The Oregon Health Authority will soon start the process to search for a new insurance provider for more than 90,000 low-income Lane County residents.
In a legislative hearing this week, OHA Policy Director Dan Baden said the state received a notice that PacificSource, a Springfield-based not-for-profit company, would not renew its contract to provide Medicaid coverage in Lane County for 2026.
The agency is now tasked with deciding whether to allow a new insurer to move in, or let the remaining company, Trillium Community Health, take over health coverage for low-income residents.
Baden said the state is waiting for PacificSource to submit a transition plan for Lane County. The agency will then have to decide if Trillium has the capacity to absorb PacificSource clients or if other companies should have an opportunity.
He said once a company is chosen as a Medicaid provider, also known as a coordinated care organization or CCO, the state will have to roll out the plan far more quickly than in the past.
“We had six months after we determined who the CCO (Coordinated Care Organization) was before it went live. We will not have that luxury this time," he told lawmakers.
In an email to KLCC, OHA said PacificSource’s contract with the state required it to continue to serve Lane County residents while the agency looked for a new insurer.
OHA said current PacificSource Oregon Health Plan members do not need to do anything right now to keep their coverage and the agency plans to communicate any changes.
County commissioners express concerns
In a letter this week, Lane County commissioners asked to be included in any decisions – saying PacificSource’s departure could make the region’s already precarious health access challenges worse. They also raised concerns about Trillium’s capacity to serve PacificSource’s 90,000 clients.
After voting to send the letter, Commissioner Pat Farr said he was concerned it may have been unfair, or inaccurate, pointing to the company’s long track-record in Lane County.
The county’s Director of Health and Human Services Eve Gray raised concerns about Trillium’s reimbursement rates at a meeting Sept. 23, saying the news that PacificSource may leave came too late in the negotiations with Trillium.
“That likely means we didn’t ask for enough,” Gray said. “We are not allowed to share what the payers pay us, but there is a disparity between the payers, and the loss of PacificSource in our community would have a further negative financial impact that is not of small significance for us.”
Many patients at Lane County’s community health centers are on Medicaid. The county’s health centers are already under significant financial strain caused by billing issues from a new electronic health records system and uncertain federal funding.
Another difference between the providers is their network elsewhere in the community. PeaceHealth is in Trillium’s network, but McKenzie Willamette, according to the hospital, is not. McKenzie Willamette and PeaceHealth both accept PacificSource OHP members.
Trillium serves about 30,000 Lane County residents and has been a CCO in Lane County—at one point the only CCO—since the state switched to its current model in 2012.
In a statement, Courtney Johnston, the Senior Director, Government Relations and Communications for Trillium, said the organization was committed to fostering strong partnerships with providers and supporting health.
“We remain committed to ensuring access to high-quality care for Oregon Health Plan members in Lane, Western Douglas, and Western Linn counties,” Johnston said. “Trillium is working with our community partners to provide care to an expanded Medicaid population in Lane County.”
PacificSource pulled most of its operations out of Washington state last year — citing corporate consolidation as a contributing factor. Lane County has seen its own troubles with consolidation with Oregon Medical Group’s acquisition by a subsidiary of the largest health insurer in the US, United Health Group.
Many organizations, including PacificSource, reported significant losses providing Medicaid and told OHA they had a lower tolerance for risk than previous years because of continuously rising costs.
In a statement Tuesday, PacificSource Vice President of Medicaid Programs Erin Fair Taylor said OHA and PacificSource could not come to an agreement before the state’s deadline.
“ Our priority has always been to provide Oregonians with access to high-quality care,” Fair Taylor said. “Unfortunately, after extensive discussions, it became clear that continuing participation under current terms would undermine our ability to effectively serve the people who rely on us and put the long-term sustainability of our organization at risk."
