Evaluation of the Oregon Medicaid Proposal

May 1992

OTA-H-531

NTIS order #PB93-116192
Recommended Citation:

U.S. Congress, Office of Technology Assessment, Evaluation of the Oregon Medicaid

Proposal, OTA-H-531 (Washington, DC: U.S. Government Printing Office, May 1992).

I ()] \cilcs h} the [1 S ( io~t.rnl]lcnl PIIfI(IIlg ot IICC

\upL$l Illtcll{lclll (It l)(lcumL’ Ill\, Nl,lll slop Ssol’, u Jdllllgt(m. I)( 20402” 9 3?s

I SBN 0-16 -038015-4
Foreword

As part of an eventual statewide set of health insurance reform measures, the State of

Oregon has proposed implementing a demonstration program, with Federal cofunding, that

would change the State’s existing Medicaid program in three fundamental ways. It would: 1)

expand coverage to include all persons with incomes up to 100 percent of the Federal poverty

level; 2) enroll all covered persons in some form of managed care, such as with a health

maintenance organization or a ‘‘gatekeeper’ primary care physician; and 3) determine acute

and primary health care benefits according to a ranked list of services, with actual benefits

dependent on the level of program funding.

Concern about the effects of Oregon’s Medicaid proposal on program recipients, and the

potential ramifications of the proposal for the ongoing national health care debate, prompted

Congress to ask the Office of Technology Assessment to examine the proposal in detail. This

report was prepared in response to a request from Representative John Dingell, chairman of

the House Committee on Energy and Commerce, and Representative Henry Waxman,

chairman of the House Subcommittee on Health and the Environment, The request for this

study was endorsed by Senator Al Gore, Chairman of the Senate Subcommittee on Science,

Technology, and Space, and by the Oregon delegation, including Senator Bob Packwood,

Senator Mark Hatfield, Representative Les AuCoin, Representative Peter DeFazio, Representative Mike Kopetski, Representative Ron Wyden, and Representative Robert F. (Bob) Smith.

Many individuals-both in favor of and opposed to the Oregon proposal-have urged

OTA to explicitly recommend whether the proposed demonstration should be approved or to

explicitly conduct a political analysis on the need for rationing health care services. We felt

that at least one organization examining the Oregon proposal should confine its examination

to technical critique and evaluation of potential consequences—both positive and negative--

of the proposed demonstration. This is the approach OTA took. We hope that the resulting

report will therefore be not only useful to the Congress and others as they look at the Oregon

plan but also relevant to States and other parties as they consider ways to reform the health

care system.

This OTA assessment was greatly assisted by an advisory panel, chaired by Lincoln

Moses, Professor of Statistics, Stanford University. In addition, a large number of individuals,

including many from the State of Oregon, provided information and reviewed drafts of the

report.

OTA gratefully acknowledges the contribution of each of these individuals. As with all

OTA reports, the final responsibility for the content of the assessment rests with OTA.

u JOHN H. GIBBONS

Director

,.. Ill
Office of Technology Assessment

Advisory Panel to the OTA Evaluation of Oregon’s Medicaid Proposal

Peter Budetti

Director

Center for Health Policy Research

George Washington University

Washington, DC

Alexander Capron

Co-Director

Pacific Center for Health Policy and

Ethics

University of Southern California

Los Angeles, CA

Judy Feder

Co-Director

Center for Health Policy Studies

Georgetown University School of

Medicine

Washington, DC

Daniel M. Fox

President

Milbank Memorial Fund

New York, NY

John Hornberger

Division of General Internal Medicine

Stanford University School of

Medicine

Palo Alto, CA

Robert Johnson

Director of Adolescent Medicine

Department of Pediatrics

New Jersey Medical School

Newark, NJ

Robert M. Kaplan

Professor and Acting Chief

Division of Health Care Sciences

Department of Community and Family

Medicine

University of California at San Diego

La Jolla, CA

Lincoln Moses, Panel Chair

Professor of Statistics

Stanford University

Palo Alto, CA

Richard Kronick

Adjunct Professor

Department of Community and

Family Medicine

University of California at San Diego

La Jolla, CA

Stephen H. Long

Senior Economist

RAND Corp.

Washington, DC

John Ludden

Medical Director

Harvard Community Health Plan

Brookline, MA

Maxwell J. Mehlman

Professor of Law and Director

of the Law-Medicine Center

School of Law

Case Western Reserve University

Cleveland, OH

James J. Mongan

Executive Director

Truman Medical Center

Kansas City, MO

Mary Ellen Mortensen

Assistant Professor

Division of Pharmacology and

Toxicology

Ohio State University

Columbus, OH

John Clark Nelson

Obstetrician/gynecologist

Salt Lake City, UT

Sara Rosenbaum

Senior Staff Research Scientist

George Washington University

Center for Health Policy

Research

Washington, DC

Judith Ross

Director of Social Work

The Metrohealth System

Cleveland, OH

Peter Slavin

Assistant Chief of Medicine

for Administration

Massachusetts General Hospital

Boston, MA

Vernon Smith

Director

Medical Services Administration

Department of Social Services

Lansing, MI

James Tallon, Jr.

Majority Leader

New York State Assembly

Albany, NY

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the advisory panel members.

The panel does not, however, necessarily approve, disapprove, or endorse this report. OTA assumes full responsibility for the

report and the accuracy of its contents.

iv
OTA Project Staff—Evaluation of the Oregon Medicaid Proposal

Roger C. Herdman, Assistant Director, OTA

Health and L&e Sciences Division

Clyde J. Behney, Health Program Manager

Project Staff

Elaine J. Power, Project Director

Jill Eden, Senior Analyst

Maria Hewitt, Senior Analyst

Dorit R. Opher, Research Assistant

Sarah Sa’adah, Research Assistantl

Leah Wolfe, Analyst

Other Contributing Staff

Diane Burnside Murdock, Contractor

Tim Henderson, Analyst2

David P. Reeker, Congressional Fellow3

Ken Schellhase, Intern4

Administrative Staff

Marian Grochowski, Office Administrator

Kelly Faulks, Secretary

Kim Holmlund, Word Processor Specialist

Eileen Murphy, P.C. Specialist

Contractors

David A. Asch and James Patton, Philadelphia, PA

Pony Ehrenhaft, Lake Oswego, OR

Angelo Giardino, Philadelphia, PA

Mark A. Schuster, Los Angeles, CA

Kenneth R. Wing, University of Puget Sound, Tacoma, WA

1 Until June 1991

2 Until July 1991

3 Until May 1991

‘$ Until August 1991
List of Acronyms

ADA — Age Discrimination Act of 1975

AFDC — Aid to Families with Dependent

Children

AFDC-UP — Aid to Families with Dependent

AHA

AIDS

ALS

CABG

CAD

CBO

CHC

CHD

COBRA

CPT-4

CT

DCO

DHHS

DRG

DSH

DTP

EPSDT

FCHP

FDA

FFS

FPL

FQHC

FY

GA

GAO

HCFA

HIV

H M O

HPV

HSC

Children-Unemployed Parent

— American Hospital Association

— acquired immune deficiency

syndrome

— amyotrophic lateral sclerosis

— coronary artery bypass graft

— coronary artery disease

— Congressional Budget Office (U.S.

Congress)

— community health center

— county health department

— Consolidated Omnibus Budget

Reconciliation Act

— Current Procedural Terminology,

4th Edition

— condition-treatment (pair)

— dental care organization

— U.S. Department of Health and

Human Services

— diagnosis-related group

— disproportionate-share hospital

— diptheria, tetanus, and pertussis

(combination vaccine)

— Early and Periodic Screening,

Diagnosis, and Treatment

— fully capitated health plan

— Food and Drug Administration

(Public Health Service)

— fee-for-service

— Federal poverty level

— federally qualified health center

— fiscal year

— general assistance (State of Oregon)

— General Accounting Office (U.S.

Congress)

— Health Care Financing

Administration (DHHS)

— human immunodeficiency virus

(AIDS virus)

— health maintenance organization

— human papillomavirus

— (Oregon) Health Services

IPA

MHC

NASBO

NGA

NICU

NMES

NP

OAH

OBRA

OHD

OHP

O M A

OMAP

OMPRO

OPCA

OSIP

OTA

PCCM

PCO

PHP

PLM

PTCA

QMB

QWB

RFA

RHC

SB 27

SIPP

SSA

SSI

USPSTF

— independent practice association

— institutional review board

— migrant health center

— National Association of State

Budget Officers

— National Governors Association

— neonatal intensive care unit

— National Medical Expenditure

Survey

— nurse practitioner

— Oregon Association of Hospitals

— Omnibus Budget Reconciliation Act

— Oregon Health Decisions

— Office of Health Policy (State of

Oregon)

— Oregon Medical Association

— Office of Medical Assistance

Programs (State of Oregon)

— Oregon Medical Peer Review

Organization

— Oregon Primary Care Association

— Oregon Supplemental Income

Program

— Office of Technology Assessment

(U.S. Congress)

— primary care case manager

— physician care organization

— prepaid health plan

— poverty level medical

— percutaneous transluminal

coronary angioplasty

— Qualified Medicare Beneficiaries

— Quality of Well Being (scale)

— request for application

— rural health clinic

— (Oregon) Senate Bill 27

— Survey of Income and Program

Participation

— Social Security Administration

(DHHS)

— Supplemental Security Income

(program) (Social Security

Administration)

— United States Preventive Services

Task Force

Commission

ICD-9-CM — International Classification of

Diseases, 9th Revision, Clinical

Modification

w“
Contents

Page

Chapter 1: Summary and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter 2: Context of the Oregon Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 3: The Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4: Implications for Health Care Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 5: Implications for Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 6: Demonstration Program Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 7: Federal Legal Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 8: Evaluation Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix A: Method of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix B: Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix C: Oregon’s Survey of Public Health-State Preferences . . . . . . . . . . . . . . . . . . . . . .

Appendix D: Prioritized Health Services List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appendix E: Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

39

81

119

157

175

193

201

203

205

235

306

317
Chapter 1

Summary and Conclusions
Contents

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SUMMARY OF FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Program Implications for Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Program Implications for Beneficiaries ● ....................****.......*......**. . 14

Program costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Other Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Boxes

Box Page

l-A. The Oregon Basic Health Services Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

l-B. Categories of Services Used in the Prioritization Process and Examples of

Condition-Treatment (CT) Pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

l-C. Medicaid Waivers Requested by the State of Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Figures

Figure Page

1-1. Oregon Health Services Commission’s Prioritization Process . . . . . . . . . . . . . . . . . . . . . 7

1-2. Distribution of Oregon Medicaid Enrollees by Type of Delivery System:

Current and Proposed Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Tables

Table Page

1-1. Demonstration Enrollment Projections ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1-2. Summary of Oregon’s Demonstration Cost Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

1-3. Examples of Condition-Treatment Pairs Excluded If Costs Were Underestimated

by 5 Percent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Chapter 1

Summary and Conclusions

INTRODUCTION

On August 16, 1991, Oregon petitioned the

Federal Government for permission to use Federal

funds in a novel health care financing program. The

proposed program is premised on two basic assumptions:

1.

2.

all uninsured poor people should have publicly

funded health care coverage, and

coverage for this population can be made

affordable to the taxpayers through a combination of two mechanisms: the explicit prioritization of health care services, and the delivery of

covered services through managed care systems.

Oregon’s plan to revamp its system of health care

coverage was motivated by the steadily increasing

costs of health care to the public treasury and the

large number of Oregonians who have no health

insurance. The State has estimated that between

400,000 and 450,000 Oregonians, or about 16 percent

of the State’s population, are uninsured (177).

To address this latter problem, the Oregon legislature passed the Oregon Basic Health Services Act in

1989, which established three mechanisms for

increasing access to health insurance (box l-A). For

individuals who could not qualify for private insurance due to a ‘‘preexisting health condition, ’ the

State established a high-risk insurance pool with

subsidized premiums. For individuals whose employers do not offer health insurance benefits, the

State established a program that provides incentives

for, and ultimately mandates, small businesses to

provide such insurance to their employees. And for

poor uninsured individuals, the Basic Health Services Act expanded the State Medicaid program to

cover all residents with incomes up to 100 percent of

the Federal poverty level (FPL).l

The last of these three measures has been the

subject of particular controversy (25,28,47,55,70,94,

115,300,308). In part, the controversy stems from

the need for the State to obtain permission from the

Federal Government to implement its proposal as

planned, since it wishes to receive Federal Medicaid

matching funding for the program. The proposal is

also controversial because of its explicit attention to

determining how unfunded care should be denied,

and because by design it encouraged public debate

regarding the relative importance of different health

care services (53,85,90,1 16,214,236,251).

Oregon’s proposal is to make a sweeping change

to its Medicaid program, the Federal/State funded,

State-administered health care program for the poor.

The proposed new program, if approved as it was

submitted to the Federal Government, would continue for 5 years. The program was originally

anticipated to begin by July 1, 1992, but the State

now expects that implementation may be delayed

because as of March 1992 the Federal Government

had not yet decided whether to grant the waiver.

Under the proposed program, the Medicaideligible population would be expanded to include all

legal State residents2 with incomes below the FPL.

