Ensuring Fairness and Accountability in Mental Health Value-Based Contracts: A Comprehensive Legislative Approach

 Summary

The Mental and Behavioral Health Value-Based Contracting Integrity Act (a Oregon Revised Status - ORS approach) and the ombudsman play crucial roles in promoting transparency, accountability, and fairness in health plan contracting. However, neither can fully replace the other, as they serve different functions and are effective in distinct contexts.

The ORS approach serves as a deterrent by legally obligating health plans to investigate, mitigate, and prevent future occurrences of unethical behavior, in alignment with industry audit standards. Health plans must act swiftly and transparently, ensuring timely resolution of issues. This framework holds health plans immediately accountable, addressing concerns like unfair policy changes or contract violations quickly and preventing further harm. By ensuring compliance with regulatory standards and audit expectations, the ORS approach fosters proactive risk management rather than waiting for disputes to escalate.

In matters requiring urgent investigation—such as changes in case mix severity, the need for risk adjustments, or unfair policy changes—internal audit and compliance departments are typically the more appropriate option. They have immediate access to relevant data, can take swift corrective action, and operate in line with regulatory requirements. This makes them well-suited to quickly address operational issues that require rapid intervention to mitigate material harm or breaches of compliance.

On the other hand, the ombudsman office is more appropriate for systemic and long-term concerns where mediation and conflict resolution are needed, but it is less effective in handling urgent matters. The ombudsman’s reliance on voluntary cooperation from health plans and its slower processes limit its ability to address immediate risks, such as fraud, antirust violation, or violations that cause material harm. While valuable for mediation and oversight, the ombudsman lacks the enforcement power to compel health plans to respond or act swiftly on critical issues.

In conclusion, while the ORS approach provides a timely deterrent and holds health plans accountable through mandatory investigations and corrective actions, the ombudsman is better suited for addressing less urgent, systemic issues through mediation. The ORS framework’s focus on prevention and timely resolution ensures that health plans act quickly and in good faith, whereas the ombudsman’s reactive role is more appropriate for resolving disputes over time, without the ability to intervene in matters of criminal conduct or urgent operational concerns.

Mental and Behavioral Health Value-Based Contract Integrity Act

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.

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 Standardized 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 legislature will mandate that whistleblower protections are included in contracts and ensure that Ethics Point portals are continuously maintained and 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

Oregon Revised Statute (ORS) Proposal

ORS: Requirements for Mental and Behavioral Health Value-Based Payment Contract Integrity Act

Section 1: Standardized Definitions

(1) The State of Oregon shall codify standardized definitions for terms used in value-based payment contracts between health plans and mental or behavioral health providers.
(2) Standardized definitions will provide a consistent framework for clear communication, productive negotiations, valid agreements, and uniform contract policies related to value-based payment models.
(3) Definitions shall be reviewed annually by a designated state agency or oversight committee and amended as necessary to ensure alignment with evolving contract policies, objectives, key performance indicators, and reimbursement algorithms.
(4) Health plans and providers must incorporate these standardized definitions in all value-based contracts to maintain compliance.

Section 2: Whistleblower Protections

(1) Health plans shall provide comprehensive whistleblower protections to contracted providers. Protections must include safeguarding whistleblowers' identity and prohibiting any form of retaliation against providers who report violations in good faith.
(2) Whistleblower protections apply when reports concern unethical practices, contract breaches, fraud, antitrust activities, or other legal violations, as submitted through Ethics Point Portals or regulatory reporting channels.
(3) Providers acting in the interest of preventing harm or exposing wrongdoing, rather than for personal gain, shall be entitled to the highest level of protections.
(4) Health plans that fail to protect whistleblowers will face penalties, including fines and mandatory corrective actions. Contractual whistleblower protections must meet or exceed statutory and regulatory standards whenever applicable.

Section 3: Ethics Point Portals

(1) All health plans must establish and maintain an accessible online Ethics Point Portal for contracted providers to anonymously or self-identified report unethical business practices, contract violations, fraud, or other illegal behavior.
(2) The Ethics Point Portal must be overseen by a committee duly appointed by the Health Plan’s Board of Directors. This committee shall report directly to the Board of Directors, ensuring that all reports are thoroughly investigated and appropriately addressed.
(3) The Board may outsource the monitoring, investigation, and reporting functions to ensure independence from health plan management. External auditors or oversight bodies may be employed to review the portal, investigate reports, analyze evidence, and deliver reports to the health plan’s audit and compliance committee, Board of Directors, and CEO.

Section 4: Legislative Oversight and Enforcement

(1) The Oregon Legislature shall mandate the inclusion of whistleblower protections and the maintenance of Ethics Point Portals in all health plan contracts.
(2) The legislature shall conduct regular oversight to ensure compliance and the responsiveness of the Ethics Point Portals to concerns raised by contracted providers.
(3) Health plans that fail to maintain Ethics Point Portals or adequately protect whistleblowers will face penalties, including mandatory corrective actions or potential suspension of contracts.
(4) The Oregon Health Authority, in collaboration with the legislature, will be responsible for enforcing compliance with these provisions.

Effective Date:

This ORS shall take effect on [insert date] and shall apply to all value-based payment contracts entered into or renewed on or after this date.

 This ORS ensures that Oregon's healthcare payment reform initiatives are governed by clear rules, uphold ethical standards, and provide accountability through whistleblower protections and transparent reporting systems.

What is an ombudsman?

An ombudsman (sometimes spelled ombudsperson or ombud) is an independent, impartial official appointed to investigate and address complaints made by individuals or groups about institutions, particularly in public administration, corporations, or other large organizations. The ombudsman’s role is to ensure accountability, fairness, and transparency by addressing grievances, often acting as a mediator between the complainant and the institution involved.

Key responsibilities of an ombudsman include:

1. Investigating complaints: They review and investigate issues related to maladministration, injustice, or violations of rights.

2. Recommending solutions: After an investigation, the ombudsman may recommend corrective actions, changes in policy, or dispute resolution.

3. Protecting against retaliation: In some contexts, ombudsmen ensure that whistleblowers or complainants are protected from retaliation.

4. Providing oversight: They may serve as a check on institutions to prevent abuses of power or to uphold fair practices.

Ombudsmen are commonly found in government, healthcare, universities, and corporations. They function to give the public or employees a voice when dealing with large or complex organizations. 

Oregon's Ombudsman Offices: Roles, Responsibilities, and Areas of Advocacy

Oregon has several ombudsman offices that serve different populations and address a variety of issues. Here is a list of key ombudsman offices in the state and their specific areas of focus:

1. Oregon Health Authority (OHA) Ombudsman

• Focus: Assists individuals enrolled in the Oregon Health Plan (Medicaid) with complaints and issues related to healthcare services, benefits, and access.

• Type: Healthcare Ombudsman

• Services: Helps resolve disputes between patients and healthcare providers, assists with navigating the Oregon Health Plan, and advocates for individuals facing access or service issues.

2. Oregon Long-Term Care Ombudsman

• Focus: Advocates for residents of long-term care facilities such as nursing homes, assisted living, adult foster care, and residential care facilities.

• Type: Long-Term Care Ombudsman

• Services: Investigates complaints related to the quality of care, residents’ rights, abuse, neglect, and ensures that long-term care residents have a voice in their care decisions.

3. Oregon Workers’ Compensation Ombudsman

• Focus: Provides assistance to injured workers and small businesses in navigating the state's workers' compensation system.

• Type: Workers’ Compensation Ombudsman

• Services: Offers help with understanding workers’ compensation rights and benefits, resolves disputes related to claims, and assists small businesses with compliance.

4. Oregon Public Benefits Ombudsman

• Focus: Helps individuals with issues related to public benefits such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and other state-administered benefits.

• Type: Public Benefits Ombudsman

• Services: Assists with disputes, denials of benefits, and issues related to the administration of public assistance programs.

5. Oregon Foster Care Ombudsman

• Focus: Advocates for children and youth in Oregon’s foster care system.

• Type: Child Welfare/Foster Care Ombudsman

• Services: Addresses concerns related to the welfare of foster children, including safety, rights, and the quality of care provided by foster families or care facilities.

6. Oregon Small Business Ombudsman

• Focus: Helps small businesses resolve disputes and navigate state regulations, especially in relation to environmental and regulatory compliance.

• Type: Small Business Ombudsman

• Services: Assists small businesses in understanding and complying with state laws, mediates disputes between small businesses and government agencies, and helps resolve issues with state regulatory bodies.

