair Minnis

Concurs, but says it would be nice to have things standardized.

TAPE 11, B

035

Sen. Trow

Comments on the need for more monitoring of these programs with the counties.  Asks if the state or the counties contract with the MHOs.

042

Kast

Responds that the state contracts directly with the MHOs and they, in turn, contract with counties.

044

Sen. Trow

Asks if those contracts allow the state a “monitoring” role.

044

Kast

Replies, yes.

047

Johnson

Describes the reports that the agency receives on a quarterly and annual basis that show revenues and expenditures as well as their level of service.

051

Sen. Trow

Wonders if there is some way to know that all patients who require services are being seen.

054

Kast

Mentions the variations in access to services across the counties.

061

Sen. Trow

Asks if the department can demand a high level of performance from a county if a report shows it is lacking.

062

Kast

Says, definitely.

062

Johnson

Responds affirmatively.

063

Chair Minnis

Inquires how the department would demand that accountability.

064

Kast

Explains the mechanisms for that process.

078

Chair Minnis

Asks about the number and status of providers available in the local communities.

085

Johnson

Points out how the provider base has been growing in most communities with emphasis on out-patient treatment and early intervention.

098

Chair Minnis

Inquires if the department has been able to track emotionally disturbed persons (usually homeless) to see if their needs are being met.

106

Kast

Discusses changes made as the size of the state hospitals was changing: 1) get acute patients in other hospitals; and 2) place long-term care patients into community settings.  Notes that group homes did not take care of the growing problems of the mentally ill and many found their way into the criminal justice system. 

138

Chair Minnis

Comments on the lack of time spent on the issue of mental health. 

163

Kast

Acknowledges a work group appointed by the Governor last interim on the adequacy of the mental health system.  Points out that budgets for mental health services for adults, across the country, have declined when they should have risen with the close of facilities. 

186

Sen. Trow

Inquires if the state is satisfied with the level of service being provided by the Mental Health Organizations (Exhibit B).

198

Kast

Says we’re never satisfied, but pleased they stuck with us after their rates were cut a year ago.

203

Sen. Trow

Wonders if the providers feel they are being adequately funded to perform their job.

205

Kast

Responds that he hasn’t heard they are not happy with the state.

211

Sen. Trow

Asks if other contractors have very large reserves.

214

Kast

Indicates most do not have large reserves and explains how net worth values are highly variable.

223

Sen. Trow

Asks for clarification that the state wants providers to have some reserve.

225

Kast

Replies, yes, they must have a reserve that can sustain them.

227

Sen. Trow

Asks if the state can look into excessive reserves.

229

Kast

Responds affirmatively.

237

Chair Minnis

Encourages legislative members to spend time learning more about this program/process.

249

Kast

Appreciates Sen. Messerle bringing issues forward and hopes the result of this inquiry will be a better-functioning administration and improvements in the whole system.

264

Lynn Read

Assistant Administrator.  Office of Medical Assistance Programs (OMAP).  Submits handouts (EXHIBITS D & E).  Describes Exhibit E in more detail.  Talks about Medicaid within the Oregon Health Plan (OHP). 

314

Read

Says the OHP is driven by the health-care marketplace – not the other way around.  Describes DHS organization in more detail (Exhibit A). 

367

Read

Continues to describe the organizational “clusters” within DHS.

418

Read

Continues to describe the organizational “clusters” within DHS.

449

Read

Explains Exhibit D in more detail. 

TAPE 12, B

019

Read

Describes OMAPs process for setting policy.

058

Chair Minnis

Asks who does the legal work for OMAP and the Oregon Health Plan.

062

Read

Responds that General Counsel Linda Grimms (DOJ) would be the first contact.

069

Chair Minnis

Asks about the frequency of lawsuits for OMAP and the OHP.

071

Read

Replies that lawsuits filed are represented by the Department of Justice.

078

Chair Minnis

Wants Bobby Mink (DHS Director) to come in and talk about the decision-making process for the OHP.  Asks who the key decision-makers are, when they meet and their relationship to the federal government.

092

Read

Responds that Barry Kast heads the Health Services division of DHS and has the ultimate responsibility for the Oregon Health Plan.

105

Chair Minnis

Wonders how much latitude managers have to make decisions.  Expresses an additional interest in learning how the decision-making and policy-making occurs in DHS and the department’s relationship with the federal government on health policy. 

123

Sen. Trow

Asks who in DHS does contracting with the HMOs.

125

Read

Replies that those contracts are done in OMAP.

129

Sen. Trow

Inquires if the contracts are uniform from one provider to another.

133

Read

Responds that the contracts are generally uniform for the MHOs.

139

Sen. Trow

Asks if they are based on actuarial studies.

139

Read

Says, yes.  Notes that the MHOs use the counties as their delivery system which is a little different for the HMOs.

148

Sen. Trow

Inquires about a lawsuit with Deschutes County over inadequacy of funding.  Asks if that is something different than the contract that was negotiated with them.

151

Read

Replies she hasn’t reviewed the complaint from the Central Oregon Independent Health Services (COIHS) plan, but says the lawsuit relates to their contract and is currently being reviewed by the Department of Justice.

157

Sen. Trow

Asks if the contract is due to expire so it could be renegotiated.

158

Read

Responds that all of the contracts come due at the end of September so the new contracts are out for signature for October 1.

161

Sen. Trow

Inquires if the state has not lived up to their end of the contract and thus the lawsuit. 

162

Read

Replies that she cannot comment on an on-going lawsuit.

171

Sen. Clarno

Declares a conflict because she is on the Central Oregon Independent Health Services (COIHS) board.

175

Chair Minnis

Recesses the committee at 11:50 a.m.

 

 

The committee is not reconvened by midnight, so by implied consent, the committee is adjourned.

 

Submitted By,                        Reviewed By,

 

 

 

Patsy Wood                        Rick Berkobien,

Committee Assistant                        Administrator

 

EXHIBIT SUMMARY

 

A – Department of Human Services Organizational Charts, submitted by staff, 19 pgs.

B – Mental Health Organization Contractors, submitted by Barry Kast, DHS, 1 pg.

C – Mental Health Organization Liaisons, Start-up Dates, and Client Access Numbers, submitted by Barry Kast, DHS, 8 pgs.

D – Health Services Office of Medical Assistance Programs Organizational Chart, dated 8/2002, submitted by Lynn Read, DHS, 1 pg.

E – Chart on Medicaid and the Oregon Health Plan, submitted by Lynn Read, DHS, 1 pg.