In contrast, at present, most people in Oregon must

fall into a federally specified need category (e.g., be

eligible for the Aid to Families with Dependent

Children (AFDC) program) to qualify for Medicaid.

In addition, in most cases they must have incomes

much lower than the FPL to qualify. Oregon

residents who receive AFDC assistance, for example, generally must have incomes that are less than

50 percent of the FPL to be eligible for Medicaid.

According to the State of Oregon, the expansion

in eligibility under the proposal would add approximately 120,600 people to the Medicaid rolls by the

fifth year of the program. This number is predicted

to be somewhat smaller (96,400) if the related

employer-based health insurance mandate is in

effect (table l-l) (177).

Certain groups currently covered by the Oregon

Medicaid program would not initially be affected by

the proposed changes in the program. The waiver

proposal does not cover Medicaid eligibles who are

elderly, disabled, in institutions, in foster care, or in

the custody of the State, because these groups were

exempt from Oregon Senate Bill (SB) 27, the bill

1 For 1992, the Federal poverty level is $11,570 per year for a family of three.

2 und~~ented aliens do not qualify as legal residents and would not be eligible fOr the Progrm.

-3–
4 ● Evaluation of the Oregon Medicaid Proposal

Box 1-A—The Oregon Basic Health Services Act

The Oregon Basic Health Services Act of 1989 consists of three separate bills to expand access to health

insurance in the State. Each of the three bills targets a specific segment of the uninsured population.

The first bill, Senate Bill (SB) 27, expands the Oregon Medicaid program to include all legal residents with

incomes up to the Federal poverty level. It also changes dramatically the method of defining benefits for the

Medicaid population, greatly expands the use of prepaid managed care for this group, and makes other changes to

the State Medicaid plan. To implement these changes and continue receiving Federal Medicaid matching funds, the

State has proposed that its new plan be a Medicaid demonstration project, and it seeks Federal approval to carry

out this project.

The second bill of the act, SB 534, establishes a State high-risk insurance pool. This pool sells subsidized health

insurance to persons who are unable to purchase insurance on the market due to preexisting health conditions and

anticipated future high health care costs. The premium charge for policies from this insurance pool is not to exceed

150 percent of the cost of an average private health insurance premium. Program costs not covered by the collection

of premiums are financed through general State funds and through mandatory contributions by private insurers.

SB 935, the third bill of the act, addresses the problem of persons who are employed but have no

employer-based health insurance. This law encourages, and ultimately requires, employers to provide health

insurance to their employees that covers at least the level of services covered for the Medicaid population under SB

27. Businesses receive tax credits for providing insurance. They have the option of choosing private insurance plans

or purchasing insurance from a State fund created for that purpose. The minimum benefits that must be covered are

linked to the Medicaid benefits package. Employers who do not provide health insurance after 1994 will be required

to make mandatory contributions to the fired, but that provision is repealed if at least 150,000 previously uninsured

persons receive employer-based health insurance by January 1994.

Legislation passed in 1991 made some significant additions and changes to this three-part program. One

particularly significant statute (SB 44) requires that the Medicaid-eligible elderly, disabled, and individuals in foster

care or in the custody of the State be subject to the provisions of SB 27. These groups, originally exempt from the

sweeping changes in the Medicaid program, are now intended to be included in 1993. Because the waiver proposal

as submitted in August 1991 does not accommodate them, the State must submit an amendment to the waiver to

do so if the waiver is approved in its current form.

The Health Insurance Reform Act (SB 1076), also passed in 1991, establishes some limits and safeguards on

employer-based insurance. These limits would apply to the basic benefits package required under SB 935. The act

establishes rate categories and limits rate increases in small group plans, provides for guaranteed issue and

renewability of policies, and controls such factors as preexisting condition exclusions.

Finally, the Health Resources Commission Act of 1991 (SB 1077) “establishes a data and cost review

commission designed to contain statewide health care costs as the above insurance expansions occur. ”

SOURCE: OfIke of ‘lMmologyAssessment, 1992. Based on Oregon’s SB 27, SB 44, SB 534, SB 935, SB 1076, SB 1077; and Oregon waiver

application% August 1991.

authorizing the program changes. For the first year

of the new program, these groups would continue to

be eligible for all Medicaid benefits under the

current rules and would continue to receive the same

services as they would if the demonstration program

were not in place. However, the State plans to file an

amendment to the waiver permitting these groups to

be covered under the new program beginning in

October 1993 (177).3

Service deliver-y and payment would also change

under the new plan. Most of the population receiving

services under the demonstration program would be

enrolled in some form of managed care reimbursed

on a prepaid, per capita basis; the remainder would

receive services on a case-managed, fee-for-service

(FFS) basis. Payment to prepaid providers would no

longer be linked to Medicaid FFS payment rates.

Instead, payment rates to these providers would be

s me projWt~ ~teforfol~ ~ese ~ups into tie pro- is apparent.lyunchanged by the possibili~ tittie PXIWW, if approved, wouldp~b~ly

begin sometime after July 1992.
Chapter 1--Summary and Conclusions ● 5

Table l-l—Demonstration Enrollment Projectionsa

Without employer With employer

mandate mandate

Year of Current New Current New

demonstration eligibles eligibles eligibles eligibles

Year 1

(FY1993)b150,700 46,800’ 150,700 46,800

Year 2

(FY 1994) 156,000 81,100 156,000 81,100

Year 3

(FY 1995) 160,600 105,400 160,600 105,400

Year 4

(FY 1996) 165,400 120,000 159,600 96,000

Year 5

(FY 1997) 170,300 120,600 164,400 96,400

aEnrollrnent k expr~s~ as average monthly caseload. It is lower than the

actual number of eligibles who have benefits for some period of time during

the course of a year.

bhe Oregon State fiscal year begins in July.

W these new eligibles, 2,700 are currently covered under a State+nly

General Assistance (GA) program that covers the medically unemployable (unemployed for more than 60 days due to a medical condition).

Oregon’s general assistance program only covers outpatient care.

SOURCE: Oregon Department of Human Resources, Office of Medical

Assistance Programs, Salem, OR, The Oregon MdicaidDemonsfration Ww”ver App/i@fion, submitted to the Health Care

Financing Administration, Aug. 16, 1991.

based on the State’s estimates of the average

reasonable costs, across all providers, of rendering

the given covered services.

Finally, the covered services to which the Medicaideligible population is entitled would change. For all

Medicaid recipients subject to the program, the

benefit package would be determined by a prioritized list of health services in which health conditions and their treatments are listed by importance

from highest to lowest. The State legislature would

then determine its budget for the program, and a line

would be drawn where projected program costs

equal the budgeted amount. All conditions and

treatments at and above the line would then be

covered; conditions and treatments below the line

would not be covered. (Necessary diagnostic services are intended to be covered regardless of the

condition and are not prioritized on the list.)

The prioritized list of services is limited to

primary and acute health care services. Long-term

care services would not be covered by the proposal

and do not appear on the prioritized list; they would

remain a separately covered set of Medicaid services. Mental health and chemical dependency services would initially be excluded from the prioritized

list, but they are to be incorporated into the list in

October 1993. Until that time, any of the group of

Medicaid beneficiaries covered by the proposal,

including newly eligible groups, would receive these

services under current program rules.

Oregon has a 2-year budget cycle, and the State

legislature would vote anew biennially on the

threshold (i.e., the benefit package). An important

provision of SB 27 is that if the Medicaid program

should suffer a budget shortfall, the program may

not cut people out of the program or reduce provider

payments for covered services. Instead, the State

must either allocate additional funds to the program

or reduce covered services as necessary, with the

lowest-ranked services being eliminated frost.

Thus, as the program is designed, the benefit

package could either expand or contract every 2

years, depending on the budget. In addition,

benefits could be reduced in the middle of the

biennial cycle if funds prove inadequate to meet

projected costs. The need for Federal approval may

inhibit this intended flexibility. Oregon’s waiver

application states that it will seek an amendment to

the waiver if in fact benefits would change “significantly” during the 5 years of the program. Exactly

what the Federal Government would regard as

‘‘significant’ will not be known until (or unless) the

waiver is approved.

Concern about the effects of Oregon’s Medicaid

proposal on program recipients, and the potential

ramifications of the proposal for the ongoing national health care debate, prompted Congress to ask

the Office of Technology Assessment to examine the

proposal in detail.4 The report was prepared in

response to a request from Representative John

Dingell, Chairman of the House Committee on

Energy and Commerce, and Representative Henry

Waxman, Chairman of the House Subcommittee on

Health and the Environment. The request for the

OTA study was endorsed by Senator Al Gore,

Chairman of the Senate Subcommittee on Science,

Technology, and Space, and by the Oregon delegation, including Senator Bob Packwood, Senator

Mark Hatfield, Representative Les AuCoin, Representative Peter DeFazio, Representative Mike Ko4 Unless indicated otherwise, details of the proposal discussed within this summary are based on Oregon’s Office of Medical Assistance Programs’

August 16, 1991 waiver application (177).
6 ● Evaluation of the Oregon Medicaid Proposal

petski, Representative Ron Wyden, and Representative Robert F. (Bob) Smith.

The goals of this study are to describe and analyze

the specifics of the proposed program and to discuss

its most likely implications for the Federal Government, the State of Oregon, and Medicaid beneficiaries. The role of this report is not to critique the

existing Medicaid program in detail. Rather, it is to

examine the proposed program and especially its

relevance to issues of particular interest to the

Federal Government: the impact of the program on

Medicaid beneficiaries, in whom the Federal Government (as a copayer) has a fiduciary interest; and

the potential usefulness of Oregon’s program if

applied in other States and other contexts. The report

is organized as follows.

●

●

●

●

●

Chapter 2 briefly describes the context in

which the proposal was developed, particularly

the dilemmas facing the Medicaid program and

the barriers to providing health care coverage to

the uninsured.

Chapter 3 examines the method and assumptions used to derive the prioritized list of health

services upon which the proposed packaged of

covered services is based. It also describes

some of the characteristics of the list. It

addresses such questions as: What were the

most important determinants of ranking on the

final list? Do services for certain vulnerable

groups (e.g., pregnant women) rank high or

low? Is the list complete? Is it replicable by

others?

Chapter 4 examines the effects of the overall

proposal on Oregon health care providers.

Would particular kinds of providers be likely to

be advantaged or disadvantaged under the

program? Would providers be paid more or

less? Would they participate in the program?

Chapter 5 analyzes the program’s effect on new

and existing Medicaid program beneficiaries.

Would each of these groups have better or

worse access to health care services under the

proposal? Who would gain eligibility for services under the program, and who would lose it?

What benefits would existing Medicaid participants lose, and what would they gain?

Chapter 6 critiques the State’s estimate of the

costs of the proposed program? Are costs likely

to have been over- or underestimated? If so,

what are the implications for the Federal

Government?

●

●

The

Chapter 7 examines major legal issues that

might arise if the proposal were implemented as

planned. Does the proposal violate Federal

constitutional principles? Is it likely to conflict

with major existing Federal statutes enacted to

ensure equal access to services?

Chapter 8 briefly outlines some basic evaluation issues regarding the proposed program. As

a demonstration program, will it yield information valuable to other States and to the Federal

Government?

remainder of this chapter summarizes the

findings of the report and draws overall conclusions

regarding the technical merits of the proposal.

SUMMARY OF FINDINGS

The Prioritized List

Developing the List

The use of a prioritized list of health care services

as the basis on which to build a benefits package is

unique to Oregon’s Medicaid proposal. Other States

(e.g., Maine) have established priorities within

existing Medicaid services to determine which

optional categories of services shall be eliminated

first in the event that tight State budgets require cuts.

Only Oregon, however, has combined a detailed,

comprehensive list of primary and acute medical

care services with a public prioritization process to

build a package of benefits in an entirely new way.

Rather than eliminating types of services (e.g.,

prescription drugs, durable medical equipment)

from coverage if the budget requires cuts, as some

States have done, Oregon’s prioritized list would

eliminate specific treatments for specific conditions.

The building blocks of the list are conditiontreatment (CT) pairs. Each medical condition (e.g.,

appendicitis) is paired with one or more therapies

used to treat it (e.g., appendectomy). Many ‘‘treatments” are very broad (e.g., any medical therapy

used to treat the condition). Even so, some conditions appear more than once on the list paired with

different treatments; for example, medical therapy

for a particular condition might be located fairly

high on the list, while surgical therapy for the same

condition is ranked lower. The total prioritized list

includes 709 CT pairs, of which only the first 587

would be covered at the time the proposed demonstration project begins.
Chapter 1--Summary and Conclusions . 7

Figure 1-l-Oregon Health Services Commission’s Prioritization Process

7

Health care

values assessed

at community ——

meetings and

public hearings

CT pairs assigned to 1 of

17 service categories, and

HSC ranks the categories

v

HSC ranks CT pairs within

categories by net benefit

v

HSC uses judgment to

reorder selected CT pairs

on list

SOURCE: Office of Technology Assessment, 1991.

