State Sought to Plant Negative Stories About Nonprofit

Oregon Health Authority planned to use media to dissuade lawmakers from passing legislation sought by Portland-area FamilyCare over health care rate dispute.

Nick Budnick

Portland Tribune

 

The government-funded public relations plan to demean a Portland-area healthcare nonprofit sounds like a toned-down mish mash of the TV series “House of Cards” and “Mad Men,” but with an Oregon twist.

Among the plan’s elements: Find an HIV patient to complain about lack of care at the nonprofit FamilyCare, Inc., and connect them off-the-record with a reporter, perhaps at Willamette Week. Get reporters to write about FamilyCare and “look for opportunities to hurt their credibility in the news.” Portray the nonprofit as “more concerned with the bottom line and increasing revenues than the health of Oregonians.”

And the spin doctors tasked with doing all this? Communications staff at the Oregon Health Authority, the state agency overseeing Medicaid. The communications plan, released in response to a public records appeal by the Portland Tribune, was forwarded between OHA’s head of lobbying, BethAnne Darby, OHA Director Lynne Saxton and others in January as a means to influence the 2017 Oregon Legislature. The plan was prepared as FamilyCare and the state were doing battle in court over whether OHA is giving FamilyCare a fair rate of reimbursement for its care of low-income Medicaid patients. FamilyCare is one of 16 coordinated care organizations, or CCOs, set up by state reforms to act much like insurance plans or HMOs to provide low-income patients with health care under the Oregon Health Plan. FamilyCare been the most vocal CCO, often accusing state officials of incompetence or seeking to do the nonprofit harm, including in the pending litigation. The company’s critics call it excessively combative and its CEO, Jeff Heatherington, prone to hyperbole.

Asked about the plan and related documents, Oregon Health Authority spokesman Robb Cowie wrote in an email that they were intended to “sketch out a range of outreach options and messages we explored to counter FamilyCare’s aggressive and often incorrect public statements. They were never formally reviewed or approved, or fully implemented.”

In a Feb. 18 email, however, Saxton signaled her approval of the most aggressive draft of the plan released by OHA, saying she’d read it and there were some new developments that “will build on the already good start you have outlined.”

State approach unusual

To some extent, the plan is simply a measure of how bitter the litigation between FamilyCare and the state has become. And some aspects of the plan are standard stuff, such as correcting any “allegations and distortions” issued by FamilyCare through “prompt, informal communication with key media.”

But the parts setting out detailed plans to plant negative stories about FamilyCare while disguising OHA’s role in the coverage count as highly unusual behavior, according to several current and former government communications staff interviewed by the Portland Tribune. It puts the state of Oregon and Gov. Kate Brown’s administration in a role of trying to demean a contractor that — in theory, at least — OHA is supposed to be cooperating with to help low-income people.

Brown’s office did not respond to emails and voicemails requesting comment Thursday and Friday.

Prepared in response to the litigation, the plan was intended to influence and persuade lawmakers to stay out of the legal dispute and not pass any bills supported by FamilyCare to seek modifications of the state rate process, the documents show. OHA succeeded in this regard, and a FamilyCare bill died in committee.

But not everyone thinks trashing FamilyCare was a productive approach. For instance, the state communications plan plan talks about working with lobbyists from other groups to spread negative stories — while, in contrast, praising Health Share of Oregon, another organization that, like FamilyCare, is part of the Oregon Health Plan and covers the greater Portland region as FamilyCare does.

If the state had come to Health Share with this plan, the CCO would have declined to collaborate in “disparaging” FamilyCare, said Janet Meyer, Chief Executive Officer of Health Share. She said “job one” in health care is taking care of patients, and demeaning those doing it “is not helpful.”

The plan was initially withheld by the Oregon Health Authority, but the Tribune in early July disclosed an email from January of this year talking about the gist of the plan — to “create enough information buzz” in the Legislature to dissuade lawmakers from supporting FamilyCare legislation, wrote Darby, OHA’s director of external relations. The Tribune article included the response of Sen. Laurie Monnes Anderson, D-Gresham, who called OHA’s approach “totally out of line.”

