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July 25, 2023
Media Contact: Media Contact: Amy Bacher, amy.bacher2@oha.oregon.gov, 503-405-5403
PORTLAND, Ore. – New financial information reported to Oregon Health Authority (OHA) from 16 contracted coordinated care organizations (CCOs) shows that the state’s CCOs are financially stable and broadly recorded higher than normal profits in 2022.
OHA financial analysts noted high profit margins across the CCO program, including for contracted CCO partners. Based on these results, OHA has requested that CCOs submit plans to invest these profits back into the community and improve the health of Oregonians long-term.
CCOs deliver coordinated medical, behavioral, and dental benefits, as well as other services, to more than 1.1 million members enrolled in the Oregon Health Plan (OHP), Oregon’s Medicaid program. In total, OHP covers approximately 1.5 million people in Oregon, which is 1 in 3 Oregonians. It is the largest provider of health coverage in the state.
Senate Bill 1041 (ORS 414.593) requires CCO expenditures be made fully transparent and available to the public. CCO financial reports must be posted by Aug. 1, 2023. Financial statements for all 16 CCOs can be found here, along with additional CCO program financial summaries.
“Oregon’s coordinated care organizations remain financially strong and on average spent 88 cents of every dollar in their budgets on services for members,” said Dave Baden, OHA interim director. “We want to see CCOs continue to expand their profit sharing at the community level in ways that improve the health and lives of OHP members. We know that additional investments in critical need areas, such as behavioral health and housing, can make a significant difference in the lives of members.”
Highlights of the 2022 CCO financial reports include:
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Operating margins: OHA uses Net Operating Margin to measure the financial performance of CCOs. Net Operating Margin is calculated from the revenues of the organization minus the member medical expenses and administrative costs. Across the CCO system, the 2022 operating margin was 4.7%, up from 2.1% in 2021.
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Spending on services for members: Across the system, CCOs spent 87.8% of their income on member services and 7.5% on administrative costs, resulting in the 4.7% operating margin.
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Enrollment: Membership increased for 15 of the 16 CCOs over the past 22 months. As of December 2022, CCO membership increased by 350,000 people, or 39%. PacificSource-Community Solutions in Lane County reported the largest increase of 59%. Trillium Community Health Plan/Lane County reported the only decrease (a less than 1% decline).
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SHARE designations: The SHARE Initiative, Supporting Health for All through Reinvestment, is a legislative requirement for CCOs to invest a portion of their profits back into their communities. In 2022, CCOs were required to use a formula to determine their minimum SHARE contribution. CCOs were able to contribute more than the minimum at their own discretion and reported a combined total of $31 million in SHARE contributions for 2022, an increase of $26 million from 2021.
The SHARE Initiative addresses community needs around the social determinants of health and health equity (SDOH-E). A portion of funds must go to SDOH-E partners. Investments must include spending toward a statewide housing priority and align with local community health improvement plans.
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Health-related services: CCOs may provide health-related services beyond the standard Medicaid benefits to improve care delivery, member well-being and the health of the community. In 2022, CCO spending on health-related services nearly doubled from 2021, an increase of more than $28 million across the system.
OHA will continue to work with CCOs to develop plans for community investments and the best use of Medicaid funds to benefit communities in Oregon.
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