Eliminating Medicaid backlog will cost Oregon $4.3 million

SALEM — An intensive effort to shore up Oregon’s Medicaid enrollment records is expected to cost the state at least $4.3 million.

Participants in the Oregon Health Plan, Oregon’s Medicaid program, must have their eligibility for the plan verified annually in a process called redetermination.

Oregon had fallen behind on those annual redeterminations, and by late May had an estimated backlog of about 115,000 people whose eligibility for the Oregon Health Plan was in question.

State workers and contractors hired by the state spent months verifying whether those people were still eligible to receive Medicaid benefits, a project that concluded at the end of August.

Of the group of approximately 115,000, the state found that more than half were still eligible for the Oregon Health Plan.

However, 31,895 did not respond to the department’s inquiries and 22,937 were found to no longer qualify for the program; both groups were removed from the state’s Medicaid rolls.

The $4.3 million estimated cost includes a $1.05 million contract with auditing firm KPMG and $1.7 million in costs associated with limited-duration staff.

The Oregon Health Authority worked with three other private vendors, and used Oregon Department of Human Services employees and its own staff to handle the work.

According to an email from Interim OHA Director Pat Allen to two legislative offices, provided to the EO Media Group / Pamplin Media Group Capital Bureau on Monday, the outside vendors provided expertise in project management, “back up call center support,” and support for processing renewals.

This outsourcing allowed OHA staff who had more familiarity with the system to focus on more complex cases requiring redeterminations, according to Allen’s email.

Allen said that the cost breakdown he provided to Rep. Julie Parrish, R-Tualatin/West Linn, and Mike Carew, chief of staff to House Minority Leader Mike McLane, R-Powell Butte, on Friday evening was the best estimate his agency could presently provide.

Certain internal costs such as payroll will not be known until after the end of the fiscal quarter, Allen, the former director of the Oregon Department of Consumer and Business Services, said.

“In summary, this represents our best estimate at this point,” Allen wrote. “It will no doubt change somewhat, and we can provide a more detailed final accounting in November.”

The EO Media Group / Pamplin Media Group Capital Bureau inquired about the costs associated with reconciling the backlog earlier this summer, under the tenure of prior OHA Director Lynne Saxton, who resigned at the end of August in the wake of a public relations scandal.

While at the time, OHA did provide some information about private vendors brought on to help with the project, public relations officials at the agency declined to provide more specific information about the internal personnel costs associated with the project, saying only that those costs were within the agency’s approved budget.

The approximately $4.3 million in costs pale in comparison, though, to the overall financial challenges Oregon government has faced in implementing the Affordable Care Act, which allowed states to raise the income threshold for Medicaid.

While hundreds of thousands of Oregonians gained coverage under the ACA, with the federal government footing most of the bill, Oregon government projects related to the expansion have faced setbacks.

Cover Oregon, an ambitious state-run health care exchange, failed to come to fruition, costing taxpayers about $300 million.

An ongoing state IT project to integrate eligibility systems for various social safety net programs in Oregon, including OHP, is estimated to cost $241.7 million, according to documents produced by the nonpartisan Legislative Fiscal Office.

A portion of that is expected to be covered by the federal government. The project’s progress is being monitored by the Legislature and is expected to be complete by June of 2019.