Challenging Moda Health’s Unfair Practices: Why Filing a Complaint Mattered
A Discussion Paper
Concerned about Moda Health’s fraudulent and unfair contracting practices, independent mental health providers considered the merits and risks of filing a formal complaint. The Oregon Health Authority (OHA), the Oregon Department of Consumer and Business Services (DCBS), and the Oregon Attorney General (OAG) are the appropriate agencies to investigate such allegations.
The biggest challenges and obstacles have been creating opportunities for providers’ education, discussion and public and legislative awareness. Given the potential for unfair contracting, fraud, bad-faith contracting, and antitrust violations, it is imperative that providers take action to protect their financial stability, preserve the values of excellent patient care, and restore fair competition in Oregon’s healthcare market.
Moda Health Complaint was submitted to the Oregon Health Authority, Department of Consumer and Business Affairs and the Oregon Attorney General it has also, with the support of Senator Merkley’s staff been sent to the US Inspector General’s attention.
The complaint against Moda Health (linked below) alleges widespread fraudulent, unfair, and anticompetitive contracting practices which exploit healthcare providers and undermine the integrity of Oregon’s healthcare system. The key allegations include:
Bad Faith Contracting
Bait-and-Obfuscate Strategy
Antitrust Violations & Market Manipulation
Contracts of Adhesion & Asymmetric Negotiations
Harm to Providers & Patients
Misuse of Public Funds
Lack of Whistleblower Protections
Moda’s abusive behavior in violation of their own Code of Conduct
Where Should a Complaint Be Filed?
The overarching argument is that Moda Health's contracting practice both harms healthcare providers and destabilizes the Oregon healthcare market, leading to decreased access, increased costs, and lower-quality care. The complaint calls for intervention to address these systemic issues.
Moda Health’s misconduct, alleged in the complaint, ranges from unfair financial risk-shifting to deceptive contract terms, and potentially falls under the jurisdiction of multiple state agencies. The Oregon Health Authority (OHA) plays a key regulatory role, particularly in overseeing healthcare plans that serve public employees and Medicaid recipients. Filing a complaint with OHA was intended to lead to increased scrutiny of Moda’s contracts and possible enforcement actions. OHA was sent the MRI Complaint in October, 2024. They acknowledged receipt.
The Oregon Department of Consumer and Business Services (DCBS) is another viable option. DCBS regulates insurance companies and ensures compliance with fair business practices. Moda Health’s bait-and-obfuscate tactics, in which providers are promised fair contract terms only to face a risk of restrictive and/or financially damaging policy changes, may violate state insurance regulations, warranting DCBS intervention. DCBS informed House Representative Kropf that DCBS is not able to process complaints filed with their department.
When there are fraud and antitrust concerns, the Oregon Attorney General (OAG) ideally should be engaged. The allegations against Moda Health include phantom networks, predatory contracting, and market manipulation, each undermine fair competition and violate public trust. The OAG has the power to prosecute fraudulent business practices and hold Moda Health accountable. The OAG referred the complaint filed with them to DCBS.
Finally, when corporate governance violations are suspected, the Oregon Secretary of State (SOS) may investigate and take steps to dissolve Moda’s business registration if its practices were found to be deceptive or unlawful. Without investigation, it is not possible to determine whether the MRI complaint could be filed as a violation of corporate governance provisions. Instead the complaint was filed with the Oregon Attorney General.
The Risks of Filing a Complaint
Filing a complaint against a major health plan such as Moda Health has risks. Providers who challenge unfair practices may face professional retaliation, such as being excluded from insurance networks, receiving fewer patient referrals, or being subjected to increased administrative scrutiny. Moda Health’s capacity to shift contract terms mid-agreement suggests that providers who raise concerns might experience financial losses, penalties or restrictive amendments to their agreements.
Legal and financial costs are also a concern. While advocacy groups and independent provider alliances might offer support, pursuing legal action or navigating regulatory complaints is time-consuming and expensive. Independent provider groups, which operate on tighter margins than larger healthcare entities, lack the resources to sustain a prolonged complaint process. Even legal action does not protect providers from retaliation.
A primary risk to MRI’s well documented concerns lies in regulatory inertia. When complaints are filed and regulations are under consideration, large corporations have substantial lobbying power. They can work behind the scenes to stall investigations or water-down regulatory responses, which delay or weaken potential reform. While MRI has no direct evidence, it appears that lobbying power may be in operation based on the regulatory focus and omission patterns in Oregon’s current proposed bills related to health care.
What is the Solution Proposed in the Complaint?
The problem and solutions are enumerated in detail in several papers on this website There are five straightforward legislative fixes essential to address the complaint that would address future complaints. Without these concerns being addressed in legislation, Oregon health plans will be able to create, unethical and unlawful contracts without detection. Those contracts may include policies which (1) are fraudulent, (2) interfere with the free market, (3) undermine pro-competitive collaborations, (4) violate antitrust laws, (5) discriminate against underserved populations, (6) foreclose independent group and private practices, (7) violate parity regulations (8) prevent access to care, and (7) harm patients and public health.
The Benefits of Taking Action
Despite the risks, MRI’s complaint presents significant opportunities for change. Following several failed attempts to discuss their faulty contract terms with Moda representatives, MRI’s formal complaint was made with the intent to support Oregon regulations that prevent deceptive contracts and ensure transparency in provider agreements.
For providers, MRI’s well-documented Complaint could serve as a turning point in health plans’ contract negotiations, forcing health plans to adopt more ethical and fair contracting practices. It could also create precedents for future legislation, ensuring that providers are not subjected to unfair financial burdens imposed by health plans.
The greatest impact, however, would be on patient care. When providers are forced to operate under contracts that prioritize corporate profit over clinical outcomes, patients’ access to care suffers. By challenging Moda Health’s unfair practices, providers are both protecting their financial interests and advocating for the integrity and quality of behavioral and mental health services in Oregon.
