Reform Update: CMS won't limit flexibility of Oregon CCOs, state says

The CMS and Oregon are stepping back from an apparent clash over how the state is paying the managed-care organizations serving Medicaid beneficiaries in its nationally watched Medicaid demonstration. State officials and leaders of Oregon's coordinated-care organizations had expressed strong concern that the CMS was limiting their flexibility in providing services to keep patients healthy.

On Aug. 7, the CMS sent a letter (PDF) to the Oregon Health Authority, which oversees the state Medicaid program, criticizing the process by which the state sets capitation rates for CCOs. It gave the state until January to come up with a fix for the issue.

But this week, CMS Medicaid Director Cindy Mann said those issues would not get in the way of her agency's support of Oregon's Medicaid transformation plan, which the Obama administration hopes other states will learn from. “CMS' support for Oregon's approach to transform their healthcare delivery system by paying for better health outcomes remains steadfast,” Mann said in a written statement.