The list was compiled and prioritized by an

n-member Health Services Commission (HSC),

authorized in the Oregon Basic Health Services Act

and appointed by the Governor for this purpose. The

HSC’s charge was to compile “a list of health

services ranked by priority, from the most important

to the least important, representing the comparative

benefits of each service to the population to be

served” (Senate Bill 27). Other than the accompanying charge to ‘‘actively solicit public involvement, ’

the HSC was given little guidance on how to

proceed.

<-

<-

2.

3.

Community

clinicians

supply

outcomes

information

for each

Estimate of < I CT pair

I CT pairs I I

I

net benefit

r

Public

preferences for

health states

are assessed

through

telephone

survey J

Within each category, CT pairs were ranked

according to their ‘‘net benefit, ” a number

intended to indicate the average improvement

in quality of life associated with treatment for

the specified condition. To derive this “net

benefit” term, the HSC used data from two

sources: health care providers’ assessments of

treatment outcomes (furnished by provider

groups in the State), and Oregonians’ opinions

about being in various states of health, as

elicited through a telephone survey.

Finally, the HSC undertook a line-by-line

An interim working list, using a formula to

indicate the relative cost-effectiveness of services,

was released in May 1990 but was ultimately

rejected by the HSC. The final list, transmitted to the c

review of the preliminary ranked list and used

its judgment to move selected individual CT

pairs up or down the list.

The final list was sent to an actuarial firm, which

State legislature in May 1991, abandoned the more estimated the cost of providing services at various

thresholds on the list. The State legislature then rigid and quantitative cost-effectiveness approach in

favor of a three-stage process (see figure l-l): decided to fund an initial benefits package consisting of all services included in CT pairs 1 through

587.

—

1. Each CT pair was assigned to one of 17 general

service categories (e.g., maternity services, Characteristics and Determinants of the List services for acute conditions for which treatment prevents death) (box l-B). The HSC then In general, the prioritized list favors prevenranked the categories using a group consensus tive services and services used primarily by

method intended to reflect community health women and children. Both maternity services and

care values as expressed at a series of public preventive services for children, for example, are

hearings and meetings. categories of services that were ranked highly by the
8 ● Evaluation of the Oregon Medicaid Proposal

Box 1-B--Categories of Services Used in the Prioritization Process and

Examples of Condition-Treatment (CT) Pairs

Category Description

“Essential” services

1.

2.

3.

4.

5.

6.

7.

8.

9.

Acute fatal

Maternity care

Acute fatal

Preventive care for children

Chronic fatal

Reproductive services

Comfort care

Preventive dental care

Proven effective preventive care for adults

“Very important” services

10. Acute nonfatal

11. Chronic nonfatal

12. Acute nonfatal

13. Chronic nonfatal

Treatment prevents death with full recovery.

Example: Appendectomy for appendicitis.

Maternity and most newborn care.

Example: Obstetrical care for pregnancy.

Treatment prevents death without full recovery.

Example: Medical therapy for acute bacterial

meningitis.

Example: Immunizations.

Treatment improves life span and quality of life.

Example: Medical therapy for asthma.

Excludes maternity/infertility services.

Example: Contraceptive management.

Palliative therapy for conditions in which death is

imminent.

Example: Hospice care.

Adults and children.

Example: Cleaning and fluoride applications.

Example: Mammograms.

Treatment causes return to previous health state.

Example: Medical therapy for vaginitis.

One-time treatment improves quality of life.

Example: Hip replacement.

Treatment without return to previous health state.

Example: Arthroscopic repair of internal knee

derangement.

Repetitive treatment improves quality of life.

Example: Medical therapy for chronic sinusitis.

Services that are “valuable to certain individuals”

14.

15.

16.

17.

Acute nonfatal Treatment expedites recovery of self-limiting conditions.

Example: Medical therapy for diaper rash.

Infertility services Example: In-vitro fertilization.

Less effective preventive care for adults Example: Screening of non-pregnant adults for

diabetes.

Fatal or nonfatal Treatment causes minimal or no improvement in

quality of life.

Example: Medical therapy for viral warts.

SOURCE: Oregon Wpmmmt of Human Resources, Office of McdicdAssistance Programs, Salem OIU The Oregon Med”caidDemonstrm”on

Waiver Application, sdxnitted to the Health Care F~ing AbiJliStI’diOQ Aug. 16, 1991.
Chapter I-Summary and Conclusions ● 9

HSC. CT pairs in which treatment usually prevents

death or restores the individual to a previous state of

health also rank relatively high. Treatment for

chronic conditions tends to rank slightly lower than

similarly described treatment (e.g., “treatment that

prevents death without full recovery”) for acute

conditions.

Cost is not a major determinant of CT ranking.

For example, although several types of organ

transplants rank low on the list and are uncovered,

many other equally costly transplant procedures are

ranked fairly high. In fact, more than one-half of CT

pairs associated with high costs (as estimated by the

HSC) are located in the top one-half of the list, while

one-third of the lowest-cost CT pairs fall below line

587.5

The process used to derive the list was intended to

rely heavily on quantitative data regarding the

outcomes of treatment and individuals’ preferences

for various health states. Collecting these data was

time-consuming, and they were given considerable

weight by the HSC, as evidenced by their use to

initially rank CT pairs within categories. Despite

this emphasis on quantitative measures of net

benefit, however, the net benefit term associated

with a given CT pair ultimately had surprisingly

little effect on the final ranking of that CT pair on

the prioritized list. Although the net benefit term

remained relevant, in the end the strongest determinants of final rank were those that depended on the

judgments of the Commissioners: the category

rankings and the final line-by-line adjustment of the

list.

The importance of the line-by-line review in

determining final ranking is especially notable. The

HSC’s perception was that this review was relatively

minor in overall effect; staff members estimated that

about one-fourth of CT pairs were moved in some

way during this process (35,244). OTA analyses

showed, however, that many CT pairs moved

substantially during the course of this final review.

Compared with their pre-review rankings (based on

category assignment and net benefit), over one-half

(53 percent) of CT pairs moved at least 25 lines from

their original positions, and 24 percent of all CT

pairs moved up or down at least 100 lines on the list.6

Achievements of the Ranking Process

and the List

Oregon has successfully defined a novel way of

categorizing health care services. In doing so, it

tested concepts such as the integration of outcomes

estimation and public health preferences in a practical policy setting for the frost time.

The process of developing the prioritized list

clearly involved both providers and consumers in

Oregon in a public discussion of the relative value of

different kinds of health care services. Whether or

not the list is implemented in Oregon, it may prove

to be a useful device in other States, and in the

Federal arena, for stimulating a broader public

discussion and enhancing political decisionmaking.

One useful outcome of the prioritization process

is that by laying health coverage decisionmaking

open to public input and debate, it highlighted some

of the basic controversies underlying such decisionmaking. For example, there is no national consensus

regarding whether average values regarding what

health services are important are more relevant than

the values of certain heavy users of health care (e.g.,

the disabled community). Oregon’s process tended

to emphasize the former (e.g., through the use of

average public preferences from the health state

preference survey), while the existing political

process may often give more weight to the latter.

Finally, simply the process of trying to identify

less important or effective services could affect the

way providers make decisions. The process of

developing the list-and, if implemented, the list

itself-might stimulate providers to justify more

clearly to themselves and their patients the effectiveness of a given treatment, and to question that

treatment if they find justification difficult. These

effects would probably be gradual and hard to

identify explicitly. Nonetheless, in the long run they

could be a valuable contribution of a comprehensive

examination of the usefulness of health care services.

Problems of the Process and the List

In its critique of the list, OTA identified three

types of problems with the method chosen to

prioritize health care services. The frost-level problems are those associated with the immaturity of the

S “High cost” as used here means semices costing $40,000 or more; the “lowest-cost’ CT pairs are those costing less than $1,000.

6 A to~ of 60 ~P* ~~g~ fi~ ~vemge s~~5 M a result of MS adjus~ent (30 moved ahve line 587, ~d 30 moved bdOW).
10 ● Evaluation of the Oregon Medicaid Proposal

list and incomplete definition of CT pairs. These

problems are relatively easy to solve once they are

identified (although they would make the list

difficult for providers to use if it were implemented

before they were addressed). In fact, the HSC is

currently considering technical corrections to the

list, some of which are relevant to the issues below.

These problems include:

●

●

●

Missing codes. Each condition is represented

on the list by its ICD-9-CM code.7 Many codes

were intentionally left off the list, either because they refer to conditions to be incorporated into the list later (e.g., mental health

conditions), or because they were nonspecific

codes. Eliminating nonspecific codes would

probably require many providers to change the

way they code services, since the use of many

of these codes is widespread when there is no

definitive diagnosis. In addition, some codes

for significant conditions were left off the list

and must be added to make the list complete.

Duplicate and illogically placed codes. Although there are a number of CT pairs in which

code duplication is intentional (e.g., because

the condition appears with different treatments

at two places on the list), other code duplications are logically inexplicable and probably

represent mistakes. Still other codes do not

apparently belong in the CT pair to which they

have been assigned.

Apparently illogical relative rankings of CT

pairs. Since the ranking process depended

heavily on clinician, public, and HSC judgment, any individual clinician would undoubtedly have improvements to suggest, and the

opinion of any one clinician cannot condemn

the final ranking. Nonetheless, in a few cases

the relative ranking of two CT pairs appears

questionable on reasonably objective grounds.

Some CT pairs in which medical therapy

(usually tried first) is ranked lower than surgical therapy (a secondary line of therapy) for the

same condition fall into this category.

A second type of problem relates to the limitations

of the different inputs to the ranking process.

Eliminating these problems would not necessarily

have changed the ranking of CT pairs in the list,

given the way the list was derived. Nor does the

existence of these problems suggest that decisionmaking under the current program is superior to that

under the prioritization process. However, these

limitations do suggest that the reproducibility of the

inputs to the process is open to question. In

particular:

●

●

●

●

A

Despite the considerable efforts of organizers,

the community meetings held to inform the

HSC about public values were not representative of community residents. Most (about

two-thirds) of those in attendance were health

care workers.

The provider groups that furnished the HSC

with health outcomes information had difficulty with the charge to present average outcomes, since patients in some CT pairs are very

diverse. The groups were not uniform in their

methods for deriving the information (e.g., use

of the published literature, use of Oregonspecific data) or in the way they handled factors

affecting outcomes (e.g., comorbidities).

The outcomes information was intended to be

representative of the opinions of practicing

providers, since data from published clinical

studies are not available to provide information

on treatments for most CT pairs. Nonetheless,

where published evidence does exist, it is

sometimes at odds with the opinions of

Oregon providers.

Provider outcomes information was weighted

according to public preferences. The survey

used to evaluate people’s preferences for being

in various health states had a high proportion

(over one-third) of inconsistent responses. Average scores on the survey were used to

represent preferences, but individuals’ scores

for some preferences varied significantly by

factors such as age, sex, and whether the

respondent had experienced the health state in

question. These differences raise questions

regarding the application of average public

preferences to resource allocation decisions.

third set of problems relates to the use of CT

pairs to define health care services and the use of the

17 categories as a contributing structure for ranking

them. These problems are relatively intractable,

because they cannot be solved without changing the

very tools used to define the prioritized list.

71~.9-CM ~efem t. tie lnter~tio~j C[ass;jjcation Of D&-aSeS, g~ ReVisiOq ~ini~ MM~katiOn coding system fOr diilgnOSW (45).
Chapter 1--Summary and Conclusions ● 11

The 17 categories include a mix of servicespecific (e.g., maternity services) and condition/

outcome-specific (e.g., acute condition, treatment prevents death) categories. The servicespecific categories ranked high can include

poor-outcome CT pairs that happen to include

those services. The condition-specific categories, on the other hand, overlap to the point

where they can be clinically meaningless,

making CT pair assignment to a given category

problematic. A recurrent condition, for example, might be legitimately categorized as either

acute or chronic. Which category it is assigned

to, however, could substantially affect its final

rank.

The use of CT pairs involves combining

patients with heterogeneous conditions, comorbidities, and expected outcomes into the

same group with the same ranking. The treatments included in a given pair are also often

very broadly defined; the treatment in over

one-half (51 percent) of CT pairs is defined as

‘‘medical therapy’ or ‘‘medical and surgical

therapy. ’

To avoid the latter problem entirely, CT pairs

would have to be defined so specifically as to make

them unworkable for any practical program purpose.

Intermediate levels of definition might ameliorate

this problem and still yield a workable list. Nonetheless, accepting the level of heterogeneity implied

by only 709 CT pairs (or even many more pairs)

means accepting that some patients with excellent

expected outcomes with treatment must forego

therapy, while other patients with patently worse

treatment-specific prognoses receive it. This may

be very difficult for both patients and clinicians to

accept.

