State officials outline next steps as PacificSource ends Lane County Medicaid contract

Oregon Health Authority leaders discussed plans Tuesday, Sept. 30, to help more than 90,000 Lane County people who rely on Medicaid through PacificSource obtain new coverage. 

It’s a transition that creates uncertainty for one in four people in the county, who are enrolled in PacificSource Community Solutions. For enrollees, there is no clear answer yet on what comes next.

The health authority is no longer negotiating with PacificSource under its current contract as a coordinated care organization.

Such organizations, known as CCOs, manage medical, dental and behavioral care for people enrolled in Oregon Health Plan, the state’s Medicaid program. The state pays each CCO a fixed monthly rate per member. The amount the state pays varies among the 16 organizations.

Since August, the authority has adjusted those rates. In September, the authority set PacificSource’s Lane County payment at $582.05 per member per month — nearly 13% higher than last year.

PacificSource leaders said the increase does not cover costs. The Springfield-based insurer, which serves as a CCO in nine counties, reported a $68.5 million loss from providing services not reimbursed by the state. That’s more than twice the losses any other CCO incurred in the same period, according to annual financial statements the organizations are required to file with the state.

When comparing the 2026 rate with projected costs, PacificSource found it would experience a shortfall in Lane County that the nonprofit at large could not afford, spokesperson Lauren Thompson said. On Sept. 18, the company filed notice it will not renew its Lane County contract but will continue serving Oregon Health Plan members in its other eight counties. 

Since PacificSource’s withdrawal from Lane County, the Oregon Health Authority has promised members they will not face immediate disruptions. But the agency has offered little detail about what happens after Jan. 1.

During a Tuesday house committee on health care briefing, the health authority’s Deputy Director for Policy and Programs Dave Baden told elected officials that they don’t know the exact changes coming for Oregon Health Plan members, but he outlined some next steps in accordance with Oregon law.

“First and foremost, the next step is around coverage and assurances that there is as little network change that there can be,” he said.

Lookout Eugene-Springfield requested an interview with the Oregon Health Authority to clarify Baden’s presentation, particularly for clarity on a slide stating the agency’s goal is to “minimize member disruption.”

The communications team declined to make anyone available for an interview but wrote in an email that “Lane County will have continued Medicaid coverage in 2026.” 

In his presentation, Baden gave some details about a process to ensure coverage.   

First, Oregon law requires the authority to first decide whether one coordinated care organization can serve the region. If so, members would be directed to that CCO — in Lane County’s case, Trillium. Spokesperson Courtney Johnston said 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 the health authority on whether that will happen.

If the authority decides two CCOs are needed, it must announce an opening, read through letters of intent, and then review applicants’ ability to serve Lane County. PacificSource could reapply to serve Lane County, according to the authority, but has not indicated it plans to do so.

Baden was not clear on whether rates could change during the development of a new CCO contract.

Meanwhile, the health authority has asked PacificSource to submit a transition plan. If no new provider is secured, the agency can order PacificSource to continue services for another 90 days after the plan is complete. 

The health authority did not provide a timeline for transition plans.

Historically, the Oregon Health Authority has had six months between identifying a CCO and implementing their coverage, Baden said. 

“We will not have that luxury this time,” he said.

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

—Ben Botkin and Elon Glucklich contributed to this report.