Oregon Implements Plan Using Prioritized List of Medical Services

March 1, 1996
Volume 5, Issue 3

SEATTLE--In the 1970s, Hawaii led the way in state efforts at controlling health-care costs while expanding coverage; in the 1980s, physicians and insurers in California forged ahead with managed care; and in the 1990s, Oregon has led the way in prioritizing health services to provide greater access to care.

SEATTLE--In the 1970s, Hawaii led the way in state efforts atcontrolling health-care costs while expanding coverage; in the1980s, physicians and insurers in California forged ahead withmanaged care; and in the 1990s, Oregon has led the way in prioritizinghealth services to provide greater access to care.

Physicians at the American Society of Hematology meeting heardfrom a panel of experts involved in the Oregon initiative at aforum on hematology practice.

Bill Gregory, who headed the commission that devised the prioritysystem for the Oregon plan, said that the key to success was theopenness of the process of developing the prioritized list.

Earlier, in 1987, he said, legislation that defunded some Medicaidoptions, including transplants, was passed without a full airingbefore the public. When the state refused to pay for a transplantfor a child dying with leukemia, the public outcry forced a reconsiderationof the way the state provided health care.

To avoid such public relations fiascoes, Mr. Gregory's commissonstrove to get a wide range of input through public hearings, meetings,and telephone surveys, as well as from physicians working in morethan 50 different specialties and subspecialties.

The diversity of the commission, which included physicians, socialworkers, a public health nurse, and consumers, also ensured thatthe list would be a true consensus. "There was no individualagenda on the part of the commission, and we weren't subjectedto lobbying by outside forces," he said.

When appointed to chair the commission, Mr. Gregory, a CPA, foresawa rapid process, using computerized data--until he realized thatthe necessary data on the cost-effectiveness of medical treatmentsdid not, for the most part, exist.

He termed as "disastrous" the first list, which perhapsrelied too heavily on a simplified computerized ranking basedon costs divided by benefits. "The computer put diaper rashas a top health concern," Mr. Gregory said.

The commission then turned to alternative methodologies and cameup with 17 categories of services, with rankings based on valueto the individual and to society. Condition-treatment pairs (basedon ICD-9 diagnostic codes combined with CPT-4 treatment codes)were developed and assigned to the appropriate categories.

The federal waiver needed to implement the plan was not grantedinitially, due, in large part, to concerns that the list violatedthe Americans with Disabilities Act (ADA). Aspects of the listwere said to presume that the value of life of a person with adisability is less than that of a person without a disability.Although discouraged, the commission went back to work to revisethe list along these new guidelines.

How the Plan Was Implemented

In retrospect, the first rejection may have been a blessing indisguise in that it allowed time to fully prepare the public andthe medical community for implementation of the plan, said JohnBussman, MD, medical director of the Oregon Medical AssistanceProgram (OMAP), as the plan is called.

Initially, he said, the prioritized list of 745 condition/treatmentpairs was funded down to line 606. When problems arose, "wewere able to deal with them, either through the staff or throughdiscussions with the commission."

An example of an early problem, he said, was the exclusion ofasymptomatic hernias, which the public found unacceptable. TheCommission revised the list to cover hernias for children up toage 18, while adult asymptomatic hernias remain, at present, "belowthe line."

Dr. Bussman said that OMAP is protected from political pressures."We have been given authority to make decisions and to sayno. I've had calls from state legislators wanting us to make exceptionsto the priority list for patients in their district, and I tellthem, I cannot make an exception and neither can the governor."

An important part of the program was to get the state's Medicaidpatients into managed care plans, and a key to the success ofthis was a ban on marketing. "All the enrollment was donethrough a contract with an organization that provided unbiasedhealth choice counseling," he said.

To assess the care provided by these managed care plans, the programis gathering "encounter data," the managed care counterpartof claims data in the fee-for-service environment. "We nowhave about 2 million encounters reported and are beginning toanalyze those data," he said.

