CareOregon, the state’s largest provider of Medicaid benefits, will soon stop covering routine mental health and addiction treatment from out-of-network providers.
The Portland-based insurer said the move will affect about 15,000 of its members signed up on the Oregon Health Plan — the state’s Medicaid program that provides health coverage for low-income families and those with disabilities — and Medicare Advantage.
CareOregon said its coverage for out-of-network behavioral health services will end on Oct.1 for its Medicaid members and Jan. 1 for its Medicare Advantage.
CareOregon is a key player in the Oregon Health Plan. It owns and operates two coordinated care organizations — Jackson Care Connect in southern Oregon and Columbia Pacific in the northwest corner of the state. The nonprofit is also one of the largest contractors serving the clients of Health Share of Oregon, the coordinated care organization serving the Portland area.
Altogether, CareOregon manages Oregon Health Plan benefits for roughly 560,000 members, or just under 40% of the state’s Medicaid population.
Critics, including some mental health providers, have warned the decision could disrupt care for thousands of patients who rely on therapists or addiction specialists outside of CareOregon’s contracted network.
J.C. Stewart, a Portland-based licensed professional counselor not within CareOregon’s network, said the policy change means that he will have to let go of a dozen patients once the insurer stops reimbursing him for providing therapy services.
He said he’ll be spending the next two months trying to find in-network providers that he can refer his patients to.
“There’s such a strong need for mental health services that even non-contracted providers have waiting lists, just like contracted providers,” he said.
The nonprofit CareOregon said the policy change is part of a broader effort to manage rising health care costs and prepare for looming federal Medicaid funding cuts. In July, it laid off at least 80 workers and eliminated 70 positions, citing mounting financial pressures.
The decision follows an earlier decision by CareOregon to stop covering services from associate therapists and independently practicing social workers who aren’t affiliated with an in-network provider group, a change first reported by Willamette Week.
During the COVID-19 pandemic, CareOregon temporarily expanded access to both contracted and non-contracted behavioral health providers in response to growing demand and a statewide shortage of mental health professionals. That flexibility, the nonprofit says, was vital during an emergency — but it is no longer sustainable, the insurer said.
Out-of-network providers cost Medicaid coordinated care organizations more money since they haven’t agreed to any specific payment terms, which means they can set their prices independently.
The insurer said services from non-contracted providers can cost 40% to 95% more than those within its network. CareOregon added that the rule change will bring its services “into alignment with industry standards and with our peer Coordinated Care Organizations (CCOs).”
“(It) will allow us to continue meeting the needs of our members under new financial constraints — including sweeping federal Medicaid cuts,” the nonprofit said in a statement.
CareOregon said the shift will affect about 3% of its total membership and approximately 15% of those who use behavioral health services. It applies to services such as counseling, substance use treatment and psychiatric evaluations.
The insurer said that it will contact affected members directly and help them transition to in-network providers. CareOregon said that its behavioral health network is equipped to meet demand.
“We know change can be hard,” the organization said. “We are committed to supporting a smooth transition for everyone affected.”
The Tri-County Behavioral Health Providers Association, which represents many local mental health professionals, has backed the decision.
In a statement, Julie Ibrahim, president of the association’s board, acknowledged that the “change will have a substantial impact on both members and providers” operation outside the network but said the policy change will “enhance accountability and care quality, improve access tracking, and foster stronger partnerships across the system.”
CareOregon said its members will continue to have access to culturally and linguistically specific services, and that the policy is not expected to disproportionately impact communities of color.
— Kristine de Leon is a reporter for The Oregonian/OregonLive focusing on consumer health and data enterprise stories. Contact her at kdeleon@oregonian.com.
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