HOUSE COMMITTEE ON

AUDIT & HUMAN SERVICES BUDGET REFORM

April 07, 2003 Hearing Room 50

3:15 PM Tapes 84 - 87

MEMBERS PRESENT: Rep. Ben Westlund, Chair

Rep. Steve March, Vice-Chair

Rep. Jeff Kruse

Rep. Jeff Merkley

Rep. Alan Bates

MEMBERS EXCUSED: Rep. Randy Miller

Rep. Susan Morgan, Vice-Chair

GUEST MEMBERS: Rep. Mitch Greenlick

Rep. Carolyn Tomei

Rep. Laurie Monnes Anderson

Rep. Gordon Anderson

STAFF PRESENT: Rick Berkobien, Committee Administrator

Kelly Fuller, Committee Assistant

ISSUES HEARD: INVITED TESTIMONY ONLY

Context for the Mercer Project and Introduction of Mercer Panel Bruce Goldberg MD, Office of Oregon Health and Policy Research

Review of Mercer Report

James Matthisen, Mercer Human Resource Consulting

Implication of Current Environment in Oregon and Nationally

Steve Schramm and Stephanie Davis, Mercer Human Resource Consulting

OHP Fully Capitated Health Plan Panel Comments on Mercer Report

Bill Murray, DOCS Health Plan

Dean Andretta, Mid-Valley IPA

Question & Answer: on House Audit Committee's Report

James Matthisen, Steve Schramm and Stephanie Davis

Mercer Human Resource Consulting

Bill Murray, DOCS Health Plan

Dean Andretta, Mid-Valley IPA

MEASURES:

HB 2537 Public Hearing

HB 2559 Public Hearing

HB 2560 Public Hearing

HB 2641 Public Hearing

HB 2562 Public Hearing

HB 2829 Public Hearing

HB 2189 Public Hearing

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 84, A
003	Chair Westlund	Calls the meeting to order and opens for Public Hearing. Hands the gavel over to Rep. Kruse to tap in and tap out the house bills for the public hearing.
HB 2537 PUBLIC HEARING
031	Rep. Kruse	Opens HB 2537
032	Rep. Kruse	Closes HB 2537
HB 2559 PUBLIC HEARING
033	Rep. Kruse	Opens HB 2559
034	Rep. Kruse	Closes HB 2559
HB 2560 PUBLIC HEARING
035	Rep. Kruse	Opens HB 2560
036	Rep. Kruse	Closes HB 2560
HB 2641 PUBLIC HEARING
037	Rep. Kruse	Opens HB 2641
038	Rep. Kruse	Closes HB 2641
HB 2562 PUBLIC HEARING
039	Rep. Kruse	Opens HB 2562
040	Rep. Kruse	Closes HB 2562
HB 2829 PUBLIC HEARING
041	Rep. Kruse	Opens HB 2829
042	Rep. Kruse	Closes HB 2829
HB 2189 PUBLIC HEARING
043	Rep. Kruse	Opens HB 2189
044	Rep. Kruse	Closes HB 2189
045	Chair Westlund	Closes the public hearing.
INFORMATIONAL MEETING
050	Chair Westlund	Opens the informational meeting for invited testimony, and calls the first witness.
060	Bruce Goldberg, MD	Introduces himself from Office of Health Policy and Research and begins his testimony.
090	Goldberg	Invites the next three witness to testify.
095	James Matthisen	Introduces himself from Mercer Human Resource Consulting.
100	Stephanie Davis	Introduces herself from Mercer Human Resource Consulting.
105	Steve Schramm	Introduces herself from Mercer Human Resource Consulting.
108	Matthisen	Presents testimony and begins presentation. (EXHIBIT A).
150	Rep. Greenlick	Comments that there are lots of different definitions of equity and asks did you really discuss what version of equity that you mean.
159	Matthisen	Responds that they did try to put more flesh around the names for criteria in the full report.
175	Rep. Greenlick	Are you talking about equity as in comparing physicians to hospitals.
183	Matthisen	Responds yes, physicians verses hospitals.
195	Rep. Greenlick	Wants more elaboration about the equity that they are referring to, asks do you mean I will be treated fairly if I have been given more.
197	Matthisen	Responds in more detail to the question.
125	Chair Westlund	Makes comments to clarify the questions of equity.
138	Rep. Greenlick	Makes additional comments.
244	Matthisen	Makes comments about some peoples comments about them not keeping pace and continues presentation.
TAPE 85, A
064	Chair Westlund	Looking at the Mercer report he is assuming that this category on page 7 shows some kind of weighting on a stronger recommendations or ability to accomplish and elaborates. (EXHIBIT A 4/1/03)
081	Matthisen	Responds to the question on page 7 of the Mercer of the report.
098	Rep. Greenlick	Asks if he could go across the top line of this page 7 and give more elaboration and help to define the assessments and share how utilization of service and unit cost got one check and ASO got two checks.
120	Matthisen	Explains the category about equity among providers.
130	Rep. Greenlick	Responds that’s not really the equity it is criteria of how closely controlled the reimbursement that the state does, asks is that your definition of equity.
135	Matthisen	Responds it is how much the method allows the equity goal to be influenced by the state.
148	Rep. Greenlick	Responds no, it is how much the actual reimbursement is determined by the state.
157	Matthisen	Responds, yes.
160	Rep. Greenlick	So that criterion should not be equity it should be the extend to which the state rather than somebody else determines the distribution of payments and elaborates.
162	Matthisen	Comment that there is a proceed problem with its current method.
170	Rep. Greenlick	Makes additional comments on page 7 of the report.
175	Matthisen	Responds yes, that is correct.
178	Rep. Greenlick	Comments that if you stack the deck so that one definition automatically gets a four and the other gets a one regardless of whether there is equity or not, then you have defined it that way.
184	Matthisen	Responds yes, that they have had to pick a context and elaborates.
201	Rep. Merkley	Asks if they thought about the equity verses providers as an option.
216	Matthisen	Responds no, not an explicit analysis and continues presentation.
287	Steve Schramm	Begins his testimony and explains (EXHIBIT B).
TAPE 84, B
027	Vice Chair March	Asks is there one state that might be doing stellar in any of these categories.
030	Schramm	Responds by listing the stellar states and continues presentation.
114	Rep. Greenlick	Asks if this just like the fee for services we use to have.
116	Schramm	Responds that yes, it is very similar to the old fee for service way of doing things.
120	Rep. Greenlick	Asks if they didn’t rate that high in administrative feasibility.
123	Schramm	Responds about the administrative feasibility and continues presentation.
212	Vice Chair March	Asks how long it took Tennessee to work through the process.
218	Schramm	Responds that it to Tennessee 18 months to negotiate with ASO.
227	Stephanie Davis	Makes comments about why other states went to an ASO and comments that we should look at what is working now and work on that.
272	Rep. Bates	Asks how you would go about setting capitation rates.
183	Schramm	Responds that they are the consultants to 20 – 28 programs right now and comments about the 3 points of data that the states use to make these decisions.
328	Rep. Bates	Asks how accurate they have been in the last couple of years.