Program Implications for Providers

Providers Under the Current Program

Oregon’s Medicaid program currently operates

under a Federal waiver that permits the State to make

heavy use of prepaid managed care providers. About

68,000 AFDC enrollees in 10 counties, or about 31

percent of all Medicaid participants, are served by

providers paid on a per capita basis. (Enrollment in

prepaid plans is mandatory for these beneficiaries in

nine counties and optional in a tenth.) Nearly 12,000

of these beneficiaries are enrolled with the KaiserPermanente health maintenance organization (HMO),

which provides both inpatient and outpatient care

(except dental care) to Medicaid enrollees on a

prepaid basis. The remainder are served by 15

physician care organizations (PCOs), which are

capitated for most outpatient, but no inpatient,

services.8

The remainder of Oregon’s current Medicaid

population receives care that is reimbursed on an

FFS basis (177). These participants include all

Medicaid enrollees residing outside the 10-county

managed care area, as well as non-AFDC enrollees

within that area and some in-area AFDC enrollees

that for various reasons (e.g., new eligibles who have

not yet had time to enroll in a particular plan) are not

receiving prepaid care. In addition, all PCO enrollees in the managed care counties receive their

inpatient care and some outpatient services on an

FFS basis.

FFS hospital care for most Medicaid-covered

inpatients is presently reimbursed according to

diagnosis-related groups (DRGs) (similar to the way

Medicare pays hospitals). Outpatient hospital services are paid on a percent-of-actual-costs basis (the

current rate is 59 percent). Certain rural hospitals are

exempt from these payment limits and receive 100

percent of costs for most services. Hospitals serving

a disproportionate share of Medicaid patients receive an additional DRG-based payment.

Most primary care clinics are paid according to a

fee schedule, but by Federal law federally qualified

health centers (FQHCs) and federally certified rural

health clinics (RHCs) are exempt from this rule and

must receive their full incurred costs (Public Law

101-239; Public Law 95-210). Physician services

are also paid according to a fee schedule; current

Medicaid fees in Oregon are close to the average for

this program across the Nation, but Medicaid

physician fees generally are lower than fees paid by

other insurers (e.g., Medicare) (203). Oregon’s

physician fees are frozen for the 1992-93 biennium.

Physicians are not required to accept Medicaid

patients, and available evidence suggests that many

do not. A 1988 survey of members of the Oregon

Medical Association found that while 59 percent

said they accepted any Medicaid patients who
12 ● Evaluation of the Oregon Medicaid Proposal

Figure 1-2—Distribution

CURRENT PROGRAMa

(October 1991)

of Oregon Medicaid Enrollees by Type of Delivery System:

Current and Proposed Programs

ANTICIPATEDb

UNDER DEMONSTRATION

ly capitated

plans

Unrestrict

fee-for-se

66.60/0

Fully capitated

health plan

5.3%

Case-managed

fee-for-service

27.8%

health plans

54.8%

Partially capitated

ashows distribution of entire Mediaid enrollee population, including aged, blind, and disabled recipients. In the current system, Oniy AFDC eligibles are

enrolled in prepa’kt plans.

bsh~ distrib~ion of Medicaid eligibles subject to the cknorwtraticm. Excludes aged, blind, and disabled enrollees who may be irduded in demonstration

during the second year. It has not been decided whether aged, blind, and disabled enrollees, once subjeet to the prioritized list, would be required to enroll

in prepaid plans. This figure reflects the distribution of enrollees anticipated by the ninth month of the demonstration.

SOURCES: Oregon Department of Human Resources, Office of Med”kal Assistance Programs, Salem, OR, T/w Oregorr Medb’d DernorwfrtWorI Wah@r

Appkafion, submitted to the Health Care Finandng Administration, Aug. 16, 1991; B. Tertwmr, Office of Medical Assistance Programs,

Department of Human Resourees, State of Oregon, Salem, OR, personal communication, Jan. 28, 1992.

sought their care, 33 percent said they restricted their

Medicaid practice and the remaining 8 percent did

not accept any Medicaid patients (195).

Changes Under the Proposed Demonstration

Oregon’s proposed demonstration includes three

major provisions intended to affect the way care is

provided to Medicaid recipients (177). First, it

would greatly expand the Medicaid population to be

covered by mandatory prepaid managed care to all

enrollees except those in an unspecified number of

rural counties (i.e., those where adequate prepaid

contracts cannot be negotiated) (see figure 1-2).9

Providers would be fully capitated for all services

(inpatient as well as outpatient) in at least the nine

current mandatory managed care counties, and

partially capitated (i.e., PCOs) in as many as

possible of the remaining 27 counties in the State.

All recipients not living in mandatory prepaid care

counties would be enrolled with a primary care case

manager, who would provide primary care services

on an FFS basis and authorize all referrals. These

delivery system changes would be phased in during

the first 2 years of the demonstration program.

The second major change alters the way payment

rates to prepaid providers are calculated-a change

the State hopes will be an incentive to participate in

the program. Rather than calculating per capita rates

that are based on rates for services in the FFS sector,

the State would base the new prepaid rates on an

actuarial estimate of the average reasonable costs,

across all providers, of providing the covered

services. 10 (This estimate of average reasonable

costs assumes some savings from managed care.)

The extent to which the new method of calculating

rates would result in higher payment than under the

current system is unclear, since the payment amount,

the packages of services to be delivered, and the

covered population are all different.

The change in payment would apply only to

prepaid care contractors; FFS providers would not

9 me s~te ~~cts ~t abut 15 Pmcent of emoll~s in the ~&tq pr~aid cm mu.nties would& enrolled with a p-Cm ~ manager

for various reasons (e.g., because their need for care was so intensive that they exceeded the stop-loss cost threshold for the prepaid plan).

10 No~~ tit~~ou@~method is ~u~~y+ac~te~y+ef~~ to M ‘‘cost-b~~” paymcu~ it is not Won the itChU-d COStS h311Tt3d

by anyone provider. A particular provider’s payments would thus not necessarily bear any relationship to that provider’s costs of rendering the serviees.
Chapter 1--Summary and Conclusions ● 1 3

receive fee increases. 11 As under the current system,

subcontractors to prepaid plans (e.g., hospitals,

clinics) would receive payments that reflect their

negotiating strength. Rural hospitals, FQHCs, and

RHCs located in the mandatory prepaid counties

would lose their special reimbursement protections

under the demonstration as proposed; these providers would no longer be paid their actual costs unless

they could negotiate such payment with the primary

contractors (or unless they were themselves primary

contractors, and their actual costs were lower than

the per capita rates). The greatest payment boon to

many hospitals, clinics, and physicians under the

demonstration is presumed to come from a

reduction in the number of patients who cannot

pay for the services they receive. To the extent

that poor patients who previously received uncompensated care would be covered by Medicaid,

total provider income could increase.

The third major change for providers would be the

need to work within the prioritized list. It is not at all

clear how the list would affect provider practice in

the prepaid sector, since payment to these providers

does not depend directly on the actual services

rendered. Presumably, administrators in prepaid

plans would simply make below-the-line services

one set of a range of services and practices that

physicians would be discouraged from providing.

Some physicians in such plans might counter by

redefining below-the-line conditions into ‘ ‘covered’ CT pairs where possible to justify providing

these services, but the balance of behaviors can only

be a matter of speculation. FFS providers, on the

other hand, would have a clear incentive to ensure

that all services provided could be classified into

above-the-line CT pairs, Their financial success

under the new program would depend heavily on

their ability to become intimately familiar with the

list. Because different providers have different

incentives and capabilities for dealing with the

prioritized list, Medicaid recipients’ access to

specific benefits could vary depending on where

they live and who they see for care.

Problems and Possibilities

in the Proposed Delivery System

Managed care, and especially prepaid managed

care, has been of intense interest to policymakers

and insurers interested in gaining some control over

health care costs. The number of people enrolled in

HMOs nationally has grown from less than 2 million

to almost 34 million over the past two decades (92).

Over 1 million Medicare beneficiaries are enrolled

in HMOs, and as of 1991 more than 1.6 million

Medicaid beneficiaries were enrolled in risk-based

prepaid health care plans (309). Another 1 million

Medicaid participants were expected to be enrolled

with primary care case managers by the end of 1991

(309).

Although Oregon is only one of many States that

has experimented with using managed care to

provide services to its Medicaid population, the little

information that is available suggests that its program has avoided some of the pitfalls encountered

by others (238). The State believes that its current

Medicaid managed care program has reduced State

spending (41). The U.S. General Accounting Office

is currently evaluating Oregon’s existing Medicaid

managed care program in depth to identify more

precisely its problems and successes.

The great interest in managed care, coupled

with the State’s past experience, implies that

Oregon would be a logical choice for an experiment of comprehensive, statewide Medicaid managed care. (Arizona, the only other State in which

all Medicaid care is delivered through managed care,

has a very limited and unusual Medicaid program.)

Still, there are a number of questions and potential

problems that would deserve explicit attention

(either at the planning or the evaluation stage) if the

demonstration were to go into effect:

●

●

Implementation of the proposed managed care

expansions—The State maintains that managed care expansion is on schedule (26). If there

should be any future delays or problems,

however, the costs of the program and the effect

of the prioritized list might be different than

anticipated. For example, if the contract process with prepaid providers takes longer than

expected, or if recruiting primary care case

managers is difficult, traditional unrestricted

FFS billing could be more widespread during

the demonstration than anticipated.

Effects on ‘‘safety net’ providers—Managed

care is of concern to many of the public primary

care clinics that currently serve large Medicaid

and uninsured caseloads (37). FQHCs and

11 Case managers would receive $3 per enrollee per month for the new case management services they would be required to provide.
14 ● Evaluation of the Oregon Medicaid Proposal

●

RHCs would lose some key financial protections if they participate, and many of their

actual-cost-reimbursed patients if they do not.

Although they could expect to provide less

uncompensated care, the financial benefits of

this reduction to the clinics depend on whether

it would be accompanied by a reduction in

Federal subsidy funds and/or increases in

Medicaid revenues. The State is encouraging

public clinics to be capitated contractors themselves, but it is not clear that they have the

expertise or the resources to assume the attendant financial risks. County health departments

might similarly be unable to assume risk and be

primary contractors due to lack of resources

and the inability to meet other contractor

requirements.

Ability to retain participating providers—The

State is counting heavily on the increased

payment presumed possible through the new

payment method to attract and retain participating Medicaid providers. The extent to which

payments to prepaid providers would be-and

would remain-high enough to keep providers

in the program is an open question only

answerable if the demonstration goes into

effect. In the FFS sector, changes in initial and

continued provider participation are similarly

uncertain. The fact that fees would not change

may mean that primary care provider participation would not increase. (Access to specialty

care might increase, however, if case managers

successfully negotiate referrals for their patients.)

Program Implications for Beneficiaries

Changes in Eligibility and Enrollment

If the waiver is approved, Oregon would be the

first State in the Nation to guarantee federally

cofunded Medicaid coverage to all legal residents

with incomes below the FPL. The new incomeonly eligibility criteria for Medicaid would mean

that projected enrollment in the program would

increase by more than 20 percent in the frost year and

72 percent by the fifth year of the demonstration

program. (The increase in the fifth year is projected

to be 59 percent if the employer mandate is in place.)

Pregnant women and young children with family

incomes up to 133 percent of the FPL are currently

eligible for Medicaid, and they would remain

eligible under Oregon’s proposal. One aspect of the

proposal intended to reduce program and applicant

paperwork, however, might affect some of these

currently eligible individuals. Under the demonstration, eligibility for non-AFDC applicants would be

based solely on simple gross family income. In

contrast, at present, near-poverty pregnant women

and children under age 6 can exclude certain types

of expenses (e.g., some work-related child care

expenses) in order to meet income qualifications.

Some applicants who thus would have been eligible

under current rules might be ineligible under the new

program.

The number of individuals who would be ineligible under the new rules is unknown. The State

believes it to be very small (less than 1 percent of

currently eligible pregnant women and young children) (253). On the other hand, one clinic estimates

that over 9 percent of its patients who qualify

because they are pregnant or are young children

would be affected (see ch. 5) (1 14).

The demonstration would also eliminate the

current 3-month retroactive eligibility for nonAFDC Medicaid enrollees and would guarantee

6-month periods of continuous Medicaid coverage

for all new eligibles except those receiving AFDC.

Average length of eligibility in the program would

probably increase somewhat compared with the

present. Non-AFDC beneficiaries would all remain

eligible at least 6 months, and beneficiaries with

AFDC-based eligibility could still be eligible for

Medicaid under the demonstration even if their

incomes increased somewhat.

Changes in Coverage and Access

for the Newly Eligible Population

For the people who would be newly eligible

under the waiver—those who cannot qualify for

Medicaid benefits under current rules—the implications of the new eligibility and coverage

rules are unambiguously good. These individuals

would lose no coverage at all, since they have none

now. They would gain coverage for all services

included in CT pairs 1 through 587, as well as

coverage for diagnostic services.

The implications of the demonstration program

for access to health care services for this population

are likewise unambiguous. If medical care coverage

has any relevance for access at all, people in this

group would have access to a broad spectrum of care
Chapter 1--Summary and Conclusions ● 15

not previously within their reach. At the least, they

would have the right to demand care that currently

depends on either their ability to pay for it out-ofpocket, or on the good will and generosity of

individual providers.

Changes in Coverage and Access

for Current Beneficiaries

Changes in Benefits-For current Medicaid eligibles, the changes in coverage are more complex.

