QuickTake:

The Lane County Board of Commissioners approved a letter to Oregon Health Authority Director Sejal Hathi that warns of deep potential problems in the health care system with PacificSource exiting the Medicaid program in the county. The county reached out in August to the state about the issue and continues to have concerns, the letter said. 

Lane County officials are warning the Oregon Health Authority that the region’s health care system can no longer withstand losses with the anticipated departure of PacificSource from the state’s Medicaid program in the county. 

Lane County commissioners Tuesday approved a letter to Oregon Health Authority Director Sejal Hathi that outlines concerns about what will happen after PacificSource leaves the county’s Medicaid program. PacificSource, a coordinated care organization, contracts with the Oregon Health Authority and connects Medicaid patients with its network of providers for medical, dental and behavioral health care services.

PacificSource is one of two coordinated care organizations, known as CCOs, that serves Lane County residents on Medicaid. But PacificSource enrolls most of them: more than 90,000 people. Trillium, the other CCO for the region, enrolls about 30,000 county residents. Overall, about one in three county residents relies upon Medicaid, which provides health coverage for low-income households. 

One-fourth of the county’s population relies upon PacificSource, which is no longer on track to continue providing Medicaid coverage for Lane County residents in 2026, citing rising costs and losses. 

It’s a development that has county officials concerned. PacificSource’s rates have been a “stabilizing force” for providers that serve people on Medicaid, the letter said. And PacificSource’s exit is happening against a backdrop of wider turmoil: Providers have exited Oregon Medical Group, and poor operating performance at McKenzie-Willamette Medical Center sparked complete leadership turnover, the letter said. 

“The providers in Lane County are operating on the edge; many of us have been deficit spending to try and assure primary care access remains available in our community,” the letter said. “Our ability to sustain these losses, however, has come to an end. This is occurring at a time we are looking at further erosion of our budgets due to the likely loss of PacificSource in our community.”

In the letter, county officials expressed skepticism about the ability of Trillium to take over PacificSource’s workload. 

“Lane County is also deeply concerned that Trillium does not have an adequate provider network to take on 90,000 additional lives as of January 1st,” the letter said. “We need immediate and frequent communication from (Oregon Health Authority) on the plans for CCO coverage in Lane County, and we need to be included in the decision-making for those plans.”

Trillium spokesperson Courtney Johnston previously told Lookout Eugene-Springfield that Trillium — which currently has more than 30,000 members in Lane County — has the capacity to absorb 90,000 patients but is still working with OHA on whether that will happen.

The county urged the state to make investments in primary care, which can keep costs down and keep Lane County involved. 

“We have said from the beginning that CCOs will come and go, but we will remain,” the letter said. “We must be involved in creating the solutions, not just on the receiving end of the decisions.”

After the vote and later in the meeting, Commissioner Pat Farr said he was concerned about that wording in the letter, noting that it contradicts a statement the company has made: that it can handle the additional people. 

Farr said it’s important that wording is accurate, and county staff said they’d check into the matter.

While the PacificSource issue has emerged publicly only recently, county leaders reached out to the health authority in August, when officials became aware that PacificSource might not renew its contract for 2026, the letter said. 

It’s unclear how long state-level officials have known about the issue. The Oregon Health Authority declined to make agency staff available for interviews about PacificSource and the state’s work moving forward. 

A spokesperson for Gov. Tina Kotek’s office has previously said the governor’s staff is staying informed about the issue but declined to answer a question about what date the governor’s office found out PacificSource may not continue to serve Lane County residents.

This story has been updated to correct the spelling of Courtney Johnston’s name.

Ben Botkin covers politics and policy in Lane County. He has worked as a journalist since 2003, most recently at the Oregon Capital Chronicle, where he covered justice, health and human services and documented regional efforts to combat fentanyl addiction. Botkin has worked in statehouses in Idaho, Nevada, Oklahoma and, of course, Oregon. When he's not working, you'll find him road tripping across the West, hiking or surfing along the Oregon Coast.