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October 17, 2024
Media contact: Franny White, Franny.l.white@oha.oregon.gov, 971.349.3539
OHA sets 2025 rates for Oregon Health Plan care coordination, finds CCO profits narrowed after 2022
SALEM, Ore. – Oregon Health Authority (OHA) will pay 3.1.% more per month in 2025 for coordinated care organizations (CCOs) to provide Medicaid benefits to eligible Oregonians. As a result, OHA will pay an average of $529.89 per-member-per-month next year for CCOs to coordinate the medical, dental and behavioral health care services for most of the state’s Medicaid enrollees.
“CCO rates provide reliable funding that ensures eligible Oregonians can continue to access quality, comprehensive health care through Medicaid,” said OHA Director Sejal Hathi, M.D., M.B.A. “This funding anchors the important care coordination that CCOs provide as pandemic-era supports end and more people use health care services.”
In Oregon, Medicaid provides health coverage to about 1.4 million people, including low-income adults, children, pregnant women, elderly adults and people with disabilities, regardless of their immigration status. Medicaid is administered by states according to federal requirements, and the program is jointly funded by states and the federal government.
OHA contracts with CCOs to coordinate health care for those who receive insurance through the Oregon Health Plan (OHP), the state’s Medicaid program. CCOs coordinate care for the vast majority of OHP members, or about 1.3 million people.
The per-member-per-month payments that OHA pays CCOs, also called CCO capitation rates, are updated annually based on CCO financial data. OHA developed 2025 capitation rates after analyzing CCO financial performance for 2023, the last year for which full financial data is available.
The state’s 16 CCOs collectively had a 2.2% consolidated operating margin in 2023, taking in a total of $173 million net operating income that year, according to a brief that OHA released this summer. While most CCOs had a net profit in 2023, four operated at a loss.
New, preliminary analysis also suggests that CCOs may experience lower profit margins this year. OHA analysts have calculated that Oregon CCOs collectively had a 1.3% consolidated operating margin through June 30, 2024, taking in a total of $50 million net operating income. Five CCOs reported having an operating loss during the first half of 2024 as part of the risk-based contracts. Full analysis of 2024 CCO financial performance will be released in 2025.
Recent CCO operating margins may have peaked at 4.6% in 2022, when fewer people accessed routine health care services due to the COVID-19 pandemic. Still, the apparent 2022 peak was comparatively lower than the highest-recorded 7.5% operating margin that CCOs collectively experienced in 2014, when the Affordable Care Act expanded Medicaid eligibility.
Other key CCO financial performance data from 2023 include:
- CCOs collectively spent 89% of their total revenue on member services in 2023.
- CCO total per-member-per-month spending on member services increased 3% annually from 2022, reaching an average of $428.90 per-member-per-month in 2023.
- CCO spending on substance use disorder and behavioral health care combined increased 22.5%. This growth was largely fueled by Oregon’s focus on both areas, including the passage of Oregon House Bill 5202 in 2022, which increased Medicaid behavioral health reimbursement rates on average by 30% for providers who work primarily in Medicaid.
- CCOs spent a total of $20.2 million toward the Supporting Health for All Through Reinvestment (SHARE) Initiative. For the first time in 2023, the SHARE Initiative began requiring CCOs to spend a portion of their net income or reserves on services to address health inequities and social determinants of health.
- CCO spending on health-related services, which improve health quality but aren’t covered by traditional Medicaid, hit a new high of $121 million – nearly double the amount spent in 2022.
The 2025 CCO capitation rates reflect new initiatives that will roll out in the coming months, including:
- Financial incentives for increasing dental care access for Medicaid patients in 2025. CCOs will facilitate additional payments for dentists who provide some preventive services to OHP members, and also pass along annual incentive payments to dentists who increase the number of OHP members they serve.
- Compensation for supporting OHP members’ health-related social needs beyond standard Medicaid benefits. For example, addressing housing and nutrition needs will be reimbursable for the first time in November 2024 through the state’s Medicaid 1115 Demonstration Waiver.
- Increased reimbursement for hospitals with more than 50 beds that provide psychiatric in-patient services.
While OHA normally aims to increase CCO capitation rates 3.4% annually, the 2025 rate increase has been set at 3.1% due to state funding constraints. OHA will continue to monitor CCO access to care data and measures to ensure members are able to receive timely, high-quality care.
Oregon Revised Statute 414.593 requires that CCO expenditures be made fully transparent and available to the public. Financial statements for all 16 CCOs can be found here.
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