7. Oregon Long-Term Care Insurance Ombudsman

• Focus: Provides assistance to individuals facing issues with long-term care insurance policies, including denied claims and policy disputes.

• Type: Insurance Ombudsman

• Services: Helps consumers understand long-term care insurance policies, navigate claims processes, and resolve disputes with insurance companies.

8. Oregon State Employee Ombudsman

• Focus: Serves as an impartial resource for Oregon state employees, helping resolve workplace disputes, concerns about harassment, discrimination, and other work-related issues.

• Type: Employment Ombudsman

• Services: Provides confidential mediation, coaching, and conflict resolution services for state employees.

Each of these ombudsman offices plays a distinct role in advocating for and resolving issues within their respective areas, helping individuals and organizations navigate complex systems, resolve disputes, and address grievances.

Ombudsman and Oregon Revised Statutes (ORS): Compare and contrasting different roles and function in governance, oversight, and dispute resolution

1. Nature and Function

• Ombudsman:

• An ombudsman is an independent, appointed individual or office that investigates complaints, mediates disputes, and advocates for fairness within organizations or government entities.

• Ombudsmen operate as neutral third parties who review cases of misconduct, maladministration, or unfair treatment, offering solutions or recommendations.

• The ombudsman’s role is generally informal, relying on mediation, negotiation, and recommendations rather than legal enforcement.

• ORS (Oregon Revised Statutes):

• The ORS is the codified body of laws passed by the Oregon State Legislature. It provides the legal framework and sets binding rules that govern individuals, institutions, and interactions in the state.

• ORS establishes enforceable laws and regulations, outlining specific rights, duties, penalties, and legal procedures.

• These statutes carry the force of law, with consequences for non-compliance that can include fines, sanctions, or legal action.

2. Enforcement and Power

• Ombudsman:

• Typically does not have legal enforcement powers. Ombudsmen make recommendations, facilitate conflict resolution, and may report findings, but they cannot impose penalties or mandate actions.

• Their influence comes from their ability to independently investigate and make impartial recommendations, often relying on the credibility of their office to push for change.

• ORS:

• Statutes in the ORS have full legal authority and are enforceable by law. Violations of the ORS can be amended to lead to legal penalties, including fines, lawsuits, or criminal charges, depending on the statute.

• The ORS is upheld by courts and regulatory bodies, giving it binding legal power.

3. Scope

• Ombudsman:

• Ombudsmen typically focus on specific areas (e.g., public administration, corporate governance, healthcare, or education) and handle individual complaints or disputes.

• Their scope is often limited to addressing grievances related to administrative practices or institutional policies within their jurisdiction.

• ORS:

• The ORS encompasses all areas of state law, covering a wide range of topics such as civil rights, healthcare, business regulations, criminal law, environmental protections, and more.

• It governs interactions between individuals, businesses, and government, setting broader legal standards for the entire state.

4. Accessibility and Process

• Ombudsman:

• An ombudsman is generally accessible to the public, providing a more informal process for individuals or groups to raise complaints or seek resolutions without needing to go through the court system.

• The process is often quicker and less bureaucratic, with a focus on finding practical solutions rather than legal proceedings.

• ORS:

• The ORS is a formal legal system that requires parties to engage with laws through courts, lawyers, or regulatory agencies when seeking enforcement or redress.

• Legal processes under the ORS can be more complex, time-consuming, and expensive due to the formal nature of litigation and legal compliance.

5. Role in Governance

• Ombudsman:

• The ombudsman serves as a watchdog or intermediary, providing oversight by investigating specific complaints and making recommendations for improving fairness or addressing systemic issues.

• They act as a check on organizations and government agencies to ensure accountability.

• ORS:

• The ORS creates the legal foundation for governance and regulation. It determines the rights, responsibilities, and legal frameworks that guide government actions, business operations, and individual behavior.

• It defines the laws that must be followed by all parties and provides mechanisms for resolving disputes through the legal system.

Contrast in Approach

• Ombudsman:

• Focuses on mediation, problem-solving, and conflict resolution without direct authority to enforce decisions.

• ORS:

• Sets hard legal requirements and is enforced through judicial and regulatory means, often involving penalties for non-compliance.

Conclusion:

In summary, an ombudsman is a facilitator of dispute resolution and a promoter of fairness, offering guidance and recommendations but lacking the formal legal authority to enforce actions. In contrast, the ORS represents the legal statutes that govern the state of Oregon, carrying the force of law and providing the legal framework within which individuals and organizations must operate. Both contribute to accountability and justice, but one does so informally (ombudsman) and the other formally through legislation (ORS).

What are the advantages and disadvantages of an ombudsman and the ORS proposal?

Here’s a comparison of the advantages and disadvantages of an ombudsman approach versus the ORS proposal (as outlined in the Mental and Behavioral Health Value-Based Contracting Integrity Act) in handling issues related to value-based contracting in Oregon’s mental and behavioral health system:

Ombudsman

Advantages

1. Independence: Ombudsmen operate independently from management and other parties, allowing them to investigate complaints objectively without bias or interference from the organizations being scrutinized.

2. Informal Process: The ombudsman’s processes are less formal and bureaucratic, often providing quicker resolutions compared to formal legal proceedings. This approach is more accessible to individuals and organizations.

3. Mediation and Problem-Solving: Ombudsmen focus on mediation and dialogue, which can help prevent conflicts from escalating into legal battles. They encourage both sides to reach a mutually beneficial resolution.

4. Flexibility: Ombudsmen can take action even in situations where legal standards may not clearly define an issue, offering flexibility to resolve complaints without rigid legal boundaries.

Disadvantages

1. Lack of Enforcement Power: While ombudsmen can investigate and make recommendations, they do not have the legal authority to enforce decisions. This can result in recommendations being ignored, especially by powerful organizations.

2. Limited Scope: Ombudsmen usually focus on specific complaints or cases, which may not address systemic issues or broader regulatory problems.

3. Dependence on Cooperation: The success of an ombudsman often depends on the willingness of organizations to cooperate. Without enforcement power, there is no guarantee that issues will be resolved satisfactorily.

4. Reactive: Ombudsman services are typically reactive, responding to complaints after problems arise rather than proactively creating safeguards like legislation does.

ORS Proposal (Mental and Behavioral Health Value-Based Contracting Integrity Act)​

Advantages

1. Legal Enforcement: The ORS proposal includes clear penalties for non-compliance, such as fines and contract suspension, giving it the power to ensure that health plans follow the law. This legal authority forces accountability in ways that an ombudsman cannot.

2. Proactive Framework: By setting standardized definitions, mandatory whistleblower protections, and external reporting systems, the ORS proposal builds a proactive regulatory framework. It seeks to prevent issues before they arise, rather than simply reacting to complaints.

3. Clear Guidelines: The ORS proposal defines specific requirements for value-based contracts, whistleblower protections, and Ethics Point Portals. This provides a clear set of expectations for health plans and providers, which reduces ambiguity.

4. Annual Review and Updates: The proposal includes annual reviews of standardized definitions and policies, ensuring that the legal framework evolves with changes in healthcare practices.

5. Comprehensive Scope: The proposal covers systemic issues, including contract fairness, reporting systems, and external oversight, which are broader and more structural than the typical scope of an ombudsman.

Disadvantages

1. Complexity and Bureaucracy: Legal processes under the ORS proposal can be more complex and slow, with potentially longer timelines to resolve disputes compared to an ombudsman. The formal legal framework may also require more resources, such as lawyers and compliance teams.

2. Cost and Resource Intensive: Implementing and enforcing the ORS proposal would require significant resources from both the Oregon Health Authority (OHA) and health plans. This could increase administrative costs for both the government and organizations involved.

3. Rigidity: The legal framework may be less flexible than an ombudsman’s approach, making it harder to resolve unique cases that fall outside established laws and definitions.

4. Focus on Compliance Over Resolution: The ORS proposal emphasizes regulatory compliance, which may sometimes overshadow the goal of achieving resolution or mediation in specific conflicts. It could potentially lead to adversarial legal disputes rather than cooperative problem-solving.

Comparison Summary

• Ombudsman: Offers flexibility, informal dispute resolution, and can respond to specific issues quickly, but lacks enforcement power and operates reactively. It is better for handling individual complaints or facilitating resolution through mediation.

• ORS Proposal: Provides a comprehensive, legally enforceable framework with strong protections for whistleblowers and clear, standardized rules for contracting. However, it involves more bureaucratic complexity and cost and may be slower in addressing individual grievances.

