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3 Crucial Ways to Improve House Bill 4069 to Establish the Aligning for Health Pilot Program

House Bill 4069, introduced by Representative Maxine Dexter during the 2024 Regular Session of the Oregon Legislative Assembly, proposes the establishment of the Aligning for Health Pilot Program. This initiative, administered by the Oregon Health Authority (OHA), aims to test alternative payment methods in healthcare with the overarching goal of improving health outcomes and cost containment. The legislative session ended while the bill was in committee. Representative Dexter resiged August 31, 2024. There is reason to believe the the Oregon Health Authority will newly elected Representative Shannon Jones Isadore, to reintroduce HB 4069.

Key Features of the House Bill 4069

1. Establishment and Goals

  • The program seeks to create more predictable, aligned payment models and metrics for healthcare providers.

  • It aims to increase the number of providers receiving population-based payments tied to health outcomes.

  • The program encourages innovation in care delivery and addresses complex health drivers.

  • It emphasizes equitable access to quality health services and better health outcomes.

2. Implementation Phases

  • Phase One: Planning includes hiring staff, conducting necessary analyses, and engaging stakeholders.

  • Phase Two: Finalizing risk mitigation strategies, engaging providers with technical support, and soliciting proposals from employer groups and payers.

  • Phase Three: Awarding contracts and launching the program with potential expansion based on initial outcomes.

3. Participation Requirements

  • Payers must sign onto the Value-Based Payment Compact, adhere to global budgets, and partner with community-based organizations.

  • Providers must assume accountability for patient groups, bear financial risk for spending targets, and agree to performance-based payment adjustments.

  • Purchasers can select and adjust benefit packages but must include all enrollees in the pilot region.

4. Regulatory Framework

  • The OHA will set global budgets, establish processes for rate appeals, and ensure costs are not shifted excessively to enrollees.

  • The program will include risk mitigation strategies such as the Oregon Reinsurance Program, risk corridors, and a risk stabilization fund.

  • Regulatory relief may be provided to encourage innovation but will not compromise patient or provider safety.

5. Monitoring and Evaluation

  • The OHA will monitor the program's implementation, collect and analyze data, and ensure that participation does not reduce access to care.

  • Interim assessments and formal evaluations will be conducted to measure the program’s success and recommend future expansions.

6. Health Equity Fund

  • A fund will be established to support community-based interventions targeting social determinants of health, financed collectively by multiple payers.

7. Pilot Region Advisory Groups

  • Advisory groups will be formed in each pilot region, primarily composed of representatives from communities of color, tribal communities, immigrants, refugees, and underserved areas.

8. Sunset Clause

  • The Act is set to sunset on January 2, 2035, providing a timeframe for the program's evaluation and potential institutionalization.

  • House Bill 4069 seeks to transform healthcare payment models in Oregon, promoting value-based care and equitable health outcomes through a carefully monitored and phased pilot program.

3 Crucial Ways to Improve House Bill 4069

To ensure the success of House Bill 4069 and the Aligning for Health Pilot Program, it is essential to incorporate the Healthy Contracts proposal This can be achieved by adding specific implementation requirements which promote transparency, accountability, and collaborative efforts among all stakeholders. Here is an expanded and detailed plan for integrating these principles:

1.    PROBLEM (describe the problem; attach any additional information)

Oregon’s Healthcare Sustainable Growth Target Program and the Oregon Value-Based Payment Compact requires that fee-for-service contracts be replaced by value-based payment contracts.  Providers must have value-based payment contracts which (1) are created in good faith and fair dealing, (2) do not jeopardize tax-payer dollars or public health, (3) do not require complicity with unethical business practices, and (4) are within a safe harbor from allegations of payer or health plan fraud, antitrust violation, or violations of state or federal laws.

Mental and behavioral providers face 3 serious problems when contracting for value-based care

  1. Contract Confusion: Without standardized definitions, providers and health plans will use terms with multiple or simply undefined meanings, leading to error, misunderstanding, dispute, distrust, and inefficiency. Contracts containing broad or ill-defined terms make it impossible to make good clinical, financial decisions, and achieve success. 

  2. Lack of Whistleblower Protection: Contracted providers must have legal safeguards allowing them to report failing contracts, contract violations, payer fraud or unethical business practices to Healthplans, Value-based reimbursement contracts will fail to the extent providers are unable or afraid to ask questions or to confront health plans appropriately.  

