Feds approve Oregon's Medicaid coordinated-care initiative

Oregon has received federal approval and promises of enhanced Medicaid funding to begin treating thousands of patients through provider networks called coordinated-care organizations whose goal is to use prevention and coordination of mental and physical healthcare to reduce overall costs.

The CMS on Monday (PDF) approved Oregon's Medicaid demonstration program, which comes with $1.9 billion in additional funding over five years to help improve and coordinate care for many of the state's 600,000 Medicaid recipients. That includes 39% of the children in the state, and 16% of the total population.

The state has certified eight coordinated-care organizations to begin serving 20 counties starting Aug. 1. Last week, the state announced provisional certification for six more CCOs that would begin serving 19 counties on Sept. 1, including the closely watched TriCounty Medicaid Collaborative covering the Portland-area counties of Clackamas, Multnomah and Washington.

Those 14 CCOs are expected to cover about 90% of the state's Medicaid population, state officials have said. The program is projected to save about $11 billion over 10 years.

Although states across the country are experimenting with Medicaid-based accountable care-style organizations, Oregon officials have said they believe their program is different because of its locally controlled budget framework, and emphasis preventive care, and coordination of medical, mental and dental care.

The program includes a requirement that providers within CCOs share information amongst themselves on ways to produce better patient outcomes. To allay antitrust concerns, state lawmakers declared the CCOs “in the best interest of the public” and shielded them from federal antitrust laws by invoking the doctrine of state action.