In essence, while an ombudsman is ideal for mediating individual cases and resolving disputes informally, the ORS proposal establishes a more robust and enforceable system for addressing systemic issues and ensuring long-term accountability and fairness in contracts. Both approaches have distinct advantages depending on whether the focus is on individual resolution (ombudsman) or systemic reform (ORS).

Can an ombudsman defend one party in a dispute from another, or take sides?

Ombudsmen, by definition, are typically neutral third parties tasked with facilitating dispute resolution and investigating complaints impartially. Their role is often defined by statutes or regulations that emphasize neutrality, confidentiality, and mediation rather than advocating for or defending one party against another. However, the legal framework governing ombudsman offices can vary by jurisdiction, and case law may address specific limitations on their roles.

While there isn't a broad, universal rule across all jurisdictions that prevents ombudsmen from defending one party against another, several principles and cases have shaped the limits of an ombudsman’s function. Here are key points and considerations regarding ombudsman neutrality and any potential case law restricting their ability to act as advocates:

1. Neutrality and Impartiality by Design

Ombudsman programs are generally designed to remain neutral to maintain trust from all parties involved in a dispute. Many legal frameworks explicitly require ombudsmen to be impartial, and their primary function is to mediate rather than advocate for one side.

• Example: The Ombudsman Act in some jurisdictions emphasizes that the ombudsman must act independently and impartially, with no power to make binding decisions but the ability to make recommendations.

2. Case Law Limiting Advocacy

While direct case law preventing ombudsmen from defending one party against another might be limited, case law and statutes generally emphasize impartiality. There have been cases where courts reinforce the ombudsman's role as a neutral entity rather than an advocate for one side.

• Canada (Minister of Agriculture) v. Ombudsman (Ontario): In this case, the court affirmed the role of the ombudsman as a neutral party responsible for investigating administrative actions. The court indicated that while the ombudsman can investigate complaints and recommend solutions, they are not permitted to take sides in disputes or defend complainants as if they were advocates.

3. Statutory Boundaries on Ombudsman Authority

In many jurisdictions, ombudsmen are established through statutory frameworks that explicitly define their powers and roles. These statutes typically prevent ombudsmen from advocating for one party over another. For example, ombudsman laws in various states (including Oregon) specify that ombudsmen serve as neutral intermediaries and cannot represent either party in a dispute.

• Oregon Ombudsman Statutes: In Oregon, ombudsman programs such as the Oregon Long-Term Care Ombudsman or the OHA Ombudsman Services are governed by state laws that emphasize their neutral role. The statutes establish that the ombudsman may investigate complaints and make recommendations, but they are not to act as legal representatives or advocates in the traditional sense.

4. Ombudsman Codes of Conduct

Ombudsman offices often follow codes of conduct that clearly outline their duty to remain neutral. These codes typically prevent them from acting in a way that would align them too closely with one party or from providing legal defense services.

• The International Ombudsman Association (IOA), for example, has a code of ethics that emphasizes confidentiality, neutrality, and impartiality. Any deviation from these principles, such as acting as an advocate, would violate the ombudsman’s purpose and could lead to legal challenges.

5. Conflict with Advocacy Roles

An ombudsman who defends one party could face legal challenges or ethical concerns because it would be inconsistent with their established role as a mediator. Case law on conflicts of interest may apply here, suggesting that any ombudsman who acts as an advocate could be seen as breaching their statutory or ethical obligations to neutrality.

• Chittenden v. Waterbury: This case dealt with the limits of an ombudsman’s role when there is a perception of bias or partiality. Courts have sometimes ruled against ombudsmen when there is evidence they may not have acted impartially, thus reinforcing the principle that they must remain neutral and cannot favor one party over another.

6. Practical Challenges in Advocacy

Even if there isn’t explicit case law universally preventing an ombudsman from defending one party, there are practical limitations that often prevent them from doing so. Ombudsmen typically lack the authority to enforce legal remedies or act in the capacity of an attorney. Their recommendations are often non-binding, and taking on the role of an advocate would compromise their position as trusted, neutral intermediaries.

Conclusion:

While there may not be a single, definitive case universally preventing an ombudsman from defending one party against another, the principles of neutrality and impartiality embedded in most statutes, case law, and codes of conduct effectively prevent ombudsmen from assuming an advocacy role. Their function as mediators, investigators, and neutral facilitators is fundamentally at odds with acting as a defender of any one party in a dispute.

If a party requires direct advocacy or defense, they typically need to seek legal representation or work within formal legal channels rather than relying on the ombudsman.

Safeguarding Impartiality: How the International Ombudsman Association Shapes the Profession

The International Ombudsman Association (IOA) is a professional organization dedicated to supporting the role of ombudsmen around the world. It provides leadership, education, and advocacy for the ombudsman profession, ensuring that ombudsmen adhere to high professional standards while maintaining impartiality and working effectively to mediate disputes and resolve conflicts. The IOA plays a crucial role in guiding ombudsmen in diverse sectors, such as academia, corporate environments, healthcare, government, and non-profits, ensuring that they are equipped with the tools and knowledge necessary to serve as neutral, independent, and confidential conflict resolution practitioners (IOA).

The IOA’s mission is to promote best practices and advance the field of conflict resolution while upholding the integrity of the ombudsman profession. The organization emphasizes that ombudsmen should serve as independent intermediaries, facilitating the fair resolution of disputes without advocating for any particular party. The IOA ensures that ombudsmen can act autonomously and effectively within organizations, guiding them through the complex process of mediation and dispute resolution. This is critical to fostering trust in the ombudsman role, which must remain free from external pressures or influence (IOA).

Central to the IOA’s work is its Code of Ethics and Standards of Practice, which set the professional standards for ombudsmen globally. The guiding principles emphasize independence, neutrality, confidentiality, and informality. According to the IOA, ombudsmen must operate independently from the organizations they serve, ensuring that they can act without bias or interference. They must remain neutral, not advocating for any party, and must uphold confidentiality in all interactions, except where there is a risk of serious harm. Finally, ombudsmen operate informally, seeking to resolve disputes through dialogue and mediation rather than through formal legal processes (IOA).

The IOA offers a range of educational and training programs designed to help ombudsmen develop the necessary skills to handle conflict resolution. These programs include workshops, certification opportunities, and webinars that allow practitioners to stay up to date on emerging trends and best practices in the field. The association also hosts an annual conference, where ombudsmen can collaborate and learn from one another. Such initiatives are critical in ensuring that ombudsmen maintain high standards of practice and are prepared to manage the complexities of organizational dynamics (IOA).

Another significant aspect of the IOA’s mission is its role in advocating for the profession. The association works to raise awareness of the importance of ombudsmen within organizations and advocates for the establishment of ombudsman offices across various sectors. The IOA plays a pivotal role in promoting the value of the ombudsman as part of an organization’s governance and conflict resolution strategy. It collaborates with government bodies, educational institutions, and corporations to support the integration of ombudsman services into their structures (IOA).

Membership in the IOA spans across various sectors, including higher education, corporate, government, healthcare, and non-profits. In academia, ombudsmen help mediate disputes among faculty, staff, and students. In the corporate world, they address workplace conflicts, compliance issues, and ethical concerns. Public sector ombudsmen assist with resolving disputes between government agencies and citizens, while healthcare ombudsmen help address concerns related to patient care and staff relations. Non-profits also benefit from the services of ombudsmen to resolve both internal and external conflicts (IOA).

The IOA offers a Certified Organizational Ombudsman Practitioner (CO-OP®) designation, providing formal recognition to ombudsmen who meet specific professional standards in education and experience. This certification demonstrates an ombudsman’s commitment to ethical practices and adherence to the IOA’s standards of neutrality, confidentiality, and independence. Certification ensures that ombudsmen are recognized as qualified professionals in their field, further advancing the credibility and reliability of the profession (IOA).

The IOA’s global reach extends beyond the United States, with members and offices in multiple countries. This international presence underscores the IOA’s commitment to establishing consistent professional standards for ombudsmen worldwide. Through its leadership and advocacy, the IOA helps ombudsmen across diverse regions navigate cultural and organizational differences while adhering to the same ethical and professional standards (IOA).

In summary, the International Ombudsman Association (IOA) is a key player in shaping the ombudsman profession by promoting ethical standards, providing professional development, and advocating for the integration of ombudsman services into organizations globally. Its Code of Ethics and Standards of Practice emphasize the critical principles of independence, neutrality, confidentiality, and informality, which are essential for ombudsmen to fulfill their role effectively. Through its education programs, certification processes, and global outreach, the IOA ensures that ombudsmen remain trusted and effective mediators within their organizations (IOA).