Certain benefits that lie above line 588 would be

clearly new for adults: many preventive health

services, dental services, and several types of organ

transplants (adults are currently covered only for

cornea and kidney transplants). Hospice care for the

terminally ill would also be a new benefit for both

adults and children.12

“Lost” benefits for current eligibles would include all services below line 587 that are now

covered. For many below-the-line CT pairs, the real

coverage lost would be negligible. In some instances, for example, the pair is ‘‘empty’ ‘—i.e.,

those services are already never or rarely provided

(e.g., aggressive therapy for anencephalic babies)13

(215). In other cases, the service is significant but is

not covered under current Oregon Medicaid rules

(e.g., breast reconstruction after mastectomy [285]).

Other below-the-line CT pairs, however, are for

conditions whose treatment is now covered by

Medicaid (if it is determined to be “medically

necessary’ ‘). At least five of these CT pairs include

some life-threatening diagnoses for which clinicians

believe some patients might be effectively treated.14

Other uncovered CT pairs include painful, disabling

conditions for which treatment can sometimes bring

relief (e.g., trigeminal nerve disorders), and conditions for which treatment is believed to be sometimes curative (e.g., focal surgery for certain types of

epilepsy) (10,67,294,31 1). One uncovered CT pair,

removal of viral warts, can sometimes be a preventive measure against sexually transmitted disease

and certain gynecological and anal cancers (317).15

Implications for Access—For most persons

currently eligible for Medicaid, access to care

would probably be different under the demonstration, but it is not clear whether it would be

better or worse for the population overall. On the

one hand, if the managed care system is implemented as planned, all beneficiaries would be

assured of a provider who has agreed to see

them-something that may not always happen at

present. In addition, adults in particular would have

coverage for significant services not previously

available. Even where services would ordinarily be

uncovered, they might be provided in the FFS sector

if they could be ‘upcoded’ to covered CT pairs, and

they might be provided in either the FFS or the

prepaid sector if the provider felt a professional

responsibility to provide the care.

On the other hand, just as under the existing

Medicaid program, coverage for services may not

always mean receipt of those services. For example,

if waiting time before getting an appointment for

routine preventive services is long, some patients

might not receive the services (or the followup

treatment for detected conditions) before they became ineligible for Medicaid benefits. Long waiting

times for appointments might also affect the ability

of pregnant women to receive early prenatal care. In

addition, the incentives of a prepaid, capitated

payment system may mean that some managed care

providers may be less willing to provide some

covered services than their FFS counterparts.

The loss of previously covered benefits would

certainly reduce access to these services. In some

cases, the reduction may be desirable and even

beneficial to the individual (e.g., if it reduces the

provision of ineffective services). In other cases,

however, it appears that some patients might lose

access to useful and potentially effective services

that are clearly utilized at present. Six of the most

frequent diagnoses of Oregon Medicaid hospital

12 Hyperbaric oxygen &eatrnent and tissue expanders would also be new &nefitS und~ the pmpod Pm-.

IS ~ ~encep~c babies, the ~~ is un&VelOped and absent at birth.

14 me five poten~ly fa~ ~Woses tit Me cu~fly cover~ and can IX effmtively treated include impetigo h~tiformis, my Whenia ~vis,

Schmidt’s syndrome, viral pneumoni% and bone marrow transplants for non-Hodgkin’s lymphoma in children (3,17,21,38,44). (Transplants for

non-Hodgkins lymphoma in adults and liver transplants for alcoholic cirrhosis are also low-ranked CT pairs in which treatment is sometimes lifesaving,

but bone marrow and liver transplants are only covered for children under Oregon’s current Medicaid program.) Myasthenia gravis may ultimately be

reclassifkd into a CT’ pair higher on the prioritized list as a result of changes currently being considered by the Health Services Commission (23).

15 ~~~ v~ w~ rmov~ is under co~ide~tion by tie Hsc, w~ch may relabel a cover~ CT pair to clarify mit CLUI include thk WMCt3 fOr

men as well as women (23).
16 ● Evaluation of the Oregon Medicaid Proposal

inpatients in 1989, for example, related to CT pairs

that are below the line.l6

Thus, current Medicaid beneficiaries would

both gain and lose something under the proposed

plan. It seems likely that both the gains and losses

are less extreme for access than for benefits.

Gaining a benefit does not always imply access (e.g.,

if waiting times were to inhibit access to covered

preventive services), and losing a benefit is not

accompanied by a complete loss of access, either

(e.g., because charity care would still exist).

Three aspects of Oregon’s proposal that Oregon’s

Medicaid program has not yet addressed in detail

could have substantial implications for access to

services:

CT/DRG incongruities. It is not yet clear how

hospital inpatients would receive coverage for

diagnostic services related to uncovered conditions, because current hospital billing and

payment practices do not separate diagnostic

from treatment services. Under the proposed

program, many hospitals would still be paid on

an FFS basis (even within the prepaid care

system), which means that reimbursement would

be made on the basis of DRGs. But DRGs and

CT pairs, on which coverage is based, are

entirely unrelated to one another. There are

many fewer DRGs, for example, and unlike CT

pairs they include diagnostic as well as treatment services. The State intends to develop a

mechanism to recognize inpatient diagnostic

services specifically (212), but if it cannot do so

promptly and adequately, beneficiaries’ access

to these services could be compromised.

Utilization review, To a large extent, access to

services under the proposed demonstration

program would be determined not by the

prioritized list itself but by the as yet unknown

or unspecified policies and practices of the

Oregon Medicaid administrators and by individual providers. The extent to which the

Medicaid office would conduct CT-pair-level

utilization review under the new program, for

example, is still unclear. Even where review

criteria exist, the State may not be able to detect

some practices of interest. In particular, some

treatments for CT pairs below the line (e.g.,

durable medical equipment, prescription drugs)

cannot easily be linked administratively with

the conditions for which they were prescribed,

since the bills do not include diagnoses.

Guidelines and instructions for providers. The

codes on the prioritized list itself are not

sufficient to enable a provider to reliably

determin e where a patient’s condition and

treatment is most appropriately classified. For

example, the only criteria for how to determine

that a cancer patient is “terminally ill” (and

therefore ineligible for treatment of the cancer)

is that the patient has less than a 10 percent

chance of surviving 5 years. Making this

determin ation is up to the physician. Although

it intends to do so, the State has not yet

established detailed instructions or guidelines

for providers using the list to determine which

services are covered and under what circumstances.

Program Costs

Oregon estimates that the costs of the proposed

demonstration (over and above the projected normal

costs of the State’s Medicaid program) would be

about $25 million during the first year and about

$238 million over the 5 years of the waiver (table

1-2). Of this, the State would spend about $95

million, while the Federal Government would be

responsible for the remaining $143 million (177).

(The State estimates that the Federal Government

would save $34 million in the Medicare program as

an indirect effect of the Medicaid waiver, for a net

Federal cost over 5 years of $109.6 million.)

Costs specific to the demonstration project include the costs of increasing program enrollment and

offering some new services, extra administrative

costs, and other factors. Although the State predicts

that the use of the prioritized list to reduce certain

benefits and the use of managed care to control

utilization would result in some offsetting savings,

the demonstration is nonetheless expected to require

a net increase in expenditures.

OTA finds that the State of Oregon and its

actuarial contractors have used a reasonable

approach for the difficult task of estimating the

costs of the proposed demonstration program.

Nonetheless, the State may have underestimated

16 ~me diwo=S in~lud~: M- ~~~led; ~~fl~ vti inf~tion; in@~ inf~tion due to Otier organis~ not elsewhere chss~l~ WUk

upper respiratory infectioru displacement of lumbar intervertebral disc, without myelopathy; and viral pneumonk
Chapter 1--Summary and Conclusions . 17

Table 1-2—Summary of Oregon’s Demonstration

Cost Estimate (in millions of dollars)

Year 1 Year 5a

5-year

FY 1993 FY 1997 total

Projected cost of current

program $925.9 $1,546.7 $6,041.8

Total program cost under

demonstration b950.8 1,581.7 6,280.1

Incremental Medicaid cost

due to demonstration 24.9 35.0 238.3d

State Medicaid share 10.1 14.5 95.0

Federal costs (Medicaid

only) e

14.8 20.5 143.3

Change in Medicare due

to employer mandate 0.0 (17.6) (33.7)

Total change In Federal

Medicaid/Medicare costs 14.8 2.9 109.6

NOTE: Oregon’s cmt estimates as presented here are based on the

original antiapated startup date of July 1, 1992. Estimates may

change because implementation has been delayed on a month-tomonth basis pending HCFA approval of Oregon’s waiver request.

Whe employer mandate is to take full effect by the fourth year of the

demonstration, resulting in a presumed drop in Medicaid (and Medicare)

costs in years 4 and 5 of the demonstration due to beneficiary coverage

through employers, rather than public programs.

%otal costs of Oregon Medicaid program, including services and populations not currentiy included under the demonstration.

clncremental CONS of the demonstration presented here do not include the

costs of including mental healthkhemical dependency services or the

costs of services provided to elderly and disabled Medicaid beneficiaries.

These services were not included in the original waiver application and

their costs would be separately calculated at the time they would be

included under the demonstration,

dlnaemental Mgdi~id costs are assumed to increase through year 3,

reaching $60 million that year, then decrease in years 4 and 5 due to the

full implementation of the employer mandate.

em= not include Fgdgra[ research cmts of demonstration WakJdiOn.

SOURCE: Data from Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, The oregon Medkajd Demonstration Waiver Application, submitted to the Health

Care Financing Administration, Aug. 16, 1991.

program costs, since crucial assumptions would

tend to raise costs or reduce savings if the

estimates used prove incorrect.

Any delay in fully implementing the planned

managed care system, for example, would reduce the

expected program savings due to the use of managed

care. Any inabilities of new managed care providers

to actually meet savings expectations would have a

similar effect. In addition, the administrative difficulties of determining below-the-line use of certain

products and services (e.g., durable medical equipment, prescription drugs) means that if the use of

these services is higher than accounted for in the cost

estimate, overall patient care costs could be likewise

somewhat higher than expected. Program costs

could also be higher than expected if some ‘‘techniTable 1-3-Examples of Condition-Treatment (CT) Pairs

Excluded If Costs Were Underestimated by 5 Percenta

Baseline threshold: CT pair 587

Per capita monthly cost: $129.44

New threshold: CT pair 503

New per capita month/y cost: $122.98

Examples of CT pairs excluded

504

506

514

515

525

531

533

534

544

546

552

554

555

569

572

573

586

567

Hernia (unobstructed)

Muscular dystrophy

Acute poliomyelitis

Pituitary dwarfism

Gallbladder anomalies

Spontaneous and missed abortion

Minor burns

Allergic rhinitis and conjunctivitis

Spine deformities

Disorders of bladder

Foreign body in eye

Closed fracture of epiphysis of

upper extremities

Congenital dislocation of hip

Fractures of ribs and sternum

Chronic sinusitis

Lumbago

Spondylosis and other chronic

disorders of back

Esophagitis

Repair

Medical therapy

Medical therapy

Medical therapy

Medical and surgical treatment

Medical and surgical treatment

Medical therapy

Medical therapy

Repair and/or reconstruction

Medical and surgical treatment

Foreign body removal

Reduction

Repair and/or reconstruction

Medical therapy

Medical therapy

Medical therapy

Medical and surgical treatment

Medical therapy

aAssumes all cost savings to balance out the cost overrun would b

achieved solely through reducing benefits.

SOURCE: Office of Technology Assessment. Calculated from information

in Oregon Department of Human Resources, Office of Medical

Assistance Programs, Salem, OR, The Oregon Medicatd Demonstration Ww”ver Application, submitted to the Health Care

Financing Administration, Aug. 16, 1991.

cal fixes’ to the program are necessary to avoid

unintentional consequences of the initial list. For

example, some effective services appear to be

grouped in CT pairs with ineffective ones and ranked

low; if this were “freed” by reassigning the codes

for the effective services to higher ranked CT pairs,

program costs would increase slightly.

Although many factors that might increase costs

would probably have fairly small effects, even small

cost overruns could have significant implications for

benefits. If all cost savings to balance out only a 5

percent cost overrun had to be achieved solely

through reducing benefits, for example, more than

80 CT pairs would have to be eliminated from

coverage (table 1-3).

Some costs external to the program, but relevant

to Federal fiscal concerns, may also have been

underestimated. In particular, the Congressional

Budget Office (CBO) has predicted a loss of Federal

tax revenues if the State implements the associated

mandate requiring small businesses to provide

health insurance. (This revenue loss was not accounted for in the cost analysis, although savings

predicted from this mandate were included. The
18 ● Evaluation of the Oregon Medicaid Proposal

Box 1-C--Medicaid Waivers Requested by the State of Oregon

To implement its proposed 5-year Medicaid demonstration program, the State of Oregon is requesting that the

Federal Government waive 15 rules that it normally requires States to follow in order to qualify for Federal matching

funds (33). Four of these waivers would be continuations of waivers already in effect in Oregon that enable the State

to carry on its existing managed care demonstration program.1 The other 11 waivers must be newly granted They

are:

1. Amount, duration, and scope of services--Generally, all Medicaid recipients must have equivalent service

coverage, with coverage unconnected to the patient’s condition or other circumstances. In the

demonstration, some services (i.e., those below the line) would be denied based on a patient’s diagnosis.

