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Oregon has picked the winners in the $6 billion-a-year coordinated care sweepstakes.

In the biggest single procurement in the history of the state, the Oregon Health Authority on Tuesday awarded five-year contracts to 11 bidders, all of them incumbent coordinated care organizations.

“These contracts are our effort to up the game of CCOs all across the state and really significantly improve the value that Oregonians get for their health care,” said Pat Allen, head of the health authority. “I think the fact that we had several CCOs that struggled a little bit with this application process is evidence that this is a higher bar.”

Medicaid services

CCOs are key cogs in Oregon’s innovative system to administer Medicaid, the sprawling national system that offers health care to the poor. The Affordable Care Act expanded qualifying standards for Medicaid effective 2014. In Oregon, the Medicaid population grew from from about 600,000 to 1 million.

State officials have asked the CCOs to expand the scope of their operations with a new emphasis on behavorial health and to focus on so-called “social determinants” of health. These factors include income, education, healthy behaviors and social support systems that can influence a person’s medical needs.

Biggest winner

Perhaps the biggest winner of the day was Trillium Community Health Plan, the Eugene-based CCO that until now had served only Lane County. The state OK’ed Trillium’s request to expand into Multnomah, Clackamas and Washington counties, as well as portions of Linn and Douglas counties.

The expansion gives Trillium the largest potential customer base of any CCO.

Trillium raised eyebrows in the healthcare world in 2015 when the physician group that launched the CCO sold it to Centene, a large for-profit health insurance company, for $109 million.

PacificSource of Portland also had a good day. It’s proposed expansion into Lane, Marion and Polk counties was approved as were its two existing CCOs serving Central Oregon and the Columbia Gorge.


The new territory represents an enormous expansion for PacificSource. Its ’s potential customer base will increase from about 60,000 currently to 235,000 with the addition of Marion, Polk and Lane counties.

Perhaps not surprisingly, Ken Provencher, PacificSource president and CEO, said he was happy with the state’s selection process, which he called “very careful and thorough.”

The bidding was more of mixed bag for Moda, another Portland-based insurer. The CCO it operates in Eastern Oregon was approved for renewal. Separately, it also is a new partner in Healthshare, the CCO that serves the metro area.

But two new CCOs Moda created in hopes of expanding into Lane, Clatsop, Columbia and Tillamook counties were rejected. Moda spokesman Jonathan Nicholas said the company is “delighted” to be renewed in Eastern Oregon, where it serves 50,000 people. ”Today’s decision affirms that our innovative community-based approach works — and will continue to work,” Nicholas said. “We had hoped, based on our demonstrated success in Eastern Oregon, that we’d have the opportunity to deliver these same high levels of care to people on the North Coast and in Lane County.”

State rejections

Moda was not the only company to get a thumbs-down from state regulators.

PrimaryHealth, the CCO serving Grants Pass and much of the rest of Josephine County, got rejected by the state. It is the only incumbent CCO to get a flat denial. State regulators cited, among other things, the deteriorating financial condition of PrimaryHealth’s parent company. The state’s analysis determined PrimaryHealth’s business model was unsustainable, Allen said.

The health authority put four other incumbent CCOs on one-year contracts due to various shortcomings.

Allen characterized the one-year contracts as a probationary period. All four will enter into a “remedial” agreement with the state to improve operations.

Rural challenges

In general, state regulators determined CCOs operating in rural areas are having more difficulty meeting the state’s expectations than their urban counterparts, Allen said. The incumbent CCO that got rejected and all of those that received the probationary one-year contracts operate in Josephine, Jackson, Klamath, Yamhill and Douglas counties.

Douglas County is the site of a particularly dramatic change. Not only is Trillium moving in, state regulators put incumbent Umpqua Health Alliance on a one-year contract. Among other things, state officials said they were concerned about the management fee Umpqua Health Alliance paid its parent and affiliate companies.