This story was originally published by The Lund Report, an independent nonprofit health news organization based in Oregon. It is republished with permission. You can reach Nick Budnick at nick@thelundreport.org.
Oregon State Capitol building, May 18, 2021. The capitol was completed in 1938 and is topped with a gilded bronze statue of the Oregon Pioneer.
Kristyna Wentz-Graff / OPB
As rate cuts by insurers buffet medical and behavioral health providers across the state, the Oregon Health Authority is asking lawmakers to authorize dozens of new employees while further slashing funding for family doctors, primary care clinics, pediatricians and OB-GYNS who serve low-income Oregonians.
Deputy Director Dave Baden said the health authority doesn’t have much choice in light of the Congressional tax-and-spending bill approved last summer. But in a legislative budget committee hearing on Tuesday, some lawmakers questioned aspects of the agency’s proposal to tweak its budget, saying it went too far.
For instance, the agency’s push to cut from the Oregon Health Plan more than $200 million in quality incentive funds used to pay providers raised questions for Rep. Ed Diehl, a Republican from Stayton who sits on the Human Services Subcommittee of the Joint Ways and Means budget-writing committee.
“My understanding is the purpose of that (quality funding) is to save us money,” Diehl said, referring to how the funds are used to support high-quality and value-based care. “Why would we cut it?”
He added that the proposed cut makes him question the effectiveness of the incentive program, which was considered a centerpiece of Oregon’s Medicaid reforms of more than a decade ago. “If it’s working, I would think that would be one of the last knobs you turn if it’s doing its objective — which is to reduce the overall cost of care,” he said.
The move to cut the funds — which comes as providers increasingly pull out of providing primary care and other services to lower-income Oregonians — has sparked concerns from providers around the state. The state’s formal budget request now adds more detail.
About 85% of the funds go directly to providers such as general practitioners and family medicine clinics who serve lower-income people, meaning a total hit to them of $170 million in the current fiscal year. Many count on the funds to pay bills and keep the doors open, providers told The Lund Report last year.
Sen. Cedric Hayden, a Republican from Fall Creek, also asked about the cut. “What effect,” he said, “would that have on primary care providers?”
Baden agreed it would have an impact but did not elaborate. “There is an impact downstream to providers for quality pool spending, and what happens at the primary care table,” he said.
Agency continues growth as HR 1 cuts loom
In all, the agency is asking for funding for about 27 additional positions. That comes on top of the 5,997 positions approved last year in the budget, which itself was an increase of about 250.
That does not include more than $5 million worth of additional positions the agency expects to add later this year to support rural health improvements using a recent federal grant.
On Tuesday, the committee did not vote to approve the agency’s request, instead accepting the report as information. The committee’s staff continues to gather information to make recommendations to the full budget committee in February.
Other lawmakers, such as Rep. Travis Nelson, a Democrat from Portland, questioned how the expense of the changes mandated by Congress compared to any potential savings for the Oregon Health Plan, which is the state’s version of Medicaid. The federal House Resolution 1, or HR 1, added work requirements to Medicaid and mandates for more frequent eligibility checks — twice a year as compared to the current every other year.
“The costs associated with implementing the big, beautiful bill are a lot more than I realized,” Nelson said. “I don’t think most people realize how much this is going to cost the state to implement.”
Rep. Cyrus Javadi, a Tillamook dentist who recently left the Republican Party, added, “It sounds like to me … we’re just shifting costs. The cost still exists, this cost for health care, the cost of people being hungry … etc, still out there. We just don’t have the resources to pay for it yet. We will also be demanding more resources to track it … the costs and the savings don’t really exist, they just are shifted onto the backs of providers and small businesses, etc, throughout the state.”
Sen. WInsvey Campos, the chair of the subcommittee and an Aloha Democrat, added that “at the end of the day, folks don’t stop needing care. They don’t stop needing access to food. We just stress different parts of the system to be able to make sure that folks are fed, to make sure that folks are able to access the care that they need.”
Diehl, however, pointed to the fact that Oregon has a higher rate of people enrolled in Medicaid than many states. In part, that’s because it was one of the first states to expand Medicaid eligibility under Obamacare and also modified the program to expand eligibility to children. He said the state’s SNAP enrollment for food assistance is also high.
“It’s important to note that Oregon has double the number of people on Medicaid compared to some states, maybe considerably more,” he said. “What is wrong in Oregon that we have to have one in three people on Medicaid, and 18% of people on SNAP?”
Baden, of the health authority, when asked to explain why the state is taking money from struggling health care providers while increasing the agency’s size, told The Lund Report that “We did not ask for HR 1. We have to implement very quickly a really large IT system investment ... We do need some positions in order for us to successfully try to keep as many people covered as we can, and also make sure that we put an IT system in place that works.”
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