For more information, refer to the International Ombudsman Association’s official publications and website resources.

Does reporting to the state ombudsman have whistleblower protections

Reporting to a state ombudsman typically offers whistleblower protections, although the specific protections depend on the state and the type of ombudsman office involved.

Whistleblower Protections through Ombudsman Reporting:

1. Confidentiality: Most state ombudsmen maintain strict confidentiality regarding the identity of individuals who report issues. This protection helps whistleblowers come forward without fear of retaliation from their employers or other entities involved.

2. No Retaliation: Ombudsmen often advocate for whistleblowers' right to report misconduct without facing adverse consequences. Many states have legal provisions that prevent retaliation (e.g., termination, demotion, or harassment) against individuals who report wrongdoing in good faith.

3. Anonymous Reporting: Some state ombudsman programs allow whistleblowers to make anonymous reports, adding another layer of protection. This ensures that the whistleblower’s identity is not revealed unless they choose to do so.

4. Legal Protections: Depending on the state, additional statutory protections may exist for whistleblowers who report to the ombudsman. For example, certain state and federal laws explicitly prohibit retaliation against whistleblowers who expose fraud, corruption, or legal violations, often extending these protections when the report is made to an ombudsman.

However, it is important to note that while ombudsmen provide significant confidentiality and protection, the legal enforcement of whistleblower protections might still require recourse to formal legal channels (e.g., filing a complaint with a regulatory body or a lawsuit) if retaliation occurs. Ombudsmen typically do not have the power to enforce legal remedies but can refer cases to appropriate authorities for further action.

For specific details about the Oregon state ombudsman and its whistleblower protections, you may want to consult relevant state laws or the policies of the particular ombudsman office involved.

Describe the Proposed Mental and Behavioral Health Value-Based Payment Contract Integrity Act

The proposed Mental and Behavioral Health Value-Based Contracting Integrity Act aims to ensure transparency, fairness, and accountability in contracts between mental and behavioral health providers and health plans in Oregon. This bill introduces key reforms, such as standardized definitions, whistleblower protections, external reporting systems, and plain language requirements, to improve the integrity of value-based payment contracts.

Section 1: Standardized Definitions

The Oregon Health Authority (OHA) will establish and publish a common set of definitions for value-based contracting with mental and behavioral health providers. These standardized definitions will include essential terms such as "value-based payment models," "whistleblower protections," "fraud," "contract violations," and "bad faith actions." Other necessary terms will also be defined to facilitate clear communication among providers, health plans, and regulatory bodies. These definitions will apply to fee-for-service, alternative payment, value-based payment, and population-based payment contracts and policies. To keep pace with changes in healthcare, the OHA will review and update these definitions annually, ensuring that all contracts use the most current language.

Section 2: Plain Language and Uniform Definitions

Contracts and policies between health plans and mental or behavioral health providers must be written in plain, understandable language, incorporating the standardized definitions established by the OHA. Health plans will have six months to amend all pre-existing contracts to comply with these requirements. Proposed contracts must be submitted to providers for review at least six months before signing, allowing providers to offer feedback through the health plans' ethics point portal. This process will ensure that providers fully understand the terms of their contracts and can provide input before finalizing agreements.

Section 3: Mandatory Whistleblower Protections

To protect the integrity of value-based contracting, health plans are required to extend whistleblower protections to all contracted mental and behavioral health providers. These protections ensure that providers can report unethical behavior, fraud, or contract violations without fear of retaliation. Safeguarding the identity of whistleblowers and prohibiting retaliatory actions are central to this section, and reports must be addressed promptly and fairly. Health plans found to retaliate against whistleblowers or failing to implement these protections will face penalties such as fines, contract suspension, or other measures determined by the OHA.

Section 4: External Provider Reporting System

Health plans must establish secure, accessible online Ethics Point Portals where contracted providers can submit reports of fraud, contract violations, illegal behavior, or unethical practices. Reports can be submitted anonymously or with identification. Health plans must ensure the portal is available 24/7 and accessible across multiple devices. To guarantee independence, health plans may either have their internal auditors report directly to the Board of Directors or CEO or outsource the reporting system to an independent third-party organization. An independent oversight body, appointed by the health plan’s Board and approved by the OHA, will monitor the portal to ensure fair and independent handling of reports. Regular audits will confirm the portal’s transparency and timely responsiveness. Providers must be able to track their submissions, and health plans will submit quarterly reports to the OHA, detailing the submissions received and the actions taken. Non-compliant health plans will face penalties, including fines and contract suspension.

Section 5: Implementation and Enforcement

The Oregon Health Authority is responsible for implementing and enforcing the provisions of this Act. The OHA may issue rules and regulations as needed to carry out the goals of the Act and ensure compliance from all involved parties.

In conclusion, the Mental and Behavioral Health Value-Based Contracting Integrity Act seeks to create a more transparent and accountable contracting environment between health plans and providers, fostering fairness through clear definitions, whistleblower protections, and robust external reporting systems.

How would an ombudsman attempt to manage the issues that would fall under the Mental and Behavioral Health Value-Based Contracting Integrity Act?

If an ombudsman office were tasked with managing the goals of the Mental and Behavioral Health Value-Based Contracting Integrity Act, it would operate differently from the legal and regulatory approach outlined in the Act. Here’s how the ombudsman office might handle various aspects of the Act:

1. Establishing and Managing Standardized Definitions

The ombudsman office would play a role in facilitating discussions among stakeholders—health plans, providers, and regulatory bodies—to create and update standardized definitions. Rather than setting legally binding definitions, the ombudsman would likely function as a mediator to ensure that all parties agree on common terminology. The office would collect input from providers and health plans to promote clear communication and mutual understanding in contract language.

• Management Approach: Instead of unilaterally establishing definitions, the ombudsman could organize working groups or task forces to review and refine the terms periodically, fostering collaboration and consensus-building among parties.

2. Ensuring Plain Language in Contracts

An ombudsman office would not enforce plain language requirements as a statutory obligation but would encourage compliance by reviewing contracts upon request and providing feedback. The ombudsman could offer guidelines and best practices for health plans and providers to draft clearer, more understandable contracts.

• Management Approach: The ombudsman might provide contract review services or templates to help health plans and providers simplify language and reduce complexity. Feedback would be offered on a case-by-case basis rather than as part of an overarching legal requirement.

3. Handling Whistleblower Protections

The ombudsman office would be the central entity for receiving whistleblower reports. Whistleblowers could report contract violations, unethical behavior, or fraud directly to the ombudsman, who would investigate complaints confidentially. The office would protect whistleblowers’ identities and ensure they are not subjected to retaliation, acting as an intermediary between the whistleblower and the health plan.

• Management Approach: The ombudsman could establish whistleblower reporting channels, offering anonymity and protection. If a whistleblower faced retaliation, the ombudsman would work to resolve the issue through mediation rather than through legal penalties. If necessary, the ombudsman could refer severe cases of retaliation or fraud to state authorities for further action.

4. Managing External Reporting Systems (Ethics Point Portals)

Instead of mandating that health plans create and manage their own Ethics Point Portals, the ombudsman could centralize the reporting process by managing an independent, external portal for all providers. Providers could use the ombudsman’s platform to report contract violations, fraud, or unethical practices. The ombudsman’s office would then investigate or facilitate an investigation, ensuring reports are handled transparently and impartially.

• Management Approach: The ombudsman would monitor submissions, conduct investigations, and provide timely updates to whistleblowers. The office could also maintain oversight of any internal health plan reporting systems to ensure they function independently and meet established standards.

5. Facilitating Compliance and Mediation

Instead of enforcing compliance through fines or contract suspensions (as the OHA would under the Act), the ombudsman would focus on facilitating resolution through dialogue and negotiation. If a health plan or provider failed to comply with agreed-upon standards (e.g., not providing whistleblower protections or maintaining clear contracts), the ombudsman would attempt to mediate the situation and reach a compromise.

• Management Approach: In cases where mediation fails or where severe misconduct occurs, the ombudsman could refer cases to regulatory bodies such as the Oregon Health Authority (OHA) for enforcement. However, the ombudsman’s primary role would be to resolve disputes amicably before escalating to legal or regulatory authorities.

