Reinstituting Restrictive Policies: CareOregon’s New Barrier to Mental Health Services
Summary
CareOregon’s decision to reinstate restrictive reimbursement policies for qualified counseling and psychotherapy associates may have far-reaching consequences for providers, patients, and the health plan itself. This policy change, scheduled to take effect July 31, 2025, may deepen Oregon’s mental health crisis by denying care to CareOregon members, discouraging new entrants to the field, reducing service capacity, and increasing CareOregon’s long-term costs.
Introduction
CareOregon is a nonprofit organization. Established in 1993, it operates as a 501(c)(3) public benefit nonprofit, primarily serving low-income Oregonians by providing health insurance services through the Oregon Health Plan (Medicaid) and Medicare. As a Safety Net Health Plan, CareOregon derives nearly all its revenue from public programs, including Medicaid, Medicare, and the State Children’s Health Insurance Program (SCHIP). In 2023, CareOregon reported total revenue of approximately $2.48 billion and total expenses of about $2.43 billion, which illustrates its significant role in Oregon's healthcare system.
CareOregon's stated mission is to inspire and partner to create quality and equity in individual and community health, with a vision of achieving healthy communities for all individuals, regardless of income or social factors.
Mental health access remains a pressing issue nationwide, with Oregon particularly impacted due to its longstanding shortage of psychotherapists and other mental health professionals. This challenge, driven by systemic under-investment in behavioral health and restrictive policies, constrained access to care even under normal circumstances. Before the COVID-19 pandemic, many health plans, including CareOregon, refused to reimburse services provided by associate-level mental health professionals under independent supervision. That policy restricted the mental health workforce pipeline and limited the availability of affordable care.
The pandemic exacerbated the problem. There was a 30% increase in demand for mental health services as people coped with unprecedented stress, isolation, and economic insecurity. During this period, CareOregon’s made a policy change which allowed independently supervised associates to provide reimbursable care, alleviated some of the immediate pressures. However, CareOregon’s recent decision to revert to pre-pandemic restrictions has raised concern about the long-term consequences for providers, health plans, and patients.
This discussion explores the impacts of CareOregon’s policy shift, its probable financial motivations, and the potential benefits of permanently adopting inclusive reimbursement practices.
Impacts on Providers
Workforce Development and Retention Challenges
The mental health field relies on a steady flow of professionals advancing from associate-level to fully licensed practice. By denying reimbursement to independently supervised associates, CareOregon risks discouraging new professionals from remaining in the field. Associates often work in under-resourced areas or organizations serving vulnerable populations. Without financial incentives, these professionals may leave for states or employers with more supportive policies, exacerbating Oregon’s workforce shortage.
For example, clinics which relied on associates during the pandemic to manage high patient volumes may now face reduced capacity. Licensed therapists will bear the burden of providing reimbursable services, increasing their workload and risking burnout. This will likely lead to higher turnover rates among licensed providers, further deepening workforce challenges.
Service Delivery Gaps and Accessibility Issues
Reinstating prior restrictive policies will significantly limit the capacity of the CareOregon mental health system to meet patient needs. Allowing independently supervised associates to bill for services during the pandemic reduced waitlists and supported timely care. Without this provision, patients may face delays of weeks or months for appointments, worsening outcomes for conditions like anxiety, depression, and PTSD.
This issue is particularly acute in rural and underserved areas, where associates often fill critical service gaps. Removing reimbursement for their work may leave several communities without adequate mental health care. CareOregon’s assertion that the policy change will “improve quality of care” is disingenuous and unfounded.
Financial Burden on Early-Career Professionals
Associate-level professionals are at the beginning of their careers, balancing training costs, supervision fees, and student debt. Removing the ability of many to bill CareOregon for services may make practice financially unsustainable for some associates and drive them out of the profession. This may reduce the availability of diverse and skilled providers in the field, ultimately harming patients and the broader mental health system.