In addition, until the elderly and disabled populations are added to the program, covered services for these

populations would differ from coverage for other recipients.

2. Uniformity--Federal rules require that a State’s Medicaid plan apply uniformly throughout all geographic

areas of a State. Under Oregon’s demonstration, managed care plans and access to providers may vary

between urban and rural regions and even within these regions.

3. Medically needy eligibility--States with medically needy programs must ordinarily make them available

to at least children and pregnant women. Oregon proposes to eliminate the program for all populations

enrolled in the demonstration program.

4. Income limitations--Federal rules prohibit Medicaid coverage for families with incomes greater than

1331/3 percent of the State’s Aid to Families with Dependent Children (AFDC) standard and for disabled

persons whose incomes exceed 300 percent of the Supplemental Security Income (SSI) income standard

(unless they qualify as medically needy). Oregon’s proposed coverage of all persons with incomes up to

100 percent of the Federal poverty level would include some persons who would not be eligible under the

usual Federal rules.

5. Eligibility standards--Persons who are categorically eligible for cash assistance through AFDC, SSI, and

other qualifying programs but who are not receiving this assistance are subject to resource as well as

income standards to determine their financial eligibility for Medicaid. Oregon, however, proposes to

eliminate the resource standard and permit individuals and families to qualify for Medicaid solely on their

1 m fom ACVW W@Vm ahidy in effect in Oregon that would need to continue under the propoaed demonstration m- Wdve

Federal Medicaid rules regarding: 1) a patient’s heedom to ChOOSC any C@ifkd ~OVidC!X, 2) leek-b 3) sharing with providers illly cost savings

generated by decreased health service lltihd~ and 4) ease management.

State maintains that Federal revenue loss from this l-C). OTA assessed whether Oregon’s proposal

source would be negligible due to such factors as might be in conflict with provisions of other Federal

increased tax revenues from providers.) Also, if statutes, which only Congress can waive, or might

Oregon’s passage of Ballot Measure 517 decreases come in conflict with the U.S. Constitution, a barrier

the State funds available to the Medicaid program, to its implementation that could be overcome only

as it is predicted to do, the State may be unable to with a constitutional amendment.

furnish its full share of demonstration funding even

if program costs have been correctly estimated. With one possible exception, Oregon’s Medicaid

Other Issues

proposal appears not to- conflict ‘with the U.S.

Constitution. This exception concerns provisions of

Issues the Oregon plan that would change the State’s

common law in such a way as to prohibit most legal

applied to the U.S. Health Care recourse when a provider refuses to provide mediFederal Legal

Oregon has

Financing Administration (HCFA) for permission to cally necessary care that is not covered by Medicaid.

waive provisions of the Medicaid statute that con- This could be interpreted by the courts as permitting

flict with its proposed demonstration project (box a different level of legal protection against sub17 B~~t M~~~s is ~ S@tewi& referend~ p~s~ in Novem&r 1~ which p~s iII a rolltick of 1(MxI plUp(3~ @x&i OV17 5 y- ad K@lM

the State to replace billions of dollars lost by local counties for school funds ffom the State’s general fund.
Chapter 1--Summary and Conclusions ● 19

household income. The State would also change the rules regarding which household members’ incomes

are countable for eligibility purposes.

6. Eligibility procedures--States are generally required to have Medicaid eligibility procedures no more

restrictive than under the State’s AFDC plan. In addition, States are required to provide retroactive

eligibility to certain categories of individuals (i.e., medical assistance applies retroactively for up to 3

months before the person actually applied for Medicaid). Under the demonstration, however, Oregon

proposes to implement different eligibility rules and procedures for those persons receiving cash assistance

(under AFDC, etc.) and those who are not. The latter group of persons would not qualify for retroactive

eligibility, and their eligibility would be based only on gross income.

7. Freedom of choice—Under the demonstration, most recipients would not be able to change providers at

will but would be ‘‘locked in” to their chosen prepaid managed care provider, which could be changed

only every 6 months.

8. Cavitation contract requirements-The Federal Government requires that prepaid health plans (PHPs)

contracting to serve Medicaid patients meet specific requirements, including that the PHP’s patient

population beat least 25 percent non-Medicare and non-Medicaid patients. Oregon is requesting that the

PHPs participating in the demonstration not be required to meet these standards. The State is also

requesting waivers that would eliminate the need for the Health Care Financing Administration (HCFA)

to approve large contracts with PHPs (i.e., those where payment may exceed $100,000).

9. Upper payment limits for cavitation contract requirements—Federal rules prohibit PHP payments that

exceed estimated equivalent fee-for-service payments. Oregon requests a waiver of this requirement to

enable incentive payments to certain PHI%.

10. Payment to Federally QualifiedHealth Centers (FQHCs)--State Medicaid programs must cover services

provided in FQHCs, and they must provide facility-specific, cost-based reimbursement for these services.

Under the demonstration program, however, some FQHCs might be part of PHPs and thus paid differently

(and their services not uniformly available).

11. Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) service mandate--States are usually

required to pay for medical services when the need for that service is determined at an EPSDT visit (even

if the State would not otherwise cover the service). This requirement must be waived if the demonstration

is to proceed as planned, because some identified services might lie below the funded line (initially line

587 on the prioritized list).

Finally, in addition to the specific waiver requests, Oregon “requests that HCFA grant any other waiver that

HCFA deems to be required in order to implement the demonstration” as it is described in the proposal document.

standard care-and possibly a different legal stand- not very vulnerable to a challenge on the basis of

ard of care-for Medicaid beneficiaries than is

permitted for the remainder of the State’s population. Such a difference might possibly be interpreted

as a violation of the Equal Protection Clause of the

14th Amendment of the U.S. Constitution (or of

similar provisions of the Oregon State constitution).

Several Federal statutes are relevant to Oregon’s

proposal, including those requiring protections for

human research subjects and those that prohibit

dis crimination on the basis of race, disability, or age.

The proposal appears to fall within the exceptions

allowed by the human research subject protection

statute for social demonstration programs (although

one advocate suggests that language in a 1992

appropriations bill suggests otherwise) (222).

The effects of the anti-discrimination statutes are

not entirely clear-cut, but the proposal is probably

these statutes unless in its implementation the denial

of benefits falls disproportionately on protected

groups (e.g., because the services they use tend to

appear below the cutoff point on the list). Based on

OTA’s analysis of the list, this type of disparate

impact is unlikely to occur with the line drawn at

587. If the line were to move upward due to funding

shortfalls, the potential for such a challenge would

increase. Some advocates have argued that, in its

implementation, the proposal may also be vulnerable to challenge on the basis of the Americans with

Disabilities Act of 1990 (Public Law 101-336)

(150). The lack of case law involving this statute,

however, makes it impossible to predict how future

courts would react.

The provision of SB 27 that exempts providers

from liability if they refuse to provide uncovered but
20 ● Evaluation of the Oregon Medicaid Proposal

medically necessary services to Medicaid beneficiaries 18 also conflicts with existing Federal statutes

that require most hospitals to provide basic emergency care to anyone in need. Thus, it is possible that

hospitals (and possibly emergency room physicians)

could be prosecuted under Federal statute for not

providing some services even if they were exempted

from liability under State law.

Evaluation Issues

Oregon’s demonstration proposal is ostensibly a

health services research proposal. As such, a justification for funding the proposal would be to draw

information useful to other States and to the Federal

Government.

In this context, the program has some significant

drawbacks. Many of the potential applications of the

information gleaned from the project relate to its

components rather than its overall effects (e.g., Does

the use of a prioritized list to define benefits reduce

costs without harming the existing Medicaid population?). An evaluation of the project, however, is

unlikely to have the power to disassociate the

independent effects of service prioritization from the

effects of managed care expansion and broader

insurance coverage for the poor.

In fact, a likely outcome is that no separate

effect of the list on health status would be

distinguishable at the current benefit threshold

(even if one exists). If the threshold moves up the list

to accommodate higher-than-expected program expenditures, the strongest detectable effect could well

be a negative one for access, quality, and health

status of current program beneficiaries. Given the

limits of comparative data, it may not even be

possible to detect the effect of the combination of

these changes on many outcomes of interest.

There are two other potential experimental contexts in which the demonstration might be viewed.

First, the proposal can be viewed as a simple

experiment designed to answer a single question: Is

it possible, using the mechanisms Oregon would

implement, to provide acceptable health care coverage to the poor, uninsured population without

significantly raising costs to the taxpayer and to the

health care system? Evaluating this question in the

aggregate requires much less detailed data than

evaluating the components and intermediate effects

of the program, and the answer would be of interest

to many researchers and policymakers. The danger

of this approach is that as a research demonstration,

its results could only be appropriately extrapolated

in the aggregate. Other States could apply the results

only if they, too, were willing to implement the total

package that Oregon proposes.

A second question is even further from the

traditional bounds of health services research: Is

health care coverage based on prioritization of health

care services, with open public input, politically

sustainable? If, for example, program costs were

higher than expected, would the legislature actually

be able to reduce benefits or increase revenues to

fund it? Or would the plan evolve over time into

simply another version of the current system, in

which neither eliminating specific treatments nor

raising taxes becomes politically feasible, and the

State must resort once again to limiting eligibility

and provider payment? If these questions could be

answered, implementation of the proposal maybe of

interest to some policymakers despite its potential

drawbacks as a health services research project.

CONCLUSIONS

In designing its proposed Medicaid

tion program and related changes to its

demonstrahealth care

system, the State of Oregon has achieved what few

others have: a dramatic and comprehensive proposal

to change the way health care is delivered that

appears to be generally accepted by its residents and

providers. The State has invested considerable

resources into its unique Medicaid proposal. Many

of the proposed changes have stimulated open public

debate, and the lessons learned from the effort to

develop a categorization of treatments and conditions are valuable ones. The State’s explicit attempt

to integrate and incorporate outcomes information

and broad public input is especially notable.

The State believes that despite possible problems,

the gains it anticipates from the proposal make the

program worth trying. The immediate issue for the

Federal Government, however, is not only whether

the proposed changes should take place but

whether Federal revenues should be used to fund

them. Unlike the State, which is legitimately con18 ~taeS@ly, ~ Provision ~ &n c~~ in ~ch a way ~ to imply tit it might continue to apply to Mdhid providers even if the

demonstration project does not go fonvard.
Chapter 1--Summary and Conclusions ● 21

cerned primarily with the effects within Oregon, the

Federal Government must consider the ways in

which the information from the proposal might be

useful to others. It must also consider the opportunity costs of funding Oregon’s proposal relative to

other possible uses for those funds.

Certain aspects of Oregon’s proposal hold

promise as a potential demonstration of ways that

health care costs might be constrained or health care

access improved. The proposal to include all Medicaid enrollees in some form of managed care, with an

emphasis on various forms of prepaid care that grade

the degree of financial risk to the size and experience

of the provider, is intriguing. Many health care

payers have looked to managed care to reduce costs

without endangering health, and there would probably be considerable interest in the results of an

experiment that tested comprehensive managed care

for Medicaid beneficiaries. Oregon’s past experience with managed care suggests that this State

would be a reasonable location for such an experiment. The effect on provider participation of a

changed method of payment likewise is of interest.

Expanding coverage to all poor persons is

clearly a benefit of the proposal. This component

of the proposal is both the most expensive and the

most likely to yield positive results. Aside from the

simple benefit to those involved, there are some

solid reasons to test coverage expansion as an

experiment; for example, such a study might shed

additional light on the links between health insurance, health care access, and health status.

The move to simplify eligibility rules in conjunction with coverage expansion is also attractive, since

it would be expected to increase program participation and reduce program expenditures relating to

reviewing applications. However, the possibility

that some pregnant women and young children

might be ineligible for benefits under the new

rules is a significant drawback of the demonstration as proposed, since it would almost certainly

harm those affected. A simple remedy for this

problem might be to increase the gross income

eligibility level for pregnant women and children

under age 6 applying to the program (e.g., to 150 or

185 percent of the Federal poverty level).

Despite the many positive aspects of these components of the program, OTA has some serious

reservations about the overall demonstration

project as proposed. The most troublesome aspects

are the prioritized list and the lack of any minimum

level below which benefits may not fall.

OTA has made no attempt to decide whether open

‘‘rationing’ of health care services is desirable, or

unnecessary, or inevitable. However, OTA’s analysis of Oregon’s prioritization process and the resultant list of services suggests that if such a prioritization mechanism is adopted, classifying health care

by general service categories and CT pairs in

order to prioritize services is not an especially

promising approach. The level of aggregation

required by the CT pairs on Oregon’s list means that

treatments effective or ineffective for specific patients still cannot be adequately discriminated.

