Payment Reform Legislation - The First Step

July 1, 2015   |  Tags: Blog   |  Tags: Payment , Legislation , Cost , OHA PCPCH
Kerry Gonzales

In late 2103, the primary care community and most of the major insurers in Oregon signed the Multipayer Strategy to Support Primary Care Homes. The intent of that agreement was to encourage mutual investment and commitment to Patient-Centered Primary Care Homes (PCPCHs) in Oregon, considered the best way to reach the triple aim of better health, better care and lower costs.

After surveying commercial insurers seven months later it was clear that, although several insurers were making efforts to support PCPCHs, there was not universal participation, nor were the efforts by some enough to sustain the substantial investments in time, technology and staff primary care clinics had made to become PCPCHs. Information from clinics in Oregon, and from health economists nationally, demonstrates that implementing the PCPCH or medical home model has increased clinic overhead by about 25%.  Under the traditional fee-for-service payment system, these services are not billable and there is no way for the clinics to recoup these costs.

In response to this challenge two payment reform bills submitted to the Legislature in 2015, one from the Oregon Academy of Family Physicians (OAFP) and others in the primary care community, and the other from the Oregon Health Authority (OHA).  Ultimately the second bill, SB 231, passed and is currently awaiting a signature for Governor Kate Brown.  The bill has four main components:

  1. It directs the Insurance Division and OHA to clearly define what constitutes “primary care spending”
  2. Commercial insurers, OEBB, PEBB and the CCOs are required to report their primary care spending by December 31, 2015
  3. OHA will convene a voluntary collaborative to discuss alternative payment methodologies
  4. There is limited antitrust exemption for discussions within the collaborative so stakeholders are able to effectively align efforts, metrics, and financial incentives. This alignment is critical to encourage strong primary care infrastructure and innovation in Oregon.

Reporting of this data is the first step on the road to meaningful payment reform.  Simultaneous with this effort, the Oregon Academy of Family Physicians (OAFP) and its partners are collecting data to determine how much it costs a clinic to provide robust PCPCH services.  With these two important pieces of information, we will be able to see the disconnect between what the 550 primary care practices that have achieved PCPCH recognition are being asked to do and what they are being paid to do.

Kerry Gonzales is the Executive Director of the Oregon Academy of Family Physicians (OAFP). With over 1,400 members OAFP is the largest medical specialty society in Oregon and is the state chapter of the American Academy of Family Physicians.  Kerry graduated from Lewis and Clark College in 1976. Before joining us at the OAFP in 1991 she was the Administrator for a law firm in Portland. She and her husband Marc have two children.