Impacts on CareOregon
Higher Long-Term Costs
CareOregon’s policy reversal may result in higher costs for the health plan in the long run. With fewer providers available, patients may increasingly seek care through emergency departments or out-of-network providers—both of which are significantly more expensive than reimbursing supervised associates. Additionally, untreated or delayed mental health conditions often escalate into chronic issues that require intensive, higher-cost interventions over time.
For example, untreated anxiety disorders can exacerbate physical health conditions such as heart disease and exacerbate medical care seeking itself, raising overall healthcare costs for the health plan.
Reduced Patient Satisfaction and Retention
Limited access to care and long wait times are leading drivers of member dissatisfaction. CareOregon risks losing the credibility and trust of its members by failing to adapt policies to the realities of the mental health crisis. Dissatisfied members may switch to competing plans with more accessible behavioral health services, resulting in a loss of market share and revenue.
Policy Misalignment with Public Health Goals
The decision to reinstate restrictive policies undermines progress made in expanding mental health care access during the pandemic. Temporary changes demonstrated that reimbursing independently supervised associates could effectively address workforce shortages and improve patient outcomes. Reverting to restrictive reimbursement practices signals lack of commitment to addressing public health challenges, potentially drawing criticism from advocacy groups, providers, and policymakers.
Probable Financial Motivations for CareOregon’s Return to Restrictive Policies
Consolidating Providers into Group Practices
CareOregon currently has contractual relationships with several mental health provider organizations across the state. While an exact number is not publicly available, a 2021 report indicated that CareOregon planned to invest $7.5 million in approximately 25 behavioral health service provider organizations to enhance recruitment and retention of clinical professionals.
Reinstituting restrictive reimbursement policies can push providers away from independent practice and toward such group practices. Health plans often have financial arrangements or ownership stakes in these groups, creating several advantages for CareOregon:
Negotiating Power: Health plans gain leverage to standardize and lower payment rates when contracting with groups rather than individual providers.
Cost Efficiency: Group practices pool resources, such as administrative functions and compliance systems, reducing operational costs that ultimately benefit the health plan.
Revenue Sharing: If the health plan owns or partners with group practices, it profits directly from these arrangements.
Reducing Out-of-Network Claims
Independent practitioners often operate outside the bounds of strict network agreements, increasing out-of-network claims and costs. Consolidating providers into groups that are part of the health plan’s network reduces these liabilities and ensures predictable expenses.
Limiting Provider Autonomy
Independent practitioners have more freedom to pursue high-cost care modalities, which may not align with the health plan’s cost-control goals. Group practices, under stricter administrative oversight, ensure compliance with standardized care pathways, prioritizing efficiency and cost savings.
Benefits of CareOregon’s Continuing to Support All Associates’ Reimbursement
Strengthening the Workforce Pipeline
Reimbursing independently supervised associates incentivizes entry into the mental health profession and supports the career progression of new practitioners. This approach addresses financial barriers for early-career professionals, helping to cultivate a robust and sustainable workforce.
Improved Access and Patient Outcomes
Maintaining a provider pool that includes independent supervised associates reduces wait times, enabling patients to access care when needed. Timely interventions are critical for managing mental health conditions and preventing escalation to more severe stages.
Cost-Effective Care Delivery
Associates typically command lower reimbursement than fully licensed therapists, enabling more efficiency without compromising care quality. Allowing independently supervised associates to bill for services provides a cost-effective solution to meet a continued demand.
Enhanced Reputation and Public Trust
Continuing policies that prioritize mental health access would position CareOregon as a leader in innovative, patient-centered care. That could enhance member loyalty, provide more care for patients, and bolster the plan’s reputation in the competitive healthcare market.
DISCLAIMER and PURPOSE: This discussion document is intended for training, educational, regulatory, legislative, and or research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.
For more information see: https://www.mentorresearch.org/disclaimer-and-purpose