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The insurer's “transition plan” outlines how it will handle the nearly 90,000 Oregon Health Plan enrollees that it currently serves when its contract as a coordinated care organization in Lane County expires at the end of the year.
This story was updated Oct. 15 to include a statement from Oregon Health Authority.
In a plan submitted to the Oregon Health Authority, PacificSource outlines a strategy focused on “maintaining continuity of care” for nearly 90,000 Medicaid members in Lane County, people PacificSource will no longer serve when its contract expires Jan. 1.
The plan marks a major step in the Springfield-based insurer’s exit from Lane County as a coordinated care organization, known as a CCO. PacificSource has managed care for Oregon Health Plan members since 2020, but it did not renew its CCO contract for 2026.
Lookout Eugene-Springfield obtained a copy of the 10-page “transition plan” through a public records request.
Filed Sept. 30 and signed by Erin Fair Taylor, PacificSource’s vice president of Medicaid, the plan asks to “begin the work necessary to safely transition impact members.” It maintains it can support this transition but also emphasized factors outside of the company’s control.
The plan addresses several facets of the transition: prioritizing members with high-risk conditions, notifying members and providers about the change, awaiting Oregon Health Authority’s next steps, and discussing limitations as the company reduces its workforce.
Members with high-risk conditions
PacificSource will use a process called “risk stratification,” which categorizes members and their health conditions as high, moderate, low or no risk, or rising risk.
Members identified as high risk or rising risk will be prioritized during the transition, to ensure their care is not disrupted. That includes people undergoing dialysis or cancer treatment; pre- and post-transplant recipients; those receiving post-operative or post-discharge care; current or recent inpatients; and those on prescribed medications that cannot be interrupted.
This prioritization supports coordination of health care records among administrators, and the incoming coordinated care organization that will succeed PacificSource Community Solutions.
The Oregon Health Authority must determine whether a single coordinated care organization can serve the region. If so, members would move to the other existing CCO in Lane County: Trillium, which has about 30,000 members.
If the authority decides two coordinated care organizations are needed, it must announce an opening, review letters of intent, and evaluate applicants’ ability to serve the county. PacificSource could reapply but has not said whether it will.
Notifying members, providers
Much of PacificSource’s communication to members depends on identifying the incoming coordinated care organization. Concerned about causing confusion without that information, PacificSource says it is not practical to send notices until the next steps are clear.
The company is working with the Oregon Health Authority to draft and distribute member notices, according to the plan. The details will vary depending on whether the new CCO can coordinate providers in or out of the network and will outline what, if any, action members need to take. When notices are sent, they will include websites and phone numbers where members can get help with questions or concerns.
Similarly, PacificSource is waiting on the health authority to identify a new CCO before communicating with providers.
Oregon Health Authority’s next steps
In addition to identifying a new CCO, a transitional period for out-of-network services will be established. This will allow for providers who do not participate in a new CCO to honor services that PacificSource authorized until members can be safely transition to an in-network provider.
If a new provider is needed, but hasn’t been secured by the new year, the agency can order PacificSource to continue services for another 90 days, once the health authority approves its transition plan.
No formal agreement has been reached with PacificSource on its transition plan, said Oregon Health Authority (OHA) spokesperson Amy Bacher. It is not publicly known where the authority is in identifying a new CCO.
“OHA has been in close contact with and meeting regularly with CCOs, legislators and community partners throughout this process to discuss all of the options available. We’ve also been working on plans for community engagement, provider and partner communications when there are more details to share. OHA is moving with urgency and care, recognizing the impact this has on people’s lives,” Bacher said in a statement.
PacificSource reinforced that it can do a “seamless transition” but warns “any gaps in the transition plan stem from uncertainties regarding the specifics of member transitions, timelines, coordination parties — factors outside of PacificSource’s direct control.”
Workforce reductions
PacificSource is preparing for workforce reductions as a “result of diminished revenue from its Lane CCO contract,” according to the plan.
However, the workforce reduction strategy incorporates runout requirements — the period after a contract ends when PacificSource must still pay bills and handle claims for care provided earlier — and may be implemented in phases to ensure the company meets its obligations before and after the contract expires.
PacificSource has cited financial losses and the rising cost of care as reasons for not renewing its contract. The company reported a $68.5 million loss from providing services that were not reimbursed by the state — more than twice the losses of any other coordinated care organization during the same period, according to annual financial statements the organizations are required to file with the state.
— Ben Botkin contributed to this report.
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