Additionally, increased public awareness and legislative oversight could pave the way for whistleblower protections, ensuring that providers who speak out against fraudulent contracts and market manipulation are shielded from retaliation.
A Call to Action for Oregon Mental Health Providers
Filing a Complaint against Moda Health was and is about exposing unethical business practices, about demanding accountability and protecting the future of independent mental health services. The Independent Mental Health Practices Alliance (IMHPA) and Mentor Research Institute (MRI) have documented extensive evidence of Moda Health’s misconduct, making a compelling case for regulatory intervention.
Now is the time for mental health providers to unite. Standing together and filing complaints with OHA, DCBS, and the OAG, providers can pressure the State to act against Moda Health’s unfair practices. Legislators need to be made aware that Moda’s contracting model both threatens independent providers and jeopardizes access to essential mental and behavioral health services for thousands of Oregonians.
The risks of inaction are much greater than the risks of speaking out. If left unchallenged, Moda Health’s predatory contracting will set a dangerous precedent, allowing other health plans to adopt similar exploitative practices. Filing a complaint was the first step toward ensuring a fair, transparent, and accountable healthcare system—one that prioritizes patient care over corporate profit.
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Relevant Discussions
Moda Health's Unfair, Bad Faith, Unethical, and Fraudulent Contracting Practices: An Insidious Threat to Oregon's Healthcare System
The discussion paper linked below exposes Moda Health's alleged unethical contracting practices, including manipulating value-based payment models, deceiving providers, misusing public funds, and undermining competition in Oregon's healthcare system. These actions reportedly lead to reduced access to care, provider burnout, and misuse of public funds. The paper calls for regulatory oversight, legal accountability, and systemic reforms to protect healthcare providers, ensure patient access, and safeguard public resources.
https://www.mentorresearch.org/moda-healths-deceptive-contracting-practices-threaten-oregons-healthcare-system
Analysis of Moda Health's Code of Conduct and Allegations of Violations - Appendix 1
The article linked below examines discrepancies between Moda Health's publicly stated Code of Conduct and its actual contracting practices with healthcare providers. Allegations include mid-contract changes to performance metrics, retroactive penalties, and a lack of transparency in financial calculations, which contradict Moda’s commitments to fairness and integrity. These actions have led to provider mistrust and raise concerns about whether Moda Health is adhering to its own ethical standards. The article underscores the need for independent oversight and regulatory intervention to ensure accountability and fairness in Moda’s business practices.
https://www.mentorresearch.org/analysis-of-moda-health-code-of-conduct-and-allegations-of-violations
Empowering Providers to Report Suspicious, Unethical, and Illegal Behaviors
The article linked below highlights the importance of supporting healthcare providers in reporting unethical, illegal, or suspicious practices within value-based contracts and broader healthcare systems. It discusses barriers to reporting, such as fear of retaliation, lack of clear reporting channels, and contractual restrictions imposed by health plans. The article advocates for stronger whistleblower protections, independent oversight, and transparent reporting mechanisms to ensure providers can expose fraud, coercion, and unethical practices without jeopardizing their careers. Strengthening these safeguards is essential for maintaining ethical healthcare delivery and protecting both providers and patients.
https://www.mentorresearch.org/empowering-providers-to-report-suspicious-unethical-and-illegal-behaviors
Comparison and Critique of HB 3725, HB 4130, SB 951, and HB 2029
This article analyzes four Oregon legislative bills addressing healthcare regulation and provider protections. HB 3725 introduces changes to claims processing, utilization reviews, and mental health parity oversight but lacks specific safeguards for independent providers. HB 4130 restricts corporate influence in medical decision-making, preventing non-physician entities from controlling professional medical corporations. SB 951 further limits corporate control by prohibiting management services organizations from dictating medical practice operations and banning restrictive covenants. HB 2029 offers the strongest protections for behavioral health providers by regulating insurer audit practices, ensuring transparency, and preventing arbitrary enforcement. While each bill aims to improve healthcare oversight, HB 2029 and HB 4130 provide the most robust protections for providers, whereas HB 3725 and SB 951 may require additional safeguards to prevent unintended consequences.
https://www.mentorresearch.org/compare-and-critique-hb-3725m-hb-4130m-sb-0951-and-hb-2029
Exposing Loopholes: How Health Plans Can Exploit Regulatory Gaps
The discussion document linked below examines how health plans cab exploit regulatory gaps in Oregon to engage in unethical practices with minimal risk of consequences. Despite efforts by organizations like Mentor Research Institute (MRI) to promote ethical value-based payment contracting, health plans operate without substantial oversight. MRI's attempts to address these issues through state agencies and legislative offices have highlighted the lack of effective legal channels for reporting and investigating health plan misconduct. The document emphasizes the need for substantial investments in oversight mechanisms, including outcome measurement technology, ethics point portals, and independent audits, to ensure ethical value-based payment contracting.
https://www.mentorresearch.org/exposing-loopholes-how-health-plans-can-exploit-regulatory-gaps-1
Core Psychotherapy Values and the Erosion by Health Plan Practices
The discussion paper linked below explores how certain health plan practices can erode core psychotherapy values, such as patient autonomy, confidentiality, and the therapeutic alliance. It examines tactics like limiting session duration, restricting treatment options, and prioritizing cost over clinical need, which can undermine ethical care. The paper advocates for policies that protect the integrity of psychotherapy and offers strategies for resisting practices that conflict with core professional values.
https://www.mentorresearch.org/core-psychotherapy-values-and-the-erosion-by-healthplan-practices
DISCLAIMER and PURPOSE: This discussion document is intended for training, education, legislation, and or research purposes. 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