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Management problems endemic at OHA

Recent revelations that OHA overpaid providers by $74 million is the latest in a long string of blunders at the agency.

By Claire Withycombe

Capital Bureau

Published on November 7, 2017 7:11PM

Observers say management issues at the Oregon Health Authority are responsible for the growing list of failures at the agency.

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Observers say management issues at the Oregon Health Authority are responsible for the growing list of failures at the agency.

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SALEM — While technical failures are to blame for recent issues at the Oregon Health Authority, observers say mismanagement is likely at the root of its problems.

Last week’s news that OHA overpaid Medicaid providers by $74 million over three years was merely the latest in a steady stream of negative news about the agency, which has thousands of employees and a budget of roughly $10 billion per year.

In addition to the overpayment issue, and recent problems with verifying patient eligibility for Medicaid, state government is also haunted by the specter of Cover Oregon, a failed health insurance exchange, which cost taxpayers $300 million.

Management issues may, in part, explain why the list of errors is growing long, said Steve Buckstein, founder of the Cascade Policy Institute, an Oregon libertarian and free-market think tank.

“You know, in one sense they’re software problems,” Buckstein said. “In another sense, they’re management problems, because they’re so complex, because they don’t think through all the problems they’ll have to deal with.”

Problems have been building at the agency for some time.

“OHA has been in deep trouble now for years, and this feels like just a continuation of problems that are endemic to the organization,” said Jim Moore, director of the Tom McCall Center for Policy Innovation at Pacific University.

The fact that the governor was reportedly not informed of the issue when it arose last year may speak to those problems, Moore said.

“There’s clearly an organizational problem,” Moore said. “As soon as this was known by anybody who met regularly with the governor, they needed to tell the governor.”

The federal Centers for Medicare and Medicaid Services sent a notice to the agency about the overpayment issue at some point in 2016, but OHA can’t say who specifically was notified or exactly when.

Moore and Buckstein diverge on whether the fact that one party controls most of the state’s branches of government plays a role in recent failures by agencies to correct course.

Most state executive offices are held by Democrats, as are both chambers of the Legislature.

“My reading of Oregon history is it’s not,” Moore said, “And it is, however, part of bureaucracies that get self-centered, and they stop responding to outside pressure.”

Buckstein, though, said that having one party in control can increase reluctance to raise red flags.

“It’s not the fact that they’re Democrats, it’s the fact that they’re all the same party and philosophy,” Buckstein said. “There’s pressure not to criticize your compadres, so to speak, and there’s the same pressures in the Republican Party.”

Buckstein also maintains that from his political perspective, the government should play a limited role in healthcare.

“I think it’s really a matter of trying to do what they shouldn’t be doing in the first place, and they’re not doing it very well,” he said.

Oregon Secretary of State Dennis Richardson, a Republican, said last week that an audit of the state’s Medicaid program, expected to be complete by early December, will highlight management problems.

OHA, for its part, says its new eligibility system, which was fully implemented earlier this year, is more accurate and links up with the payment system properly, so the overpayment problem will not continue. A recent audit by the Secretary of State also found that those two systems worked well.

The agency says it has also streamlined who can retroactively determine someone ineligible for Medicaid in an effort to keep better track of patient data.

OHA’s new director, Patrick Allen, has also promised to increase transparency at the agency.

Gov. Kate Brown appointed Allen, the former head of the Department of Consumer and Business Services, to the OHA post two months ago in the wake of another recent scandal at OHA — August news that top officials had planned to discredit a Portland-area Medicaid provider by planting negative stories in the press.

Allen’s first email to OHA staff, released to the EO/Pamplin Capital Bureau through a public records request, acknowledged Cover Oregon created problems internally as well as externally.

“I have seen the impact the Cover Oregon failure had on people who needed coverage through Oregon’s Health Insurance Marketplace and the Oregon Health Plan,” Allen said. “As well as the resulting decrease in public trust and staff morale.”

Allen has also brought on new staff members and, instead of keeping the duties of a chief operating officer and chief financial officer in one position, decided to make them separate. He also said the agency would be “taking some time to evaluate the best organizational structure” for the Medicaid program.

Moore said that some of the entrenched issues may be resolved by hiring people whose expertise is the “nuts and bolts” of technical systems in healthcare, who know what the potential pitfalls are and what to watch out for — someone who played a management role at the OHA equivalent in another state.

“So far, (Brown) has moved people from one agency to another,” Moore said. “...Which is good, but you know, is that enough?”


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