332	Schramm	Responds about their accuracy in the last few years.
352	Rep. Greenlick	Asks if they risk just those rates.
356	Schramm	Responds that it is a policy adjustment.
363	Rep. Greenlick	Do you find that when you do risk adjustment it decrease you ability to predict accurately.
375	Schramm	Responds about risk adjustment models.
394	Rep. Greenlick	Comments that it really does improve your estimates.
002	Schramm	Comments what they believe about risk adjustments and describes the difficulty that they have.
TAPE 85, B
011	Davis	Makes comment about risk adjustment models.
024	Rep. Greenlick	Makes additional comments.
027	Rep. Bates	Asks his question from above again, as it was not clear before and re-asks how accurate their predictions have been.
050	Schramm	Responds that they usually hit within the range that is given to them as a model and comments that they try to set a wider range because of a lack of information and etc.
070	Vice Chair March	Thanks the witness for their testimony and ask the next witnesses to come up.
078	Bill Murray	Introduces himself from DOCS Health Plan and begins presentation.
120	Dean Andretta	Introduces himself from Mid Valley Individual Physicians Association and begins presentation.
151	Rep. Greenlick	Asks how they would define equity.
156	Murray	Responds with his definition of equity.
177	Andretta	Responds with his definition of equity and elaborates.
207	Vice Chair March	Opens the question and answer part of the meeting on the House Audit Committee Report.
216	Matthisen	Makes comments about how helpful the committee has been.
224	Rep. Bates	Asks Bill Murray if he is missing something in this process of capitation rates.
242	Murray	Responds to the question on capitation rates.
272	Chair Westlund	Comments that he is still confused on this chart on page 7 of the Mercer Report, the fee for service report scores higher, can you explain that.
288	Schramm	Responds on the issues that Mercer would have with that.
324	Chair Westlund	Appreciates him pointing this stuff out but he still looks at this thing and comments that the ASO is just kicking the RUV’s tail.
345	Rep. Greenlick	He thinks the value of this chart would be how you can rate these things.
379	Matthisen	Comments about the value of this chart and goes back over the part which describes equity among providers.
TAPE 86, A
003	Chair Westlund	On page two of the Mercer Report was there anything on the RFP that caused them to evaluate the current methodology.
016	Matthisen	Comments how they went about creating this report.
025	Chair Westlund	How is this relevant to me and help with our decision making process in here.
031	Matthisen	Comments again their charge was not to compare reports and comments about how they created it.
043	Rep. Bates	Comments that as he was looking at the report he asks where we want to go with the health plan, he sees that toward the end of the report it looks like they are dropping people out of the plan. How do you get people in the plans to stay in the plans and what have other states done to keep people in the plans.
070	Davis	Describes the element that causes confusion that does not in other States.
158	Schramm	Address how they are getting more people into Managed Care Plans.
180	Chair Westlund	Comments about hearing the more general question on what other states are doing, asks what is happening Nationally.
188	Schramm	Comments about what is going on Nationally.
207	Chair Westlund	Asks if he can break that out away from the commercial end.
214	Schramm	Responds no, because his response was dedicated to Medicaid and elaborates.
221	Chair Westlund	Asks how many states have this model.
228	Schramm	Comments that it is very typical to have many health plans.
240	Chair Westlund	Asks if Oregon is fairly unique.
245	Schramm	Ultimately health care is local and in Oregon you have been able to find fourteen health plans and guarantee access and quality of care, do be a solution in search of a problem.
251	Chair Westlund	One of the keys to this is the local/regional intimacy relationships that are build and that’s why these things are working.
253	Rep. Bates	Comments that he thinks we have an exceptional program and was looking for a comment if we really are unique and if we are how do we go about sharing this.
278	Davis	Comments that most states goal was to have something like we have here today and elaborates.
332	Rep. Bates	Comments about one of the problems we are having here today and asks if other states are facing the problem of not having enough money to bring to the table.
350	Schramm	Responds absolutely, and elaborates.
389	Rep. Bates	Asks if he remembered what that particular population was.
397	Schramm	Responds yes, that it was associated parents for an SCHIP program.
TAPE 87, A
001	Rep. Bates	Asks if other states have tried to increase revenues in other ways.
004	Schramm	Responds yes, and makes comments about the ways that they are trying to increase revenues in other states.
016	Chair Westlund	Asks what has the states success been with these.
019	Schramm	Responds about the success rate.
026	Chair Westlund	Asks if there is a bit on negotiation going on and putting together some creative financing.
037	Schramm	Responds to the negotiations that he is aware of.
050	Chair Westlund	Calls meeting to a close and adjourns 5:42 pm

EXHIBIT SUMMARY

A – Overview of Mercer Report “A Study of Alternative Rate Setting Approaches for Oregon Health Plan Fully –Capitated Plans” presented by James Matthisen 4 pp.

B – Risk Continuum Models – presented by Steve Schramm 1 p.