6. Transparency and Accountability

The ombudsman office would provide regular public reports on the number of complaints received, types of issues raised, and outcomes of investigations. This reporting would ensure transparency and maintain accountability without the need for formal penalties. The goal would be to foster trust between health plans, providers, and the public by demonstrating that issues are being addressed fairly.

• Management Approach: The ombudsman would issue annual reports on trends, systemic issues, and recommendations for improvement in value-based contracting. This would help identify patterns of misconduct or inefficiencies and promote changes in practice over time.

Summary of the Ombudsman’s Role:

• Standardized Definitions: Facilitates agreement among stakeholders on common terms.

• Plain Language Contracts: Offers review and guidance to ensure clarity.

• Whistleblower Protections: Provides a confidential channel for reporting, mediates retaliation cases.

• External Reporting System: Centralizes the Ethics Point Portal for providers to report issues.

• Compliance and Mediation: Focuses on resolving disputes through negotiation rather than penalties.

• Transparency: Issues public reports to foster trust and accountability.

Strengths of Ombudsman Management:

• Flexibility: The ombudsman can adapt solutions to specific cases and offer more personalized resolutions.

• Conflict Resolution: Focuses on preventing conflicts from escalating into formal legal disputes.

• Accessibility: Providers may feel more comfortable using an ombudsman’s informal process than going through a formal regulatory system.

Weaknesses of Ombudsman Management:

• Limited Enforcement Power: The ombudsman cannot impose penalties or legally enforce compliance, which may reduce the effectiveness of solutions in some cases.

• Reactive Approach: The ombudsman office would primarily react to complaints, rather than proactively shaping industry-wide practices.

• Reliance on Cooperation: Success would depend on the willingness of health plans and providers to cooperate with the ombudsman’s recommendations.

In contrast to the Mental and Behavioral Health Value-Based Contracting Integrity Act, which establishes legal mandates and enforceable penalties, an ombudsman office would provide a more mediated, collaborative approach that emphasizes problem-solving, confidentiality, and flexibility over legal enforcement.

The Dangers of Using an Ombudsman for Fraud and Antitrust Violations: Undermining Accountability and the Legal Process

Using an ombudsman to investigate fraud and antitrust violations is highly ill-advised and could significantly undermine subsequent investigations, litigation, or prosecution. The primary role of an ombudsman is to act as a neutral third party who facilitates informal conflict resolution and addresses complaints within organizations. However, fraud and antitrust violations are serious legal matters that require specialized knowledge, forensic investigation, and formal legal processes. Allowing an ombudsman to intervene in such matters risks not only compromising accountability but also jeopardizing the entire legal process.

1. Lack of Legal Expertise and Authority

An ombudsman, by design, lacks the formal legal training and authority required to investigate criminal conduct such as fraud or antitrust violations. Fraud investigations often involve the examination of financial records, contracts, and communications to uncover deceptive practices, while antitrust violations require an understanding of complex market dynamics and competition law. These tasks are typically conducted by experts in regulatory agencies like the Department of Justice (DOJ) or the Federal Trade Commission (FTC), along with law enforcement. An ombudsman is neither equipped nor empowered to carry out these legal duties, and using one in such investigations can lead to inadequate or improper handling of critical evidence.

2. Risk of Undermining Formal Investigations

By allowing an ombudsman to take the lead in addressing fraud or antitrust violations, there is a significant risk that key evidence may be mishandled, overlooked, or improperly documented. Unlike regulatory authorities, ombudsmen lack the procedural rigor and investigative powers to subpoena documents, compel testimony, or conduct thorough forensic audits. This lack of formal investigative capability can compromise the integrity of evidence, making it difficult for law enforcement or regulatory agencies to pursue further action. The informal nature of ombudsman investigations can also lead to information being collected outside the strict rules of evidence, rendering it unusable in court or formal proceedings.

3. Weakening Accountability

Fraud and antitrust violations demand high levels of accountability, not just to the victims but also to the broader public, as these acts often result in significant financial and societal harm. Allowing an ombudsman to mediate or investigate these matters dilutes the necessary accountability mechanisms that come with formal legal processes. Ombudsmen generally lack the enforcement power to impose penalties, file charges, or bring cases to court. As a result, wrongdoers may evade the full consequences of their actions if an ombudsman is the only body investigating the issue, leading to a perception of injustice and undermining trust in regulatory systems.

In serious cases such as these, accountability is ensured by a clear chain of legal responsibility, where wrongdoers are held to account through transparent investigations, prosecutions, and legal judgments. In contrast, ombudsman processes are informal and often confidential, which can lead to deals or resolutions that lack the necessary transparency to uphold public trust. Worse, ombudsmen typically rely on voluntary cooperation, which means that powerful entities like health plans involved in fraud or antitrust violations can simply refuse to participate or limit the scope of the investigation.

4. Potential to Undermine Litigation or Prosecution

The involvement of an ombudsman in cases of fraud or antitrust violations may also jeopardize any potential litigation or prosecution. Formal legal investigations operate under stringent procedural rules, ensuring that evidence is gathered, preserved, and presented in a manner that complies with the law. If an ombudsman, who lacks the authority to secure evidence or enforce subpoenas, handles the case, critical details may be lost or compromised. This could weaken any subsequent prosecution or civil litigation efforts, as key evidence may not meet the standards required in court, allowing wrongdoers to evade justice.

Additionally, allowing an ombudsman to mediate solutions in cases involving serious legal violations could lead to inappropriate settlements or agreements that do not reflect the gravity of the offenses. Such informal resolutions could hinder future litigation by creating confusion over the legal status of the case or diminishing the seriousness of the charges, ultimately weakening the ability of regulatory authorities or law enforcement to pursue justice.

5. Blurring the Lines Between Mediation and Legal Enforcement

Ombudsmen are fundamentally mediators, not enforcers of the law. Their role is to foster communication, mediate disputes, and propose solutions that satisfy both parties. In cases of fraud or antitrust violations, however, what is required is not mediation but legal enforcement. Fraud and antitrust laws are designed to protect the integrity of markets, competition, and consumer rights, and violations of these laws warrant public accountability through formal prosecution and penalties. By allowing an ombudsman to handle these matters, the distinction between informal dispute resolution and legal enforcement becomes dangerously blurred. This can dilute the severity of the violations and lead to inadequate responses that fail to deter future misconduct.

Conclusion: Undermining the Legal Process and Accountability

Using an ombudsman to address fraud and antitrust violations is not only inappropriate but dangerous to the pursuit of justice. It undermines accountability by allowing informal mediation to replace the formal legal processes that are necessary for holding individuals and organizations accountable for serious violations. Fraud and antitrust violations require rigorous investigation, the enforcement of legal standards, and public accountability, none of which an ombudsman is equipped to provide. Allowing an ombudsman to intervene in these matters risks compromising evidence, weakening future litigation or prosecution, and ultimately failing to ensure that wrongdoers are held responsible for their actions.

Given the issues raised about mental and behavioral health plan contracting, Why would a health plan refuse to cooperate fully with an ombudsman?

Health plans may refuse to fully cooperate with an ombudsman for several reasons, especially given the context of the issues raised in prior discussions, which highlight concerns about transparency, accountability, and contracting practices. Here are some key reasons why a health plan might hesitate to cooperate fully:

1. Protecting Financial Interests

Health plans have strong financial incentives to maximize profits and minimize costs, and fully cooperating with an ombudsman could potentially expose practices that negatively affect their bottom line. For example:

• Disclosure of Unfair Practices: If the ombudsman investigates issues like bad faith contracting or price fixing, the health plan may fear that cooperation would expose unethical or illegal practices, leading to fines, penalties, or contract renegotiations that could reduce profits.

• Risk of Corrective Actions: Full cooperation may require health plans to adopt corrective actions that could involve higher reimbursement rates for providers or changes to network policies, which could increase operating costs.

2. Fear of Legal and Regulatory Exposure

Cooperating fully with an ombudsman could lead to the discovery of regulatory violations or even fraud, as previously discussed in relation to contract violations and whistleblower protections. Health plans might resist cooperation to:

• Avoid Legal Liability: Exposing violations related to contracting practices could lead to lawsuits, enforcement actions from regulatory bodies like the Oregon Health Authority (OHA), or investigations under antitrust laws.

• Prevent Antitrust Scrutiny: Concerns about monopolistic behavior, such as price bracketing or bait-and-switch contracting, may arise if an ombudsman uncovers antitrust violations. Full cooperation could accelerate regulatory scrutiny, which health plans would want to avoid.