Other safeguards include requirements for an Exceptional NeedsCare Coordinator for each managed care plan, internal and externalquality assurance mechanisms, and review of disenrollments tomake sure that plans are not finding excuses to disenroll high-costcases. He added that most managed care plans have "stop loss"insurance to handle cases requiring very costly long-term treatmentssuch as hemophilia.

Hematology and the List

How did hematology fare in the Oregon plan? Dr. Bussman gave thefollowing run down: the medical and radiologic treatment of Hodgkin'sdisease: line 24; thrombocytopenia: line 40; hemolytic anemia,line 113; medical treatment of leukemias, lines 114 and 115 (withdifferent lines depending on the type of leukemia, childhood vsadult, for example); bone marrow transplants: lines 116 to 119;sickle cell anemia: line 174.

"All of these are very well protected. We will never raisethe cutoff to anything approaching those numbers," Dr. Bussmansaid, adding that the legislature, in their last session, raisedthe cut off for funding by 21 lines, from line 606 to 585.

Below that line are conditions considered to be cosmetic, self-limited,or futile, and, he noted, a large number of so-called futile conditionsfall into the area of hematology. "But all of these patientsreceive something that they never had access to before, and thatis terminal comfort care and hospice care."

When asked about coverage of rare diseases, Dr. Bussman said that"every condition described in the ICD-9 diagnostic code isincluded at some place on the list. And we are constantly updatingthe list if we find gaps in the system."

He did note, however, that the ICD-9 codes may be out of date."Some patients, particularly with hematologic disease, haveeither a much better or worse prognosis than the code would indicate."

He also pointed out that OMAP is more liberal with regard to transplantsthan are some of the commercial managed care plans in which Medicaidpatients are enrolled.

Impact on Hematologists

The problems individual physicians have had with the program havebeen primarily administrative, said David Regan, MD, presidentof the Oregon Society of Medical Oncology.

The physician's office must make sure that OMAP members have up-to-datecards to ensure payment. "I have had people tell me thatit is too hard to keep track of OMAP patients, but it's just amatter of getting your office disciplined to check cards,"he said.

Dr. Regan stressed that the fees paid by OMAP are comparable tothose paid for patients in HMOs. "Physicians are generallysatisfied with the fee schedules," he said. "Certainly,the fees are far better than what they were getting for the Medicaidpopulation before the program was implemented."

He explained that the program allows for the inclusion of newtreatments and technologies. The Oregon Health Commission assessesnew technologies, such as interleukin therapies, he said, andpractitioners are given a period to respond to the commission'sdecisions.

The original priority list did not fund treatment for cancersthat had 5-year survival of 15% or less. "That was worrisomebecause it included a large number of diseases and failed to valuelong-term remissions," he said.

This has since been revised to exclude only those cancers witha 5% 5-year survival and applies only to treatments with curativeintent. Thus, for example, a patient with extensive small-celllung cancer, whose 5-year survival is virtually zero, could receivechemotherapy with the intent to extend life, not cure the disease.

Dr. Regan advised physicians to become involved in planning forprograms in their states. "People in other states who areconsidered ineligible for medical assistance still get cared forat the expense of the people who live in the state," he said."So not having a plan doesn't mean you're not paying forit."

Rationing By Any Other Name ...

The Oregon Medical Assistance Program has been criticized for"rationing" health care by its use of a prioritizedlist of medical services that will be covered. But Dr. John Bussman,speaking at a forum at the ASH meeting (see story above), pointedout that all current health-care provider plans use some formof rationing, albeit under different names.

Medicare rations with "deductions, exclusions, copayments,and fee schedules," he said. Insurers like Blue Cross rationby exclusions. "Most of them have very little provision forpreventive services or pre-existing conditions." HMOs rationby contract, exclusions, copay-ments, inconvenience, gatekeepers,prior authorizations, and concurrent review.

Even families ration health care, he said. "If it's a matterof paying the rent or paying the doctor, the doctor visit maybe postponed."

Oregon is the first state to use a defined benefit package toration on the basis of what is covered rather than who is covered,he said. When budget cuts are necessary, the Oregon plan reducesthe medical ser-vices covered, not the number of people covered.