  3. Gaps in Reporting Systems: Health plans lack readily available, trustworthy, useful, and accountable ways for providers to register contract or policy questions, or to report evidence of problems, bad faith, service delivery failures, discrimination, unethical conduct, fraud, etc.

The following examples of contract negotiations illustrate ongoing problems between provider groups and Oregon health plans which were uncovered during 2023-24 contract reviews and negotiations. Below are 8 out of 42 incidents uncovered.  Providers groups are ill-informed and or unaware.

  1. Several hundred Oregon providers’ reimbursement rates were reduced without the providers being properly informed. Their contract was negotiated in bad faith and is potentially voidable. 

  2. The health plan created a risk share for contracted providers and concealed providers’ identities from one another. This is anticompetitive and appears to violate antitrust laws. 

  3. The calculation method for incentive bonuses was hidden from providers. This is bad faith, perilously close to fraud, and violates antitrust. 

  4. One provider group discovered that other providers are unaware that their bonuses were tied to health plan profits rather than calculated based on providers’ performance. This is bad faith and possibly fraud.

  5. Providers were not given the information necessary to understand and analyze the contract risk. This is bad faith. 

  6. There are no definitions, no transparent objectives, no clarification of how the risks which impact objectives are to be managed. This is bad faith and unfair, and perilously close to fraud. 

  7. The health plan stalled contract negotiations with one provider group for 19 months because providers did not have whistleblower protections. This is bad faith, unfair, and perilously close to fraud and violation of antitrust.

  8. The are 35 more incidents…

2.    PROPOSED SOLUTION TO THE PROBLEM

There are 4 requirements that would help ensure that Oregon Sustainable Healthcare Growth Target Program and Oregon Value-Based Payments Contract are successful.

1.      Require Standard Definitions: The State of Oregon should codify standardized definitions in law for the terms used in value-based contracts between payers and mental or behavioral health providers. Standardized definitions will ensure a framework for clear communication, productive negotiations, valid agreements, and contract policies for value-based payment contracts. Definitions should be reviewed annually and amended as necessary to effectively manage the contract policies, values, objectives, controls, key performance indicators, and reimbursement algorithms.

2.      Require Whistleblower Protections: Health plans must provide whistleblower protections for contracted providers, safeguarding their identity, and prohibiting retaliation. Health plans failing to protect whistleblowers will face penalties such as fines and mandatory corrective actions. To be considered a whistleblower, the provider must report issues in good faith, through an Ethics Point Portal or regulatory body reporting channel. Whistleblower protections apply when the report involves questions, problems, unethical practices, violations, fraud, contract breaches, or antitrust activities.  The provider must be acting to prevent harm or expose wrongdoing, rather than for personal gain.  Protections will be at the highest level and shall be contractual whenever statutory and regulatory are more restrictive.

3.      Require Ethics Point Portals: Health plans must provide online access to an Ethics Point Portal, allowing providers to report unethical business practices, contract violations, and illegal behavior such as fraud, with options for anonymous or self-identified reporting. The Healthplan’s portal must be overseen by the Healthplan’s Board of Directors. A health plan’s “audit and compliance committee” must be duly appointed by their Board. The committee will report to the Board of Directors. The Board may outsource, to ensure independence from health plan management, the task of monitoring the portal, investigating reports, analyzing evidence, and delivering timely reports to the Healthplan’s audit and compliance committee, Board of Directors and CEO.

4.      The Legislature will Monitor: The Oregon Health Authority will ensure the Ethics Point portals are responsive, according to the level of concern raised. Health plans that fail to comply will face penalties, mandatory corrective actions, or risk having their contracts suspended.

The purpose of this bill is to support public health, protect employer and taxpayer dollars, and ensure that value-based payment contracts have value, and are successful.

For more information and references see:
https://www.mentorresearch.org/healthy-contract-library

References

Independent Certified Internal Auditors

Ethics Point Portals

Shared Values, Objectives, Controls, Tests of Design and Effectiveness, and Key Performance Indicators.

Transition from Fee-For-Service to Value-Based Payment Contracts

Challenges

DISCLAIMER and PURPOSE: This discussion document is intended for training, education, and research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.

For more information see: https://www.mentorresearch.org/disclaimer-and-purpose

Key words: Supervisor Education, Ethical Charting, CareOregon’s New Barrier to Oregon’s Mental Health Services, Mental Health, Psychotherapy, Counseling, Ethical and Lawful Value Based Care,