The Oregon Department of Human Services builiding, which houses the Oregon Health Authority offices, in Salem, Oregon, Saturday, March 18, 2017.
Bradley W. Parks / OPB
Health departments in the tri-county region around Portland are contemplating layoffs or job cuts for dozens of employees serving people with severe mental illness due to reductions in the Oregon Health Plan that serves low-income people.
County officials learned last week that Health Share of Oregon, the regional organization overseeing care for the program, is terminating their behavioral health contracts as of Dec. 31. County officials told The Lund Report that, combined, the contracts are worth more than $15 million a year.
In Clackamas County alone, which will experience a $2.6 million cut, as many 15 full-time jobs could go away, a spokesperson said. In Washington County, which will see close to $4 million in cuts, “We are working to determine when to stop enrolling new … clients, and how and where to transition current clients,” said communications director Wendy Gordon.
While only Clackamas provided an estimate, the size of the cuts mean most of the jobs of the staff operating three programs could go away. The programs are intended to reduce overall health care costs in the state, including intensive care coordination and care for people who are in jail. On Thursday, Multnomah County’s health officials discussed the surprise cuts in a meeting of elected board members, causing alarm.
“For Multnomah County Behavioral Health, this means about $8.6 million in reductions that will impact the Behavioral Health Resource Center, jail coordination, intensive care coordination for adults and children and the Choice Program‚” said Rachael Banks, the county’s health director.
County officials attribute the cuts to Oregon Health Plan rates announced earlier this month that in some areas, including Portland, are not expected to cover costs of care. The announcement came as state government struggles to respond to a projected budget hole of close to $400 million.
It’s unclear if state health officials and Gov. Tina Kotek’s office were expecting the move. Oregon Health Authority leaders have repeatedly declined to discuss in interviews its rate-making process and potential implications for access.
State health officials have issued belated written responses to questions, essentially saying they’ve done the best they could. Kotek has pushed the Legislature to increase funding for the state’s behavioral health system, and convened a roundtable to improve care for the severely mentally ill.
CareOregon oversaw the contracts on behalf of Health Share of Oregon. Health Share, a collaborative with the counties and local hospital systems, is one of 16 regional coordinated care organizations, known as CCOs, that the state pays to provide care to more than 1 million low-income Oregonians.
Earlier this year, Oregon Health Authority officials told state lawmakers to expect and budget for rate increases to the Oregon Health Plan care organizations of 3.4% on average. In April, according to a spokesperson, the agency told lawmakers that would not be enough.
Health care costs have been going up 10% or more around Oregon and the country, fueling an increase in health insurance rates of about 18% across the country.
In response to warnings that some care organizations would go out of business, state officials then offered rates of 6.8% to the Oregon Health Plan care organizations — before jumping them to 10.2% on average.
Despite the state’s last-minute hike, PacificSource has asked for further concessions to keep serving people in Lane County, causing the state to start preparing a procurement process to serve 92,000 people there now served by the Portland-based health insurance company.
Some of the other regional care organizations are, for now, agreeing to the rates while saying they are sure to lead to further losses.
“Rates paid to CCO’s have not kept pace with the level of care being utilized over the past several years,” a Health Share spokesperson said in an email to The Lund Report.
“While we appreciate the significant increase in the 2026 rates, they do not cover the cost of services we provide, and Health Share, together with our county partners, has had to make tough decisions to keep the system sustainable.
“As part of that process, we decided not to renew the contracts at the end of this year. We will continue to focus on ensuring members have the care they need and deserve, as we work toward a more sustainable model.”
The regional care organizations enjoyed windfall profits during the pandemic, but for more than a year their executives have said costs are outstripping the state’s payments, leading to huge losses.
This story was originally published by The Lund Report, an independent nonprofit health news organization based in Oregon. It is republished with permission. You can reach Nick Budnick at nick@thelundreport.org or @NickBudnick on X.
This republished story is part of OPB’s broader effort to ensure that everyone in our region has access to quality journalism that informs, entertains and enriches their lives. To learn more, visit opb.org/partnerships.