OREGON: MEDICAID MENTAL HEALTH OPENED TO OUTSIDE BIDDERS
"Out-of-state competitors may grab a share of the mentalThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
health treatment business in Oregon, thanks to a recent move to
open state Medicaid work to all bidders," THE BUSINESS JOURNAL OF
PORTLAND reports. If the state Legislature approves the managed
mental health care expansion, providers based outside of Oregon
will be able to compete for the $270 million in treatment
business over the next two years. "That could mean a shift
toward privatization in Oregon's mental health market," the
BUSINESS JOURNAL reports. Previously, only out-of-state
companies that already had an affiliation in Oregon could bid on
OUT OF TOWN VISITOR: A total of 42 bidders have submitted
letters of intent to the state; "at least three" of which are out
of state providers. "We're expanding our public-sector business
beyond Southern California," said Blake Chaffee, director of
government programs for Vista Behavioral Health Plans of San
Diego, which submitted a bid for a three-county area. Other
interested out-of-state providers include United Behavioral
Health of San Francisco, Value Health Inc. of Avon, CT.
UNWELCOME WAGON?: "While other bidders may also get a cold
shoulder from area partners and insurers, their interest in
Oregon concerns some counties and nonprofit mental health
providers," BUSINESS JOURNAL reports. Michael McCracken,
executive director of the Association of Oregon Counties, said
that "some counties oppose the changes -- especially so late in
the discussion about expanding mental health treatment for
Medicaid recipients." He said, "It really changes the dynamics
quite a bit. It definitely does not support the credibility of
the agency when the major goal post changes."
INCLUSION: According to Barry Kast, administrator of the
Oregon Mental Health Developmental Disabilities Services
Division, the state extended its RFP to out-of-state providers
"to stave off potential legal challenges, because federal rules
preclude the state's ability to limit competition." Kast said,
however, that "the state will give first consideration to any
county applicants going after the" Medicaid business, "provided
they meet certain criteria." He added that the state does not
plan to hire "one or two national firms to handle all of the
state's mental health business" but instead "plans to negotiate
on a county-by-county basis."
DEMONSTRATION PROJECT: "The expansion follows a two-year,
four-county demonstration program that showed how managed mental
health benefits would work with Medicaid," BUSINESS JOURNAL
reports. According to Kast, the pilot project "showed
significant system improvements, including less frequent and
shorter hospital stays that resulted in savings." Kast said,
"The way to control costs is through a prepaid managed program."
Applications are due in mid-June and the state plans to award
contracts that will begin October 1 (Brock, 2/24).