3. Loss of Control Over Internal Operations

Health plans may resist cooperating fully with an ombudsman because it involves external oversight that limits their control over internal processes:

• Resisting Independent Auditing: The ombudsman’s role in facilitating independent audits and monitoring Ethics Point Portals (as discussed in the proposed solutions) can interfere with a health plan’s ability to manage its own reporting systems. Health plans might prefer to handle issues internally, particularly if there are conflicts of interest within management.

• Fear of Transparency: Cooperating with the ombudsman could require the disclosure of internal decision-making processes and business strategies, which some health plans may view as a threat to their competitive advantage.

4. Reluctance to Change Established Practices

Many health plans have established practices in contracting, reimbursement, and provider network management that may not align with the transparent, fair, and standardized approaches the ombudsman promotes:

• Resistance to Standardized Definitions: Implementing the standardized definitions discussed in the Mental and Behavioral Health Value-Based Contracting Integrity Act could force health plans to rewrite contracts, negotiate new terms with providers, and adopt practices that challenge the status quo.

• Pushback Against Plain Language: Ensuring contracts are written in plain language could expose unclear or deceptive clauses that allow health plans to interpret contracts in their favor, reducing flexibility in managing provider relationships.

5. Fear of Whistleblower Reports

Health plans may be wary of cooperating with an ombudsman due to concerns about whistleblower reports:

• Exposure of Internal Misconduct: Whistleblower protections facilitated by the ombudsman might lead to the disclosure of unethical or illegal practices, including fraud, contract violations, or violations of value-based payment models. If whistleblower complaints are brought to light, health plans could face reputational damage and legal consequences.

• Potential for Retaliation Claims: Full cooperation with an ombudsman could increase the number of whistleblower reports, leading to more investigations into retaliation claims, which could further tarnish the health plan’s reputation and lead to penalties.

6. Conflict with Profit-Driven Value-Based Models

Some health plans may resist ombudsman oversight because their value-based payment models are structured in ways that prioritize cost savings over provider or patient interests. Cooperating with an ombudsman might expose inherent conflicts of interest in these models:

• Inflexibility in Payment Models: If the ombudsman investigates the fairness of value-based payment contracts, they might find that these models are designed more to benefit the health plan financially (e.g., by limiting reimbursement or excluding providers) rather than improving patient outcomes.

• Provider Pushback: Providers may raise complaints to the ombudsman about the inadequacy of payment structures, which could lead to pressure on health plans to renegotiate terms, impacting profitability.

7. Protection of Proprietary Information

Health plans might be concerned that full cooperation with an ombudsman could lead to the disclosure of proprietary business information:

• Competitor Exposure: In a competitive market, health plans may fear that information shared with the ombudsman could be inadvertently exposed to competitors or regulators, jeopardizing their strategic advantage.

• Confidential Contracting Practices: Health plans may have developed unique contracting methods with providers that they consider proprietary, and disclosing these methods could weaken their market position.

8. Skepticism of Ombudsman Effectiveness

Some health plans may doubt the ombudsman’s effectiveness or neutrality, particularly if they believe that the ombudsman’s office:

• Lacks Enforcement Power: If health plans see the ombudsman as lacking the power to enforce decisions or impose meaningful penalties, they may question the value of cooperating fully.

• Perceived Bias: Health plans might suspect that the ombudsman could be biased toward providers or patients, leading to decisions that disproportionately favor these groups over the health plan’s interests.

Conclusion

Health plans might refuse full cooperation with an ombudsman due to a combination of financial, legal, and strategic concerns. The fear of exposing unfair practices, facing regulatory or legal action, and losing control over internal operations creates a strong incentive for health plans to limit their engagement with an external oversight body. Additionally, health plans may resist transparency and accountability measures that challenge their existing contracting practices and threaten profitability. Finally, skepticism about the ombudsman’s neutrality and effectiveness could further reduce their willingness to cooperate fully.

Can an ombudsman force a commercial health plan to participate in mediation?

An ombudsman typically does not have the legal authority to force a commercial health plan to participate in mediation. Ombudsman offices generally rely on voluntary cooperation from the parties involved, and while they can recommend mediation or provide a forum for resolving disputes, they cannot legally compel a health plan to engage in the process. In some cases, mediation may be written into contracts or required by regulation, but absent a legal mandate, commercial health plans can choose whether or not to participate in mediation facilitated by an ombudsman.

Ombudsman and Mediation

• Voluntary Participation: Ombudsmen serve as intermediaries to facilitate dispute resolution, but participation in mediation is generally voluntary unless mandated by a contract, court, or specific law.

• No Enforcement Power: Without legal authority, an ombudsman cannot force commercial entities, like health plans, to comply with mediation requests. They typically rely on their ability to influence, negotiate, and foster cooperation.

Contrast Between Commercial and Public Health Plans

1. Commercial Health Plans (e.g., Moda Health)

Moda Health, as a commercial health plan, operates in the private sector and is primarily focused on profit and market competition. Here’s how commercial health plans differ from public health plans, especially in the context of mediation and interaction with ombudsmen:

• Profit-Driven Motives: Commercial health plans like Moda are driven by profitability and shareholder value, which can make them more resistant to transparency or oversight. They may be more hesitant to engage in mediation if they believe it could expose them to legal liabilities, reduce profitability, or force changes to their business model.

• Contractual Flexibility: Commercial plans typically have more autonomy in structuring their contracts with providers, often employing proprietary negotiation tactics that favor cost-containment strategies, such as narrow networks or lower reimbursement rates. This flexibility may lead to a reluctance to engage in mediation or work with an ombudsman if it risks unfavorable contract renegotiations.

• Resistance to External Oversight: A commercial health plan may resist the involvement of an ombudsman or mediation, especially if they feel it might weaken their ability to control contracting practices. Without legal obligation, they can simply choose not to engage.

2. Public Health Plans (e.g., Coordinated Care Organizations - CCOs)

Public health plans, like Oregon’s Coordinated Care Organizations (CCOs), operate under state oversight and typically have a mission focused on public health outcomes and community welfare, rather than profit. CCOs are more likely to cooperate with mediation and ombudsman processes because of their public accountability and regulatory frameworks:

• Regulatory Oversight: CCOs are subject to state regulation and public accountability through bodies like the Oregon Health Authority (OHA). Their contracts are closely aligned with public health objectives, and they are more likely to participate in mediation if it helps resolve disputes that could affect public health or policy compliance.

• Mission-Driven: CCOs are often tasked with improving population health outcomes and addressing health disparities, meaning they are generally more willing to cooperate with processes that foster collaboration and dispute resolution to improve service delivery.

• Public Accountability: As CCOs manage Medicaid and other state-funded programs, they are held to higher transparency standards. Participation in mediation or ombudsman processes is more likely because they must balance efficiency and accountability to the public.

• Structured for Collaboration: Public health plans, by design, are structured to coordinate care across various providers and stakeholders. This coordination may encourage greater openness to mediation as a means of resolving disputes that affect multiple community stakeholders.

Key Differences Between Commercial and Public Health Plans

Aspect

Commercial Health Plans (e.g., Moda Health)

Public Health Plans (e.g., CCOs)

Focus

Profit-driven, prioritizing cost control and competition.

Mission-driven, focused on improving public health outcomes.

Oversight

Operates with greater autonomy; less regulatory scrutiny.

Heavily regulated by state authorities (e.g., OHA).

Mediation Participation

Voluntary and often resisted if seen as reducing profitability.

More likely to cooperate due to regulatory oversight and public accountability.

Transparency

Less transparent; driven by competitive advantages.

More transparent; required to meet public accountability standards.

Contracting Flexibility

Has flexibility to structure contracts favoring cost-saving measures.

Contracts structured around state-mandated objectives, often tied to value-based care and public health outcomes.

Willingness to Engage

May avoid engagement with ombudsman or mediation to protect financial interests.

More inclined to engage in mediation to resolve disputes in line with public health goals.

Why Commercial Health Plans May Resist Mediation

• Financial Risk: Engaging in mediation could expose cost-control practices or contract terms that may need renegotiation, which could negatively impact a commercial health plan's profitability.

• Avoiding Precedent: Participating in mediation might set a precedent that obligates the health plan to engage in similar disputes in the future, potentially leading to more legal challenges or disputes.

• Control of Process: Commercial plans prefer to control dispute resolution processes, and mediation, particularly under the guidance of an ombudsman, may diminish their leverage in negotiations.