The prioritized list, while a potentially useful

source of public opinion information to policymakers, would probably not be an effective

internal cost-containment tool. The ranked list

does enable overall program expenditures to be

controlled by increasing or decreasing benefits. But

the list itself does not necessarily encourage costefficient health care decisions to be made at the

individual level. Diagnostic services, for example,

are not prioritized; only existing review or management mechanisms (e.g., management practices of

prepaid care providers) would limit their use. And

despite the State’s attempt to rank aggressive

therapies for some diagnoses (e.g., cancer) low when

patients are terminally ill, paradoxically the list does

not preclude heroic procedures for these patients. A

terminally ill patient would still be covered for

last-minute life-saving therapies such as treatment

for respiratory or cardiac arrest. This option would

probably be desired by many patients, but it could

not be expected to lower costs. In fact, assuming

Oregon’s estimates of the cost savings that could

be expected from managed care are correct,

managed care might have a much larger effect on

internal cost control than the prioritized list.

A contribution of Oregon’s extensive efforts is its

demonstration that outcomes and cost-effectiveness data, while extremely valuable for certain

purposes, are inadequate for use as the buildingblocks of a ranking system of all services. More

and better information on the outcomes of more

health services would improve its usefulness, but it

is unlikely that such information will ever be

sufficiently comprehensive to enable all health care

services to be objectively ranked. The value of such

information lies in comparing the usefulness of
22 ● Evaluation of the Oregon Medicaid Proposal

particular sets of services on the margin--e.g., for

use in guidelines, quality-of-care screens, or deciding whether specific individual services should be

covered and under what circumstances.

In fact, any comprehensive ranking system

would, like Oregon’s, need to rely on judgmentand value-based decisionmaking. Because such a

list cannot be derived from scientific evidence on

effectiveness, outcomes, and cost, and because the

replicability of the public meeting and survey

information is still open to question, Oregon’s list

would probably not be exactly reproducible in

another State even if the identical process was

undertaken. Agreement between two ranked lists

might be similar at the bottom (since many people

would agree that certain services are ineffective or

futile), but differences might be much more substantial further up the list.

Oregon’s intensive efforts to make public input a

basis for detailed priority-setting demonstrate both

the possibilities and the limitations of this process.

The State successfully involved providers and consumers in a process to inform public decisionmaking

regarding health care priorities. However, the validity of public input in any quantitative ranking is still

subject to challenge. The use of public preference

data to weight health outcomes has promise, but

Oregon’s experience suggests that this method is not

sufficiently developed to use as the basis for a

detailed ranking system ready for implementation.

The information from hearings and public meetings was clearly informative and useful in a ranking

process that proved to be unavoidably subjective,

but the meetings were not representative of the

community despite the efforts of organizers. In fact,

the level of effort Oregon undertook implies that

proportional representation is probably not a standard possible to achieve under any system.

Any attempt to change the way benefits are

defined will involve tradeoffs of gains and losses,

and Oregon’s proposal cannot be legitimately criticized on the grounds that there is a clear net loss to

current beneficiaries. Current beneficiaries lose

some current benefits, and a few would almost

certainly be harmed in some way by this loss. But

beneficiaries would also gain some new services

under the demonstration, and they could still receive

some uncovered services as charity care. At a

benefit level set at line 587 on the prioritized list,

the overall net effects of coverage changes on

current Medicaid participants cannot be predicted with confidence.

If the benefit threshold changes and reduces

the number of covered CT pairs, however, it

would become more likely that the proposed

program would result in net harm to the health of

current beneficiaries. This finding is troubling

because the related finding that demonstration costs

may have been underestimated raises the likelihood

that coverage would be cut during the course of the

waiver. (Lower future funding itself would not

necessarily mean that current beneficiaries would

suffer net harm, because they might have lost some

benefits under the current program as well. But

lower future funding combined with relatively

higher funding required to sustain the new proposal

would increase the likelihood of net harm.)

In fact, the lack of a guaranteed minimum set of

benefits below which coverage would not be

allowed to fall is the most disturbing aspect of

Oregon’s proposal.19 If program expenditures are

higher than predicted, and if the passage of Ballot

Measure 5 and internal budget priorities prohibit the

State from making up the difference, the Federal

Government would be faced with three possibilities.

First, it could undertake to fund the difference

out-of-pocket, covering Oregon’s population at the

expense of funding other health care experiments

elsewhere in the Nation. Second, it could permit the

benefit package to be cut, increasing the likelihood

that Medicaid beneficiaries would be harmed by the

demonstration. Third, it could withdraw or condition

its continued approval and either modify the demonstration substantially or permit it to end, reducing the

demonstration’s usefulness for the purpose of research.

In summary:

1. Oregon’s efforts to develop a proposal to make

radical changes to its Medicaid program have

yielded valuable information about the usefulness of outcomes data and public input in

prioritizing services. The ranking process may

also have value as a way to better inform

policymakers and to enhance provider and

19 ~contr~~ at present the Federal Governm ent requires that States coverat least some mandatory benefits and populations in order to receive Federal

filnding.
Chapter 1--Summary and Conclusions ● 23

patient awareness. Nonetheless, other States

would not be well-advised at this time to rely

on Oregon’s particular CT-based prioritization

method to categorize and rank services. The

list itself cannot be applied in other settings

with equivalent meaning. Also, the list discriminates poorly among effective services at

the individual level, and it would probably not

be ineffective internal cost-containment mechanism in FFS practice settings.

2. At a coverage level set at line 587, health care

access under the proposed program would be

improved for newly eligible participants and

would not be clearly either better or worse for

most current beneficiaries. Current beneficiaries would be more likely to be harmed if the

number of covered CT pairs was reduced.

3. If implemented as proposed, the demonstration

program may yield relatively little useful

information about the different effects of

service prioritization, comprehensive managed care, and comprehensive insurance coverage for the poor. A somewhat more modest

experiment testing the effects of the managed

care and coverage expansions alone would

yield more specific information while providing most of the benefits of the current proposal.

(The Oregon proposal in its entirety might still

be valued as a political experiment, however.)

4. If the full demonstration is approved, some

specific components deserve attention to ensure that the program is fully ready to implement. Examples include:

. The need for detailed instructions for providers on how to use the list;

. The need to reconcile hospital DRG-based

billing, CT pairs, and covered diagnostic

services;

. The need for more extensive baseline data

for assessing program effects (particularly in

the areas of utilization in the existing

prepaid system, utilization and health status

of the currently uninsured, and baseline

health measures for specified subgroups of

patients that could be significantly harmed if

their treatments are not covered);

. The difficulties that public health clinics

may face as they try to become part of the

managed care system; and

● The possibility that some pregnant women

and young children who would qualify for

coverage under the current program would

be ineligible under the proposed new eligibility rules.

5. Specifying a threshold below which coverage

would not be allowed to drop and gaining

greater confidence that Oregon could meet its

financial responsibilities under the waiver

would also improve the program’s chances of

success.
Chapter 2

Context of the Oregon Proposal
Contents

Page

INTRODUCTION . . . . . . . . . . . .

Population and Income . . . . .

Health Status and Resources

MEDICAID IN THE UNITED

Eligibility . . . . . . . . . . . . . . . . . .

Benefits . . . . . . . . . . . . . . . . . . .

Program Costs and Spending

State Responses . . . . . . . . . . . .

THE UNINSURED . . . . . . . . . . .

The Problem . . . . . . . . . . . . . . .

Barriers to State Solutions . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STATES AND OREGON . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

Oregon’s Efforts To Expand Health Care Access

2--1.

2-2.

2-3.

2-4.

Figures

Percent Increase 1%0-90

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

27

27

28

28

29

30

31

32

32

34

35

Page

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Percent Distribution of Population by Race/Ethnicity,

Oregon vs. United States, -

1990 -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Medicaid Recipients’ Share of Medicaid Spending, by Recipient Group, 1990 . . . . . 31

Status, Oregon vs. United States, 1990 ..; . . . . . . . . . 1... . . . . . . . . . 33

Tables

Page

2-1. Summary of Recent Federal Medicaid Mandates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

2-2. Mandatory and Optional Services Covered by the Oregon Medicaid

Program, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Chapter 2

Context of the Oregon Proposal

INTRODUCTION

Oregon’s Medicaid proposal is the State’s unique

response to the changing health care system. This

chapter will explore the context of the Oregon

proposal by reviewing the State’s demographic

composition and health status indicators, the dilemmas of the Medicaid program, and the problem of an

increasing uninsured population.

Population and Income

In 1990 the State of Oregon had approximately

2.8 million residents (278). Most lived in the

metropolitan areas in the western part of the State;

more than 68 percent resided in the Portland and

Salem county areas.

During the 1970s, the State underwent a major

population increase, growing by 26 percent, but in

the past decade growth has slowed dramatically

(figure 2-l). The populations of Portland and Salem,

however, continued to increase, by 23 and 33

percent, respectively, from 1980 to 1990.

Approximately 91 percent of the Oregon residents

are white, much higher than the national rate of 76

percent (277). While Oregon has fewer minorities

overall than the national average, it has a slightly

Figure 2-l—Resident Population, Percent Increase

1960-90

Percent increase 30

25

20

15

10

5

0

25.9

18.3

9.8

m.. .

7.9

1960-70 1970-80 1980-90

D United States EJ Oregon

DATA SOURCE: U.S. Department of Commerce, Bureau of the Census,

Sfatisti&l Abstract of the United States: 1991 (lllth

Edition) (Washington, DC: U.S. Government Printing

Office, 1991).

larger proportion of Native and Asian Americans

(figure 2-2)0

The median age of Oregonians is 34.5 years,

higher than the U.S. average of 32.6. Oregon’s

proportion of young residents is about the same as in

the country as a whole (25 percent under age 18), but

the State has a higher proportion of elderly residents

(14 vs. 12 percent age 65 and over in Oregon and the

United States, respectively) (278).

In 1989, Oregon’s median household income was

higher than the national average ($30,003 vs.

$28,910) (280), while per capita personal income in

both current and constant dollars was slightly less

than the national average ($13,422 vs. $14,948 in

current dollars) (283). Oregon’s average annual

growth of personal income between 1988 and 1989

was slightly higher than the national average (4.7 vs.

2.9 percent), but it was lower throughout most of the

1980s.

Over the 3 year period 1988-90, Oregon averaged

10,3 percent of persons in poverty, substantially

lower than the U.S. average (13.5 percent in 1990)

(282),

Health Status and Resources

By most measures of infant health, Oregon babies

are slightly better off than babies nationwide.

Compared with U.S. figures, Oregon has lower rates

of low-birth-weight infants, inadequate prenatal

care, and infant mortality (16 1). The number of

teenage pregnancies in Oregon is also relatively low

(11.4 per 1,000 live births to women under age 20,

ranking 25th in the Nation), although it has been

increasing recently, reversing the trend of the early

1980s (161).

Overall mortality rates (adjusted for differences in

age distribution) are also slightly lower in Oregon

than the national average. (Unadjusted mortality

rates are higher, since the population of Oregon has

fewer young adults (18 to 24 years old) and more

adults over age 65 than the national average) (278).

Oregon, however, has a higher (unadjusted) mortality rate for cerebrovascular disease, cancers, several

vascular disorders, and suicides. Some of Oregon’s

statistical advantage in health status indicators may

be due to its low proportion of racial minorities.

–27–
28 ● Evaluation of the Oregon Medicaid Proposal

Figure 2-2—Percent Distribution of Population by Race/Ethnicity, Oregon vs. United States, 1990

/ \

American

,Indian 1.3%

Hispanic 9.0%

OREGON UNITED STATES

DATA SOURCE: U.S. Department of Commerce, Bureau of the Census, “Census Bureau Completes Distribution of 1990 Redistricting Tabulations to States.”

press release, Washington, DC, Mar. 11, 1991.

Membership in a racial or ethnic minority in the

United States is associated with poorer overall infant

health measures and higher mortality rates associated with AIDS/HIV (acquired immunodeficiency

syndrome/human immunodeficiency virus), cancer,

diabetes, liver cirrhosis, and cardiovascular disease

(151,152).

Oregon has fewer hospitals and physicians per

capita than the national average. In 1990, the State

had 268 hospital beds per 100,000 residents, with an

occupancy rate of approximately 64 percent (6,209).

By comparison, the United States averaged 353

hospital beds per 100,000 persons and had an

average occupancy rate of 69.6 percent (6,209).

Oregon had 220 physicians per 100,000 individuals

(approximately one practicing physician per 455

Oregonians), compared with the national average of

240 physicians per 100,000 residents. About 80

percent of Oregon’s hospital beds, and about 80

percent of its practicing physicians, are located in

metropolitan areas (188).

MEDICAID IN THE UNITED

STATES AND OREGON

The Medicaid program was instituted to fill the

gaps of private health insurance by protecting

vulnerable populations otherwise unable to afford

coverage. The program is jointly funded by Federal

and State governments; however, each State administers its own program within Federal guidelines.

