(a) Support accountability for the total cost of health care across all providers and payers, both public and private;
(b) Build on the state’s existing efforts around health care payment reform and containment of health care costs; and
(c) Ensure the long-term affordability and financial sustainability of the health care system in this state.
(2) The Health Care Cost Growth Target program is established. The program shall be administered by the Oregon Health Authority in collaboration with the Department of Consumer and Business Services, subject to the oversight of the Oregon Health Policy Board. The program shall establish a health care cost growth target for increases in total health expenditures and shall review and modify the target on a periodic basis.
(3) The health care cost growth target must:
(a) Promote a predictable and sustainable rate of growth for total health expenditures as measured by an economic indicator adopted by the board, such as the rate of increase in this state’s economy or of the personal income of residents of this state;
(b) Apply to all providers and payers in the health care system in this state;
(c) Use established economic indicators; and
(d) Be measurable on a per capita basis, statewide basis and health care entity basis.
(4) The program shall establish a methodology for calculating health care cost growth:
(a) Statewide;
(b) For each provider and payer, taking into account the health status of the patients of the provider or the beneficiary of the payer; and
(c) Per capita.
(5) The program shall establish requirements for providers and payers to report data and other information necessary to calculate health care cost growth under subsection (4) of this section.
(6) Annually, the program shall:
(a) Hold public hearings on the growth in total health expenditures in relation to the health care cost growth in the previous calendar year;
(b) Publish a report on health care costs and spending trends that includes:
(A) Factors impacting costs and spending; and
(B) Recommendations for strategies to improve the efficiency of the health care system; and
(c) For providers and payers for which health care cost growth in the previous calendar year exceeded the health care cost growth target:
(A) Analyze the cause for exceeding the health care cost growth target; and
(B) Require the provider or payer to develop and undertake a performance improvement plan.
(7)(a) The authority shall adopt by rule criteria for waiving the requirement for a provider or payer to undertake a performance improvement plan, if necessitated by unforeseen market conditions or other equitable factors.
(b) The authority shall collaborate with a provider or payer that is required to develop and undertake a performance improvement plan by:
(A) Providing a template for performance improvement plans, guidelines and a time frame for submission of the plan;
(B) Providing technical assistance such as webinars, office hours, consultation with technical assistance providers or staff, or other guidance; and
(C) Establishing a contact at the authority who can work with the provider or payer in developing the performance improvement plan.
(8) A performance improvement plan must:
(a) Identify key cost drivers and include concrete steps a provider or payer will take to address the cost drivers;
(b) Identify an appropriate time frame by which a provider or payer will reduce the cost drivers and be subject to an evaluation by the authority; and
(c) Have clear measurements of success.
(9) The authority shall adopt by rule criteria for imposing a financial penalty on any provider or payer that exceeds the cost growth target without reasonable cause in three out of five calendar years or on any provider or payer that does not participate in the program. The criteria must be based on the degree to which the provider or payer exceeded the target and other factors, including but not limited to:
(a) The size of the provider or payer organization;
(b) The good faith efforts of the provider or payer to address health care costs;
(c) The provider’s or payer’s cooperation with the authority or the department;
(d) Overlapping penalties that may be imposed for failing to meet the target, such as requirements relating to medical loss ratios; and
(e) A provider’s or payer’s overall performance in reducing cost across all markets served by the provider or payer. [2019 c.560 §2; 2021 c.51 §2]
Note: Section 7, chapter 51, Oregon Laws 2021, provides:
Sec. 7. A financial penalty described in ORS 442.386 (9), as amended by section 2 of this 2021 Act, may be imposed no earlier than January 1, 2026, for performance by a provider or payer in meeting cost growth targets during calendar years 2021 to 2025. [2021 c.51 §7]
Note: See note under 442.385.