Why Public Health Plans Are More Likely to Engage

• Regulatory Pressure: CCOs and other public health plans must adhere to state regulations, which may encourage or mandate participation in mediation processes.

• Mission Alignment: Mediation helps resolve disputes that affect care delivery, which aligns with the broader mission of improving community health outcomes.

• Collaborative Culture: CCOs are designed to be collaborative, and mediation fits naturally into their operational model of coordinating care across multiple stakeholders.

Conclusion

While public health plans like CCOs are more inclined to cooperate with ombudsman-facilitated mediation due to their regulatory obligations and mission-driven approach, commercial health plans like Moda Health may resist participation due to concerns over profitability, legal exposure, and the potential loss of control in contracting processes. Commercial plans have fewer obligations to engage unless required by law, while public health plans are more accountable to the state and public, making them more likely to participate in mediation.

Ombudsman and Health Plan Contracting Issues

I. Introduction

• Overview of Ombudsman Role and Limitations:
  The ombudsman serves as an independent, neutral party tasked with addressing complaints, mediating disputes, and providing oversight. However, ombudsmen typically lack the legal power to enforce cooperation or compel commercial entities, such as health plans, to engage in mediation.

• Challenges in Health Plan Contracting:
  Health plans, both commercial and public, face specific challenges in value-based contracting with mental and behavioral health providers, such as ensuring transparency, fairness, and accountability. Issues include bad faith contracting, lack of whistleblower protections, and resistance to standardized contract definitions.

II. Reasons Health Plans May Resist Ombudsman Mediation

1. Financial Interests

• Commercial health plans like Moda Health are profit-driven and may resist ombudsman intervention to protect their financial interests.

• Exposure to Financial Risk: Full cooperation with an ombudsman may lead to contract renegotiations, higher reimbursement rates, or additional costs that reduce profitability.

• Legal Exposure: Fear of uncovering contract violations, fraud, or antitrust activities can discourage cooperation with external oversight.

2. Fear of Legal and Regulatory Consequences

• Cooperating with an ombudsman may expose health plans to legal liability for unethical practices or regulatory non-compliance.

• Whistleblower Protections: Engaging with an ombudsman who facilitates whistleblower reports might increase the risk of public exposure to unethical behavior or contract violations, leading to legal scrutiny or penalties.

• Antitrust Concerns: Issues like price fixing or price bracketing could trigger regulatory investigations, which commercial plans are eager to avoid.

3. Control Over Internal Operations

• Health plans prefer maintaining control over internal processes and may resist external involvement, such as the Ethics Point Portals overseen by an ombudsman.

• Independence Concerns: External oversight threatens their ability to manage compliance and reporting systems, especially if independent auditors are required by the ombudsman.

4. Reluctance to Change Established Practices

• Resistance to Standardized Definitions: Health plans often resist adopting standardized definitions (e.g., for "fraud" or "value-based payment models") that might reduce their flexibility in contract negotiations.

• Plain Language Requirement: Full cooperation with an ombudsman would expose unclear or vague clauses in contracts, which health plans may use to their advantage.

5. Proprietary Information Concerns

• Health plans fear that sharing internal practices and contracting methods with an ombudsman could expose proprietary business strategies, weakening their competitive position.

6. Skepticism of Ombudsman’s Effectiveness

• Some health plans view the ombudsman’s role as limited in power or biased, particularly if they believe the ombudsman will favor providers or patients over the plan's interests.

III. Differences Between Commercial and Public Health Plans in Response to Ombudsman Mediation

1. Commercial Health Plans (e.g., Moda Health)

• Profit Motive: Focused on maximizing profits, commercial health plans are more likely to resist mediation, especially when it could lead to higher costs or unfavorable changes.

• Contractual Flexibility: Commercial plans value the flexibility to structure contracts in ways that prioritize cost savings, often resisting external oversight that may interfere.

• Reluctance to Transparency: Moda Health and similar plans may avoid ombudsman involvement to protect competitive advantages and maintain control over internal audits and compliance measures.

2. Public Health Plans (e.g., Coordinated Care Organizations - CCOs)

• Regulatory Accountability: CCOs are heavily regulated by state authorities like the Oregon Health Authority (OHA) and are more likely to cooperate with ombudsmen, given their accountability to the public.

• Mission-Driven: Focused on improving community health outcomes, CCOs are more willing to engage in mediation to resolve disputes that could affect care delivery or population health objectives.

• Structured for Collaboration: Public health plans are designed for coordination across various stakeholders, making them more open to mediation and dispute resolution processes facilitated by an ombudsman.

IV. Managing Health Plan Contracting Under the Mental and Behavioral Health Value-Based Contracting Integrity Act

1. Standardized Definitions

• The Mental and Behavioral Health Value-Based Contracting Integrity Act proposes standardized definitions for terms like "value-based payment models" and "fraud," which the Oregon Health Authority (OHA) would enforce.

• Ombudsman’s Role: Instead of legally enforcing these definitions, an ombudsman could facilitate discussions among health plans and providers to ensure agreement on standardized terms.

2. Plain Language Contracts

• The Act requires that contracts be written in plain language. While the OHA enforces this through fines and contract suspensions, the ombudsman could review contracts and offer recommendations for simplifying complex language.

3. Whistleblower Protections

• Under the Act, whistleblowers are protected from retaliation, and health plans face penalties for non-compliance. An ombudsman would act as an independent body to handle whistleblower reports, protect identities, and mediate disputes before escalating to formal penalties.

4. External Provider Reporting Systems

• The Act mandates that health plans establish Ethics Point Portals. If managed by an ombudsman, the ombudsman could centralize reporting, ensuring transparency and independence from health plan management.

5. Enforcement and Compliance

• While the Act grants the OHA the power to enforce penalties for non-compliance, the ombudsman would focus on mediation and voluntary cooperation to resolve disputes. If mediation fails, severe cases could be referred to the OHA for formal enforcement.

An ombudsman plays a critical, though limited, role in managing disputes and fostering cooperation between health plans and providers. While public health plans like CCOs are more likely to cooperate due to regulatory oversight, commercial health plans such as Moda Health may resist cooperation to protect profitability, avoid legal exposure, and maintain control over contracting processes. The Mental and Behavioral Health Value-Based Contracting Integrity Act proposes a robust legal framework for enforcing transparency and fairness, but the ombudsman’s role would complement this framework by focusing on mediation, dialogue, and problem-solving to address conflicts and avoid escalation.

Adequacy of Ombudsman and Internal Audit Departments in Responding to Allegations of Fraud and Antitrust Violations

I. Introduction

Both ombudsman offices and health plan internal audit and compliance departments play significant roles in addressing issues within health plan contracting, but their capacity to respond adequately to serious allegations like fraud and antitrust violations varies. Each approach has its strengths and weaknesses, particularly in ensuring good faith investigations and in promoting transparency and accountability.

II. Weaknesses of Ombudsman and ORS Approaches

1. Ombudsman Weaknesses:

• Lack of Enforcement Power: An ombudsman cannot legally impose penalties or mandate changes, limiting their effectiveness in addressing serious issues like fraud or antitrust violations.

• Voluntary Cooperation: Health plans, especially commercial ones, can choose not to cooperate in good faith, which diminishes the ability of the ombudsman to ensure fair investigations.

• Reactive, Not Proactive: Ombudsman offices typically respond to complaints after issues arise, rather than proactively addressing systemic risks such as bad faith contracting or market manipulation.

• Limited Scope: Ombudsmen often focus on resolving individual disputes and may not have the resources or authority to fully address broader regulatory issues, like price fixing or fraudulent contracting practices.

2. ORS Approach (Mental and Behavioral Health Value-Based Contracting Integrity Act) Adjusted Weaknesses:

• Health Plan Responsibility: The ORS approach assigns the responsibility for investigating, mitigating, and reporting issues directly to health plans. Health plans are expected to handle provider complaints through internal systems, under the oversight of the Oregon Health Authority (OHA).

• Potential Health Plan Resistance: While the ORS approach does not increase bureaucratic complexity, health plans may resist the requirements to self-investigate or implement Ethics Point Portals, especially if these reveal issues that could damage their reputation or profitability.

• Resource Allocation: The success of this approach depends on the OHA’s ability to enforce compliance, which may require significant resources.

III. Adequacy of Internal Audit and Compliance Departments in Responding to Allegations of Fraud and Antitrust Violations

1. Legal and Operational Independence

• Strength: Internal audit and compliance departments are structured to be legally and operationally independent of management, which means they are in a better position to conduct investigations into fraud and violations objectively.

