This week, Oregon health regulators criticized three healthcare groups for excessively raising the expense of healthcare for Oregonians.
As part of a regulatory effort to control the escalating costs of health care, the state in 2021 put a cap on the annual spending rise for health care organizations at 3.4% per person. The program was established by the Oregon Legislature in 2019, and the statute was revised in 2021.
Three institutions were cited by the Oregon Health Authority on Wednesday for exceeding this cap between 2021 and 2022 without providing an explanation for the increase. Among them are two insurers that operated Medicare Advantage plans, Moda Health and UnitedHealthcare, as well as Eugene-based Oregon Medical Group.
According to the authorities, 28 additional healthcare groups also exceeded this cap, although they did so for legitimate reasons.
The state accepted the providers’ and insurers’ arguments, which included increased Medicaid enrollment and use, longer hospital stays because of a shortage of experienced nurses, and the expansion of services like behavioral health.
Clare Pierce-Wrobel, the director of the health policy and analytics division of the Oregon Health Authority, said in a statement that the rising and unacceptable cost of health care is making quality care unaffordable for many working families and placing a burden on the budgets of the government and businesses that cover health insurance.
The state discovered that Oregon Medical Group, which owns a chain of clinics in the Eugene area, had a 6.5% increase in the cost of care for privately insured patients, which was almost double the state’s intended growth rate. In late 2020, Optum secretly acquired Oregon Medical Group. Many patients in Lane County were fired as a result of the departure of over 30 doctors from the group after the acquisition.
The same parent corporation that owns Optum, UnitedHealthcare, is another significant insurer mentioned by state health officials. UnitedHealthcare’s Medicare Advantage plans increased by 6.4%, according to the state.
Additionally, Moda Health, an insurance provider based in Portland, was cited by the state for raising their Medicare Advantage plan by 11.6% without cause. But in December 2024, Moda put a halt to the scheme.
While Moda Health’s commercial and Medicaid plans met the state’s cost growth criterion, the company’s Medicare Advantage programs did not, according to senior vice president and chief actuary Kraig Anderson.
As a result of COVID, Medicare Advantage plans across the board had surprisingly high utilization, Anderson said. More than any other single cause, this led to unsustainable premium hikes. Consequently, in 2025, we left the Medicare Advantage market.
Email requests for comment were not immediately answered by UnitedHealthcare or Optum.
The authorities stated that there will be no monetary fines for the warnings.
However, beginning in the upcoming year, companies whose cost rises surpass the cap without good cause are required to submit performance improvement plans outlining their strategies for lowering health care expenses. If businesses continue to fall short of the cost growth objective, the state will also begin imposing fines the next year.
–Kristine de Leon uncovers tales about data enterprise, small company, retail, and consumer health. [email protected] is her email address.
