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Unclear why state leaders weren’t told of health care overpayments

The federal government told the health authority about overpayments in 2016, but top management and the governor weren’t told until recently

By Claire Withycombe

Capital Bureau

Published on November 6, 2017 8:43PM

Last changed on November 7, 2017 8:49AM

SALEM — The Oregon Health Authority can’t say who the federal government told in 2016 that it wanted repayment of $74 million in health care funds, or why that information wasn’t shared with top managers or the governor until last month.

In 2016 the Centers for Medicaid and Medicare Services notified the health authority that the state had since 2014 mistakenly categorized people who were eligible for both Medicare and Medicaid. The mistake resulted in Oregon receiving excess federal funding with which it overpaid providers by about $74 million.

The state was able to quietly recoup $10.1 million from providers in 2016. The state could be on the hook for all of the remaining $64 million, unless the Medicare program shares the tab.

Nevertheless, it was a state mistake that caused the overpayment. Improper data entry and software flaws on the health authority’s end led to patients getting improperly coded and paid for, officials say.

Neither Gov. Kate Brown or her then-health care policy adviser were alerted to the problem when the federal government notified the health authority in 2016. Brown learned of the issue late last month.

It’s unclear why Brown was not notified sooner.

“I don’t know what informed the decision to share and not to share,” said Robb Cowie, a health authority spokesman.

Cowie said Monday that new leadership at the agency, including Director Patrick Allen and Chief Financial Officer Laura Robison, are trying to get to the bottom of the problems, including how much the state may owe to the federal government and whether they can claw it back from Medicaid providers.

This latest issue occurs in the wake of controversy over the state’s handling of the Medicaid expansion under the Affordable Care Act.

Two months ago, former Oregon Health Authority Director Lynne Saxton resigned after revelations about an internal plan to publicly discredit a Portland-area Medicaid provider network. That announcement followed several months of tension over the state’s hiccups in verifying that Oregonians on Medicaid were indeed still eligible for the program.

The state’s woes around Medicaid implementation began, though, in 2014 with the failure of Cover Oregon, a massive technology project that was supposed to become a state health care exchange.

The public-facing website never went live, but the state ended up using some Cover Oregon databases internally, which the health authority says led to problems that are being aired now in the wake of reporting and public-records requests by The Oregonian.

Part of the issue was that the patient eligibility data system that would track a patient’s status changes didn’t link up with a separate software system for payments.

The distinction between Medicaid and Medicare matters to state government because of who pays: states and the federal government bear the costs of Medicaid, but Medicare, the program for the elderly, is paid for by the federal government only.

Cowie says that the front-end problems should be resolved by the state’s new eligibility system, which is called ONE and links to the state’s payment system.

It also contains more accurate information about patients, Cowie said.

State Rep. Knute Buehler, a Bend Republican who wants to challenge the governor in 2018, called for an outside investigation of the overpayment issue Monday in a letter to Brown.

He plans to introduce legislation in the upcoming short session, which begins in February, to require repayment of the remaining $64 million from Medicaid providers.

Meanwhile, the Secretary of State’s Office is conducting an audit of the state’s Medicaid system that is expected to be complete by early December.

The Capital Bureau is a collaboration between EO Media Group and Pamplin Media Group.


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