• Weakness: Independence does not guarantee freedom from indirect influence. Factors like corporate culture or incentives may still sway how thoroughly these departments pursue allegations of fraud or antitrust violations.

2. Commitment to Regulatory Compliance

• Strength: Internal audit and compliance departments are bound by legal obligations to investigate in good faith. They must comply with industry standards and regulations, making them accountable for responding to serious allegations like fraud.

• Weakness: The primary focus of these departments may be on minimizing legal exposure and reputational damage rather than exposing systemic fraud or antitrust practices. This may lead to more internal resolutions instead of escalating the issues to external regulatory authorities.

3. Adequacy of Investigations

• Strength: These departments often have direct access to internal data and possess institutional knowledge, making them capable of conducting thorough investigations quickly and implementing internal corrective actions.

• Weakness: While they can handle fraud within the organization, addressing antitrust violations—which involve market dynamics and broader competition laws—might require external oversight, such as from the Federal Trade Commission (FTC) or Department of Justice (DOJ), which internal departments are not equipped to manage independently.

4. Reporting Obligations

• Strength: Internal audit and compliance departments are generally required to report their findings to boards of directors or regulatory bodies if significant issues are uncovered. This creates some level of external accountability.

• Weakness: However, internal investigations may prioritize resolving issues quietly, avoiding public scrutiny, and underreporting more significant violations to prevent reputational damage or trigger regulatory investigations.

IV. Comparison of Health Plan Responses to Ombudsman and Internal Audit Investigations

1. Commercial Health Plans (e.g., Moda Health)

• Ombudsman Cooperation: Commercial health plans, driven by profit motives, are more likely to avoid fully cooperating with an ombudsman, especially if transparency could result in financial or legal exposure. Their reluctance stems from the fear of uncovering bad faith contracting, price fixing, or other practices that could harm profitability.

• Internal Audit Cooperation: While internal audit departments are required to investigate in good faith, commercial plans may still prioritize protecting the company’s interests over full transparency. Investigations are more likely to focus on limiting liability rather than fully addressing systemic issues, especially when antitrust violations are involved.

2. Public Health Plans (e.g., Coordinated Care Organizations - CCOs)

• Ombudsman Cooperation: Public health plans are more likely to cooperate with an ombudsman due to their mission-driven goals and regulatory obligations. CCOs operate under state oversight and have a public health mandate, making them more responsive to external accountability and dispute resolution processes.

• Internal Audit Cooperation: Public health plans’ internal audit departments are typically more aligned with regulatory goals and public accountability, which increases the likelihood of thorough investigations into fraud and violations. However, similar limitations in handling broader antitrust violations may exist.

V. Will Health Plans Respond Adequately to Allegations of Fraud and Antitrust Violations?

Ombudsman’s Response:

• The ombudsman is unlikely to respond adequately to serious allegations of fraud and antitrust violations due to their lack of enforcement power and reliance on voluntary cooperation from health plans.

• Commercial health plans, in particular, are more likely to resist engagement with an ombudsman in good faith, fearing financial exposure and legal liabilities.

Internal Audit and Compliance Response:

• Internal audit departments are expected to investigate in good faith due to their legal independence from management, but their response may still be influenced by internal pressures to minimize public fallout.

• While they may be effective at addressing internal fraud, antitrust violations, which often require broader regulatory scrutiny, may not be handled as thoroughly without external oversight.

VI. Conclusion

While ombudsman offices and internal audit departments both serve critical functions, their ability to respond adequately to fraud and antitrust violations has limitations. Ombudsman offices lack the enforcement power needed to compel cooperation and fully address systemic issues, especially from commercial health plans like Moda Health, which may resist cooperation. Internal audit departments, although legally independent, may focus on internal resolution and damage control rather than public accountability, particularly in cases involving broader market misconduct like antitrust violations. In both cases, external regulatory bodies may still be necessary to ensure thorough and transparent investigations.

Assessing the Most Effective Approach for Urgent Health Plan Investigations: Internal Audits vs. Ombudsman Offices

When addressing matters that require urgent investigation, such as changes in case mix severity, need for risk adjustments, or unfair/ambiguous health plan policy changes, the internal audit and compliance departments of health plans would generally be the more appropriate approach compared to an ombudsman office, though each approach has its merits depending on the nature of the issue.

1. Internal Audit and Compliance Department – More Appropriate for Urgent Matters

Strengths:

• Timeliness and Access to Data: Internal audit and compliance departments have immediate access to the necessary data and resources within the health plan to respond quickly to urgent issues like case mix severity changes or risk adjustment needs. They are embedded within the organization, allowing them to swiftly identify and address operational problems.

• Legal Mandate to Act: These departments are required to respond to regulatory requirements and can initiate internal reviews immediately without needing external authorization. This makes them ideal for urgent investigations, especially when swift internal policy changes or adjustments are necessary.

• Direct Corrective Action: If a policy change is found to be unfair or ambiguous, internal audit teams can recommend direct corrective actions to management and ensure implementation without waiting for external mediation or oversight. For example, if health plan policy changes negatively affect provider reimbursement or case mix severity adjustments, the internal team can work directly to revise these policies.

• Regulatory Compliance: In situations requiring risk adjustment based on case severity, internal audit departments are already aligned with regulatory frameworks for risk management, ensuring that such adjustments meet legal and industry standards quickly.

Appropriate for:

• Case Mix Severity Adjustments: Internal departments can quickly assess changes in patient risk profiles and adjust payments or policies to reflect those changes. They have the technical expertise and the access to necessary patient data and algorithms used in risk adjustment models.

• Unfair or Ambiguous Policy Changes: When a health plan policy is unclear or has unfairly impacted providers, the internal team can promptly review the policy, clarify it, or make necessary changes.

• Risk Adjustments: These departments can respond urgently to situations where risk models need to be recalibrated, ensuring that health plans continue to fairly compensate providers based on the severity of cases they are handling.

2. Ombudsman Office – More Appropriate for Systemic or Prolonged Issues

Strengths:

• External Perspective: An ombudsman can bring a neutral, external perspective to assess whether changes in case mix severity or health plan policy adjustments are being implemented fairly. They may be more appropriate for identifying systemic patterns of unfairness that internal departments might overlook or underplay.

• Provider Advocacy: Ombudsman offices serve as advocates for providers and can mediate disputes about ambiguous health plan policies or changes that disproportionately impact certain providers or patients. However, their ability to act on such issues depends on voluntary cooperation from the health plan, which may slow down resolution in urgent cases.

• Building Accountability: For health plan policy changes that affect a broad range of providers or patients, the ombudsman can help escalate these issues to a regulatory level if internal audits are seen as insufficiently addressing the problems.

Limitations:

• Lack of Urgency: The ombudsman process is typically slower because it requires cooperation from the health plan and does not have the power to force immediate corrective actions. In urgent matters, this lack of enforcement power can delay necessary interventions.

• Dependent on Health Plan Cooperation: While the ombudsman can investigate unfair policies or ambiguous changes, their ability to effect change hinges on the health plan’s willingness to cooperate. If a health plan chooses not to engage, resolution may be delayed, making this approach less ideal for urgent issues.

Appropriate for:

• Systemic, Non-Urgent Issues: Ombudsmen are better suited for handling long-standing disputes or systemic issues that emerge over time rather than immediate operational problems.

• Mediation of Policy Conflicts: If providers and health plans are in conflict over ambiguous or unfair policy changes, the ombudsman can serve as a neutral mediator, but this is generally slower than internal audits directly addressing the issues.

Which Approach is More Appropriate for Urgent Investigations?

For urgent matters like changes in case mix severity, risk adjustments, and unfair or ambiguous health plan policies:

• Internal audit and compliance departments are generally more appropriate because they can act immediately, access relevant data quickly, and implement corrective measures without external delays. They are also already embedded in the health plan’s operational structure, allowing for a more efficient response to time-sensitive issues.

The ombudsman office, while valuable for systemic oversight and mediation in more prolonged disputes, is less effective for urgent operational issues due to its dependence on health plan cooperation and lack of enforcement power.

Conclusion

In matters requiring urgent investigation—such as changes in case mix severity, the need for risk adjustments, or unfair policy changes—internal audit and compliance departments are typically the more appropriate option due to their immediate access to data, ability to take swift corrective action, and operational alignment with regulatory requirements. The ombudsman office, while useful for systemic and long-term concerns, is less suited to handle urgent matters due to its slower processes and reliance on voluntary cooperation from health plans.