Analysis of Moda Health Code of Conduct and Allegations of Violations
Appendix 1
The allegations outlined in the Complaint filed with the Oregon Health Authority (OHA) suggest significant discrepancies between Moda Health's stated Code of Conduct and its actual contracting and negotiation practices. Appendix 1 is a comparison of specific allegations with the corresponding sections of the Code, alongside broader implications for providers, patients, and public trust.
1. Shifting Metrics and Retroactive Penalties
Moda Health is accused of implementing a contract with mid-contract changes to performance metrics and with an open door to retroactive penalties. These adjustments, described as unpredictable and burdensome, undermine providers’ ability to manage obligations and financial outcomes. According to Moda’s Code of Conduct, the organization pledges to “accurately and honestly represent Moda and may not engage in any activity intended to defraud anyone of money, property, or services.” Moda’s contract proposal appears to violate this principle by introducing financial risks that were not disclosed at the outset. Additionally, the lack of transparent metrics conflicts with the Code’s commitment to transparency and fairness. There are no shared values, objectives, controls and key performance performance indicators.
2. Bait-and-Obfuscate Strategy
The complaint highlights a tactic in which Moda initially presents contracts with seemingly acceptable terms which have hidden administrative and performance demands. These undisclosed requirements create significant challenges for providers after the contract has been signed. Moda’s Code emphasizes integrity, stating that all actions should “exhibit a high degree of personal integrity at all times” and “refuse to engage in or tolerate any fraud, misuse, abuse, or waste of resources.” By withholding essential information during contract negotiations, Moda fails to uphold the integrity and honesty required to maintain ethical relationships with providers. The complaint further alleges that Moda's practices systematically obscure financial risks to providers while maximizing Moda’s control over reimbursement and compliance measures.
3. Phantom Networks and Deceptive Representation
Moda is alleged to have listed providers as in-network, even when many of these providers are unlikely to accept new patients. This misrepresentation reportedly misleads public purchasers and skews the competitive healthcare market. Moda’s Code asserts that members have “the right to be treated in a manner that preserves their dignity, autonomy, self-esteem, civil rights, and involvement in their own care.” Deceptive network practices directly contradict this commitment by depriving patients of reliable access to care and undermining trust in Moda’s network. The complaint notes that Moda's actions create an artificial appearance of provider availability, leading to frustration and delays in patient care. There are no “controls” to ensure access is proportional to the contract with purchasers.
4. Contracts of Adhesion and Asymmetric Negotiations
According to the complaint, Moda employs “take-it-or-leave-it” contracts, leaving providers with no meaningful opportunity to negotiate terms. These contracts disproportionately impact smaller practices, which lack the financial and legal resources to challenge unfavorable conditions. The Code encourages resolving “dissent and discord” and promoting fairness, but asymmetric negotiations reflect an imbalance of power that conflicts with these principles. Moda’s actions may also undermine the Code’s directive for all decisions to be “guided solely by the best interests of Moda,” as equitable provider relationships benefit the broader healthcare system. Moda was avoidant, misleading, abusive, and unprofessional during contract discussions, according to the complaint, using coercive tactics to push providers into disadvantageous agreements.
5. Retaliation Risks for Reporting Providers
The complaint alleges that Moda does not provide adequate protections for whistleblowers and that providers risk retaliation, including reduced referrals or contract terminations, for raising concerns. This creates a culture of silence that allows unethical practices to persist unchecked. Moda’s Code explicitly promises that there will be “no retribution for asking questions or raising concerns about the Code or for reporting possible improper conduct.” The fear of retaliation reported by providers contradicts Moda’s stated commitment to fostering a safe and open reporting environment. The complaint suggests that Moda’s lack of clear whistleblower protections enables systemic abuses to continue unchecked, discouraging providers from speaking out against unethical practices.
6. Financial and Operational Burdens
One provider group alleges that Moda imposes undefined metrics, excessive administrative burdens, and opaque incentive structures. This creates significant challenges in assessing contractual risks and fulfilling obligations. The Code emphasizes pursuing “the highest possible standards of performance, quality, service, and achievement” and discourages “guesswork or inappropriate characterizations of people and companies.” The ambiguity and complexity of Moda’s requirements undermine these values, placing undue strain on providers and diminishing their ability to deliver high-quality care. The complaint highlights that Moda’s administrative burdens serve as a form of economic coercion, effectively forcing providers to accept unfavorable terms to remain operational.
Broader Implications of Discrepancies
Impact on Providers
The allegations suggest that Moda’s practices will cause moral injury and burnout among providers. Financial and administrative pressures force provider administrator to prioritize contract compliance over patient-centered care, leading to diminished trust and professional dissatisfaction. Smaller practices, in particular, face heightened vulnerabilities due to limited resources, exacerbating power imbalances, undermining their autonomy, and inability to to provide evidence-based quality care.
Impact on Patients
Patients are directly affected by these practices. Deceptive network representations and provider burnout result in reduced access to care and compromised therapeutic relationships. Additionally, an overemphasis on performance metrics at the expense of individualized care risks undermining patient outcomes, particularly in mental health and other fields where subjective measures play a significant role. Such measures include patient satisfaction.
Impact on Public Trust
The alleged practices raise serious concerns about the misuse of public funds. Moda’s contracting strategies prioritize financial returns over equitable care delivery, undermining the integrity of programs funded with taxpayer dollars. Furthermore, anticompetitive practices, such as phantom networks and coercive contracts, reduce competition among health plans harming the broader healthcare ecosystem.
Recommendations for Action
Regulatory Oversight
The Oregon Health Authority (OHA) should conduct a comprehensive investigation into Moda’s contracting practices to determine compliance with ethical and legal standards. Clear definitions and transparent terms should be mandated in all contracts to prevent deceptive practices.
Strengthening the Code of Conduct
Moda should update its Code of Conduct to include explicit safeguards for whistleblower protections and establish robust guidelines for fair and transparent contracting practices. Regular audits of adherence to the Code should also be implemented to ensure compliance with ethical standards. Health plans must implement an Ethics Point Portal, consistent with the content found at Ethics Point Portal Definition and Benefits, to ensure secure and transparent reporting of ethical concerns.
For more information see:
Ethics Point Portal: Definition and Benefits for Value-Based
Contracts in Mental and Behavioral Health Services.
This discussion paper defines ethics point portals and outlines their benefits in health plan contracting. It explains how these portals provide a secure and confidential way for stakeholders to report unethical practices, compliance concerns, or contract violations. The paper highlights how ethics point portals promote transparency, accountability, and ethical conduct within organizations. Recommendations for implementing effective portals, including ensuring independence and accessibility, are also discussed.
https://www.mentorresearch.org/ethics-point-portal-definition-and-benefits
Legislative Reforms
Legislators should require health plans to define performance metrics and administrative requirements upfront. Laws promoting fair negotiations and protecting providers from retaliation would help balance the power dynamics in healthcare contracting. Health plan must implement and maintain an “ethics point portal” that is overseen by the Board of Directors, not health plan management. .
Provider Support
Smaller practices should have access to legal and financial resources to help them navigate complex contracts and negotiate equitable terms. Collaborative efforts among providers would protect consumers and strengthen their bargaining power.
By aligning its practices with the principles outlined in its Code of Conduct, Moda Health can rebuild trust and promote ethical contracting practices that benefit providers, patients, stakeholder and the healthcare system. These steps are essential to ensure that Moda's commitment to integrity and fairness is reflected not just in its policies but also in its actions.
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