The story of Trillium Community Health Plan should serve as a warning to Oregon of what can go wrong — all within the bounds of the law — when public funds, intended for the public good, are funneled through a for-profit company without adequate controls and accountability.
Trillium was launched about four years ago in Lane County, one of a number of coordinated care organizations that manage health services for low-income and disabled people through the state's version of Medicaid, the Oregon Health Plan.
When Trillium's parent company, Agate Resources, was sold to a Fortune 500 company, Centene Corp., last year for $109 million, it raised eyebrows, questions and a whole lot of concerns.
Chief among these was whether Agate's owners — who included prominent local business people and physicians — were reaping hefty profits at the expense of almost 100,000 poor and disabled Lane County residents in need of health care.
An investigation by reporter Sherri Buri-McDonald has determined that Trillium patients were suffering from a lack of health care services at a time when Trillium's owners were socking away millions of dollars in cash reserves, an attraction for anyone interested in buying the company.
Meanwhile, patients were complaining of problems getting a primary care provider and needed services such as medical tests, therapy and referrals to specialists, such as mental health providers. Some were ending up in local emergency rooms for treatment — the poorest choice from both a financial and continuing care perspective.
Trillium's owners have said they were beefing up cash reserves to meet state standards and to protect against increased costs from a surge of new patients. But taxpayers and Medicaid patients have no way of knowing if this is accurate; state regulators won't discuss it.
In addition to the money being funneled into cash reserves, shareholders in the parent company also awarded themselves dividends totaling $22 million shortly before the sale of Agate to Centene.
All of this was acceptable under state regulations, which put no limits on how much profit a CCO could make — or how little could be spent on patient care.
That is changing as of this year — CCOs will now be required to spend at least 80 percent of the Medicaid money they receive on actual health care for the patients, increasing to 85 percent in 2018, but the remainder can be spend on pretty much whatever the CCO wants, including dividends to the owners.
Nor are there any severe penalties — such as cancellation of a contract — for a CCO that doesn't meet the state's benchmarks for the services it provides. Instead the state provides financial incentives to encourage CCOs to improve their performance, incentives they can collect even if they still end up below the state's benchmarks for patient care.
This handful of changes still leaves far too little oversight and accountability for Oregon's CCOs — and not enough protection for the people who rely on them for health care and for the taxpayers who foot the bill.
We previously have suggested a cap on profits for CCOs in Oregon as one option. State Rep. Mitch Greenlick, D-Portland, takes it a step further, arguing CCOs should be nonprofits. This is an idea worth exploring, as is his proposal that CCOs' cash reserves be deposited in the state treasury.
CCOs were well-intended, and their problems are most likely fixable. But they must be fixed to provide more accountability and controls. There is too much taxpayer money at stake and, more importantly, the health and well-being of too many vulnerable Oregonians.