Current through Register Vol. 63, No. 9, September 1, 2024
(1) Pursuant to ORS
442.386, the Authority may
impose a financial penalty on a payer or provider organization when:
(a) The cost growth exceeded the target with
statistical confidence, as defined by the Authority; and
(b) The payer or provider organization's cost
growth is without reasonable cause, or is not indeterminate, as defined in
409-065-0035, in the Medicaid, Medicare Advantage, or commercial insurance
market for at least three out of five calendar years.
(2) The Authority must not impose financial
penalties before January 1, 2026, and the cost growth from 2021 to 2022 must
serve as the first year of a payer or provider organization's first five-year
period described in section (1)(b) of this rule.
(3) The financial penalty must be paid to
consumers or designed to directly benefit consumers.
(4) The size of a payer or provider
organization's financial penalty must be based on how much the payer or
provider organization exceeded the cost growth target and must be determined as
follows:
(a) A payer or provider
organization's first instance of a financial penalty within a given market must
equal 5 percent of the net total cost above and below the cost growth target
collectively in the five-year period.
(b) A payer or provider organization's second
instance of a financial penalty within a given market must equal 10 percent of
the net total cost above and below the cost growth target in the five-year
period.
(c) A payer or provider
organization's third instance of a financial penalty within a given market must
equal 15 percent of the net total cost above and below the cost growth target
in the five-year period.
(d) Each
instance of a financial penalty within a given market must increase by 5
percentage points of the net total cost above the cost growth target in the
five-year period.
(e) The total
cost above the cost growth target for a given performance period is calculated
by the following steps:
(A) First, subtract
from the payer or provider organization's per member per month (PMPM) cost in
the second year of the two-year performance period the product of the payer or
provider organization's per member per month (PMPM) cost in the first year of
the two-year performance period multiplied by the sum of one plus the cost
growth target percent. The Authority must use per member per month costs, as
defined by the Authority in CGT-1 data submission template as total medical
expenses. The mathematical formula is (PMPM year 2 - (PMPM year 1 * (1 + cost
growth target percent))) = x. In this OAR
409-070-0045, the value "x"
equals the calculated value of the mathematical formula in this subsection
(4)(e)(A).
(B) Second, multiply "x"
times the number of member months (MM) in the second year of the two-year
performance period. The mathematical formula is (x * MM) = z.
(C) Repeat the steps in subsection (4)(e)(A)
and (4)(e)(B) of this section for all five years of the five-year period. For
years in which the payer or provider organization's cost growth exceeded the
cost growth target, the calculated value of "x" and "z" will be a positive
number. For years in which the payer or provider organization's cost growth was
less than the cost growth target, the calculated value of "x" and "z" will be a
negative number.
(D) Sum all values
of "z" calculated in subsections (4)(e)(A) through (C) in this section. The
result is the net total cost above the cost growth target.
(E) Multiply the value in subsection
(4)(e)(D) of this section by the appropriate factor, as determined in
subsection (4)(a) through (4)(d) in this section.
(F) If the value calculated in subsection
(4)(e)(E) in this section is zero or negative, the payer or provider
organization will not be penalized for that five-year period.
(5) A payer or provider
organization's performance in a given year will be counted only once towards
the calculation of a net total cost above the cost growth target in a five-year
period. The five-year period will shift forward every year following payers'
submission of data as outlined in OAR
409-065-0010.
(6) The Authority may reduce the calculated
financial penalty amount if the payer or provider organization is subject to
one or more other penalties imposed by the State of Oregon or the federal
government for the same measurement period or if the penalties threaten the
solvency of the payer or provider organization. The Authority must consult with
DCBS on every instance of a penalty applying to a payer.
(a) Other penalties imposed by the State of
Oregon or the federal government include, but are not limited to, rebates
relating to the medical loss ratio. The amount of the other penalty or rebate
imposed by the State of Oregon or the federal government must be subtracted
from the penalty amount calculated in section (4) of this rule.
(b) The Authority must collaborate with DCBS
when determining if a penalty imposed by the Authority will threaten the
solvency of a payer and may reference information including but not limited to
the payer's risk-based capital amounts. The Authority must handle confidential
information received by DCBS in accordance with ORS
705.137 and may share
confidential information with DCBS. Such sharing shall not constitute a waiver
of the confidential status of such materials.
(c) The Authority may request financial
information from provider organizations when determining if a penalty amount
imposed by the Authority will threaten the solvency of a provider organization
and may reference information including, but not limited to, audited financial
statements.
(7) If the
Authority determines a payer or provider is subject to financial penalty under
this rule, the Authority must prepare and serve a Notice of Intent to Impose a
Financial penalty on the payer or provider organization. A payer or provider
organization that has been served a Notice of Intent has 60 calendar days to
either provide the Authority with a proposed plan for the financial penalty
pursuant to section (8) of this rule or file a written request for a contested
case hearing pursuant to the procedures outlined in OAR 409-065-0050.
(8) The Authority must publish sub-regulatory
guidance on the Program website outlining allowable financial plans including a
template for the proposed plan and the availability of additional technical
assistance. Financial penalties must:
(a)
Benefit community members who reside in or in close proximity to a geographic
area in Oregon that the payer or provider organization serves, and
(b) Not directly and financially benefit the
payer or provider organization.
(9) The payer or provider organization must
pay the totality of the financial penalty within 60 months after receiving a
Final Order Imposing a Financial penalty from the Authority, inclusive of all
appeal periods.
(10) The following
payer and provider organizations are exempt from OAR 409-065-0045 and will not
be subject to a financial penalty:
(a) A
Federally Qualified Health Center, as defined in
42 U.S.C.
254b, that is not affiliated with a hospital
through ownership, governance, control, or membership.
(b) A pediatric clinic or group of pediatric
clinics that predominantly treat individuals under the age of 21, that is not
affiliated with a hospital through ownership, governance, control, or
membership.
(c) The Oregon Health
Plan Open Card, also known as Fee For Service, Program.
(11) No later than December 31, 2030, the
Authority must reassess and, if necessary, revise the financial penalty
calculation methodology outlined in this rule.
Statutory/Other Authority: ORS
442.386
Statutes/Other Implemented: ORS
442.386