Concern was “reputation”

The Senator’s comment alluded to the fact that lawmakers in Oregon typically want agencies to be neutral parties that do not try to manipulate the Legislature, and instead provide objective information.

The plan and related documents talk about the high stakes involved for OHA leaders: the need for OHA to “maintain” its “reputation,” which otherwise would be “at risk” if FamilyCare succeeded in passing legislation.

The documents also show how OHA planned to hide its efforts to disparage FamilyCare by using third parties as intermediaries to maintain an appearance of neutrality.

The plan said to “identify key legislators to target and get background information and data to them as soon as possible. Then use those legislators and/or other lobbyist to pitch stories to news media if possible so that OHA can staff neutral.” By “staff” OHA seems to have meant “stay.”

The documents show that OHA called for portraying in negative light how FamilyCare pays physicians a higher rate for primary care visits than required by Medicaid. “Showcase that Family Care is outlier in taking advantage of taxpayer money to give more funding to providers,” the plan said.

FamilyCare has portrayed the higher reimbursements as a way to ensure patients can get appointments — a common issue for Medicaid patients — and use primary care visits to focus on prevention, to save money for the system in the long run.

Rep. Mitch Greenlick, D-Portland, in June defended the agency’s desire to adopt an aggressive communications plan against FamilyCare. But as far as FamilyCare’s approach on primary care reimbursements, the lawmaker called it “a great idea,” saying “they keep getting penalized for it” by OHA. Added Greenlick of FamilyCare officials’ criticisms of OHA, “I think they had some valid complaints.”

Tactics display ignorance

The OHA tactics were either misleading or based on ignorance regarding another aspect of the plan as well, interviews and records show.

The OHA document calls for portraying FamilyCare as an “outlier and only worried about its profit margins.”

While its critics agree the group has been hyper-aggressive in defending its rates, it’s also true the entire CCO system overseen by OHA has been subject to similar criticisms of being highly money-focused, that providers are able to earn too much, and that state reforms have not done enough to eliminate wasteful incentives and change how care is provided.

The widely known reality is that pretty much all the CCOs, not just FamilyCare, enjoyed massive profits in the first couple of years of Oregon’s Medicaid reforms, according to documents and current and former healthcare officials not affiliated with FamilyCare.

What makes FamilyCare much more vulnerable to attack than other CCOs on profits is that FamilyCare has a relatively simple corporate structure, making its margins easy to discern. In contrast, profits at other CCOs are not as visible because of how payments are moved around between different subsidiaries, records show.

That said, FamilyCare has enjoyed rapid growth and been characterized by the state as having a healthier population of members, causing the CCO to receive a lower reimbursement rate from the state. It’s that rate that FamilyCare is complaining about in court.

It’s also true that the provider network of Health Share, which is essentially a partnership between Providence, Legacy, Kaiser Permanente and other health systems, is viewed by some in health care as better equipped to deal with patients with significant needs than is FamilyCare.

That perception is what the health authority sought to highlight by finding an HIV patient or other Oregon Health Plan member with “high cost medical issues” to complain to the media about lack of care at FamilyCare.

Willamette Week never published such an article. But while the Oregon Health Authority’s Darby claims the plan was merely a draft “brain dump” and was not implemented, in reality the agency has released statements portraying FamilyCare as prioritizing profits over people.

Following the Tribune’s successful records appeal of OHA’s earlier refusal to release the documents, drafts of the OHA communications plan have been shared with other media outlets. An Oregon medical news website, The Lund Report, on Wednesday reported on an earlier draft of the plan, noting that “The Portland Business Journal, Willamette Week, Portland Tribune, Oregon Public Broadcasting, Oregonian and The Lund Report have all received targeted press releases aimed at bolstering the state’s case, as well as personalized emails to journalists and other outreach.”

In light of the documents, Heatherington, the FamilyCare CEO, said the firm is exploring its legal options.