Eligibility

Medicaid originally covered certain “categorically eligible’ low-income groups: women and

children receiving Aid to Families with Dependent

Children (AFDC) and poor aged, blind, and disabled

persons receiving Supplemental Security Income

(SSI). Reforms in eligibility standards for Medicaid

since 1984 have broadened the population qualifying for coverage (table 2-1). Federal rules now

require States to extend Medicaid eligibility to

pregnant women and children under age 6 with

incomes up to 133 percent of the Federal poverty

level. Children born after September 30, 1983 who

are over 6 years old are eligible if their family

incomes are up to 100 percent of the Federal poverty

level. Thus, by 2002, all poor children under age 19

with incomes up to the Federal poverty level will be

covered. States must also extend coverage to families in AFDC-Unemployed Parent (AFDC-UP) programs, which provide welfare for two-parent families with one unemployed parent. States have the

option of expanding coverage to pregnant women

and infants up to age one with incomes up to 185

percent of the Federal poverty level.

The current Medicaid program in Oregon covers

the mandatory populations: aged, blind, and disabled individuals receiving SSI, AFDC families,

pregnant women and children under 6 years old with

incomes less than 133 percent of the Federal poverty level, and families with unemployed parents

receiving AFDC. It also covers the optional ‘ ‘medically needy’ population of children under 18 and
Chapter 2-Context of the Oregon Proposal ● 29

Table 2-l-Summary of Recent Federal Medicaid Mandates

Year Legislation and description

1984 Deficit Reduction Act (Public Law 98-369)

● Expanded coverage to include all pregnant women qualifying for Aid to Families with Dependent Children (AFDC) and

all children 5 and under with family income up to AFDC levels.

1986 Omnibus Budget Reconciliation Act (Public Law 99-272)

● Eliminated categorical restrictions for pregnant women.

● Allowed States to cover pregnant women and children up to age 5 with incomes up to 100 percent of the Federal poverty

level.

● Instituted “presumptive eligibility:” temporary coverage for prenatal care.

1987

1988

1989

1990

Omnibus Budget Reconciliation Act (Public Law 100-203)

. Allowed States to extend coverage to pregnant women and infants with incomes up to 185 percent of the Federal

poverty level.

● Allowed States to cover children under 5 up to the poverty level, with phase-in coverage for children under 8 in poverty.

. Instituted nursing home reform requiring States to:

1. Determine level of care for each patient,

2. Improve nursing aide training,

3. Institute pre-admission screening for mentally ill and mentally retarded patients, and

4. Comply with Federal standards.

Medicare Catastrophic Coverage Act (Public Law 100-360)

● Required States to pay Medicare premiums, deductibles, and repayments for qualified Medicare beneficiaries whose

income is up to 100 percent of the Federal poverty level and whose resources are up to two times the Supplemental

Security Income level.

. Instituted “spousal impoverishment” plan to protect the savings of noninstitutionalized spouses.

. Mandated Medicaid coverage of pregnant women and infants up to age 1 with incomes below 100 percent of poverty

by July 1990.

Family Support Act (Public Law 100-485)

● Required States to continue covering families losing AFDC benefits as a result of increased income for 12 months.

. Made AFDC-UP, coverage for two-parent families with one unemployed parent, mandatory.

Omnibus Budget Reconciliation Act (Public Law 101-239)

● Required States to extend Medicaid to all pregnant women and children born after September 30, 1983 up to age 6 with

incomes up to 133 percent of the Federal poverty level, superseding the Medicare Catastrophic Coverage Act.

● Set requirements for Early and Periodic Screening, Diagnostic, and Treatment Services (EPSDT), Medicaid’s

preventive care program for children under age 21.

Omnibus Budget Reconciliation Act (Public Law 101-508)

. Required States to gradually extend coverage to all children born after September 30, 1983 until they reach age 19 in

families with incomes below poverty.

● Required States to pay Medicare premiums for qualified Medicare beneficiaries with income levels between 100 and

110 percent of poverty by January 1993; the income level rises to 120 percent of poverty in January 1995.

. Allowed States to institute limited coverage for home care of elderly persons who would otherwise be institutionalized

and also fund home and community-based services for mentally retarded persons.

SOURCE: Office of Technology Assessment, 1992,

pregnant women who “spend down” into poverty

due to high medical bills. The State does not cover

the optional category of pregnant women and infants

with incomes between 133 and 185 percent of the

Federal poverty level.

The population concentration of Oregon is reflected in the Medicaid population. Of the more than

150,000 projected Medicaid enrollees for FY 1993,

fewer than one-third live in rural, nonmetropolitan

counties (182).

Benefits

Under Federal rules, all States must provide a

standard benefit package to the categorically needy

(those receiving AFDC and SSI benefits) that

includes: physician services, x-ray and laboratory

services, inpatient and outpatient hospital services,

family planning, home health care and skilled

nursing facilities for adults, rural health clinic services, nurse-midwife services, and Early and Periodic

Screening, Diagnosis, and Treatment (EPSDT) serv-
30 ● Evaluation of the Oregon Medicaid Proposal

Table 2-2—Mandatory and Optional Services Covered by the Oregon Medicaid Program, 1991

Mandatory Services

● Inpatient hospital services

. Outpatient hospital services

● Physician services

● Early and Periodic Screening, Diagnosis, and Treatment services for children under age 21

. Family planning services and supplies

. Laboratory and x-ray procedures

. Skilled nursing facility and home health care services for adults (i.e., 21 years and older)

. Rural health clinic services

. Services of certified nurse-midwives and pediatric and family nurse practitioners

. Service of federally qualified health centers receiving funds under sections 329, 330, or 340 of the Public Health Service Act

Optional Services Covered by Oregon

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Case management

Additional home health services

Services of other licensed practitioners, including psychologists, chiropractors, optometrists, podiatrists, and naturopaths

Clinic services

Other diagnostic, preventive, and rehabilitative services

Prescription drugs

Intermediate care facility services for mentally retarded persons

Eyeglasses, prosthetic devices, and orthopedic shoes

Private duty nursing

Inpatient psychiatric care for those under age 21 and care in institutions for mental diseases for adults aged 65 or eider

Physical, occupational, and speech, hearing, and language disorder therapies

Other medical or remedial care recognized under State law, including personal care in the home, transportation and emergency services,

home and skilled nursing facility care for those under age 21, and respiratory care services

Home or community-based services under a waiver

Respiratory care services for ventilator-dependent individuals

Services for persons aged 65 or eider in a mental institution

Transplant services (Oregon limits transplants to cornea and kidney for adults; for those under 21, Oregon rovers a professionally

determined range of nonexperimental transplant services)

Additional services for pregnant women: needs assessment, case management, nutritional counseling, and home services

Optional Services Not Covered by Oregon

. Dental care for adults

. Hospice services

. Preventive screening services for adults

. Christian Science nurses

. Organ transplants for adults (other than cornea and kidney)

a TO the ext~t they are authorized to praCkS IMKh state h Or re@dOn.

SOURCES: U.S. Department of Health and Human Serviees, Health Care Finanang Administration, Division of Intergovernmental Affairs, Medicaid Servicas

State by State, HCFA Pub. No. 02155-90 (Washington, DC: U.S. Government Printing Office, October 1990); Oregon Department of Human

Resources, Off&e of MedicaiAssistanee Program, Saiem, OR, “Mediet4d and the State of Oregon Medieal Assistance Programs,” (OMAP3061),

January 1991.

ices for children. States that cover the medically 2-2). The State currently covers prescription

needyl must also provide a benefit package for this only for SSI medically needy adults (177).

group that at minimum includes prenatal care and

delivery for pregnant women and ambulatory care

for children. States may supplement the standard

packages with an array of optional services.

In 1990, Oregon provided all mandatory services

and an additional 27 optional services (out of a

possible 31). Of the 27, 22 were provided for both

categorically and medically needy recipients. Oregon did not cover screening services, nursing

facilities for individuals over 65 in mental hospitals,

Christian Science nursing, or hospice care (table

Program Costs and Spending

drugs

Nationally, approximately 45 percent of Medicaid

funding comes from the States, with the remainder

provided by the Federal Government. By law,

individual States contribute from 17 to 50 percent of

their programs’ expenditures for services, depending

on the State’s per capita personal incomes. In fiscal

year (FY) 1991, 17 States contributed the maximum

match of 50 percent, and 14 States contributed less

than 30 percent (287). Oregon’s anticipated 1992-93

I ‘Ihe medically needy are individuals who are eligible for medical, but not fmncial, assistance (287).
Chapter 2-Context of the Oregon Proposal ● 31

State contribution will be 37.6 percent, or $278

million, a slight increase from its 1991 total of 36.5

percent (8,165).

Medicaid program costs, following national

health spending trends, have increased dramatically

over the last 20 years in all States. Increases have

been a result of both program expansions and health

care cost inflation. Since FY 1987, total Medicaid

expenditures have risen a minimum of 10 percent

annually (291). Total Medicaid spending in the

Nation, excluding administrative costs, was more

than $68 billion in FY 1990, a growth of almost 20

percent from FY 1989 (291). State Medicaid funding

grew 13 percent from 1988 to 1989 and 18 percent

from 1989 to 1990. In Oregon, State Medicaid

spending increased almost 19 percent from 1989 to

1990 (290).

One of the consequences of these increases is that

States have had difficulty predicting the programs’

costs accurately (147). In FY 1990, 26 States,

including Oregon, overspent their allotted Medicaid

budgets by $662 million (97). In FY 1990, total

Medicaid expenditures in Oregon increased to nearly

$541 million, of which approximately $200 million

was State-funded (290).

In 1991, Medicaid expenditures accounted for

almost 14 percent of the States’ budgets nationwide.

Compared with this average, Oregon spent a relatively low proportion of its budget on Medicaid—

slightly over 9 percent (147). This spending covered

services for approximately 227,000 State Medicaid

beneficiaries. Oregon’s average program cost per

Medicaid beneficiary was $2,283, lower than the

national average of $2,568 (290).

Despite federally mandated eligibility expansions

that have increased coverage for pregnant women

and children, a large portion of program spending

continues to be consumed by other beneficiaries.

The difference in spending for different groups of

beneficiaries is largely explained by Medicaid’s

major role in funding long-term care. Over 45

percent of nursing home care in 1990 was funded by

Medicaid. Persons aged 65 and over constituted 13

percent of the program’s population but consumed

over 34 percent of Medicaid dollars. From 1980 to

1990, long-term care spending increased by 10

percent, or $8.2 billion (207). In 1990, Oregon’s

Figure 2-&Medicaid Recipients’ Share of Medicaid

Spending, by Recipient Group, 1990

Percent 50 43.9 1

34.1

38.3

24.3

= Medicaid recipients ~~~~~ Medicaid dollars

NOTE: Percentages may not equal exactly 100 due to rounding error.

DATA SOURCE: U.S. Department of Health and Human Serviees, Health

Care Financing Administration, HCFA 2082 data from the

Statistical Report on Medical Care: Eligibles, Recipients,

Payments and Serwices, Section D (2), Eligibles for

Medical Care by Age, Race/Ethnieity, and Sex, Baltimore, MD: Health Care Financing Administration, Dec.

24, 1990.

proportion of Medicaid expenditures spent on longterm care was slightly higher than the national

average (40.9 vs. 38.6 percent) (290). Children in the

United States, for example, received less than 13

percent of total (Federal/State) Medicaid dollars in

1990, while they made up almost 44 percent of the

Medicaid population (figure 2-3).

State Responses

States have resorted to a variety of measures to

offset program expenditure increases resulting from

Federal mandates, health care cost inflation, and

other sources. Some have reduced optional benefits

and optional enrollee categories. For example,

Oregon eliminated all dental services for adults in

1991 due to budget constraints. Another common

cost reduction strategy has been to freeze or lower

reimbursement to providers. Upon 1981 changes in

the Federal Medicaid rules (Public Law 97-35), for

example, most States replaced their cost-based

retrospective hospital payment systems with some

form of prospective reimbursement.2 Broader use of

alternative delivery systems (e.g., those using some

form of managed care) also has become a common

strategy to constrain spending. By 1991, 47 States

used a prospective payment system for Medicaid

hospital services, and 23 States had implemented

2 In nearly half of these States, a method based on diagnosis-related groups (DRGs) is used (103). Ore.gom as well as 20 other States, reimburses

based on these diagnosis-specific, prospective rates (207).
32 ● Evaluation of the Oregon Medicaid Proposal

some form of prepaid managed care, covering nearly

900,000 beneficiaries (207,217).

A decade of payment controls has led to low

Medicaid reimbursement for many services. In

Oregon, for example, hospitals received only 59

percent as much for services rendered to Medicaid

patients as they received under Medicare in 1990

(the second lowest rate in the country after Illinois

(207). The so-called Boren Amendment provision of

the Omnibus Budget Reconciliation Act of 1981

(OBRA 1981, Public Law 97-35), however, requires

that hospitals and nursing homes be paid “reasonable and adequate rates. ’ As of April 1991, providers

in 21 States had sued for inadequate reimbursement.

The Oregon Association of Hospitals brought suit

against the State of Oregon in 1991. The two parties

reached an out-of-court settlement in which the State

agreed to pay approximately $64 million over a

2-year period to compensate for underpayment of

inpatient services provided to Medicaid patients

(156,157). About $24 million (36.6 percent) of the

settlement will come from State funds, in accordance with the State’s matching rate for Medicaid

program funding.

States have also commonly imposed limits on

covered benefits as a means of controlling costs.

These limits may be in the form of either copayments for services, caps on the number of physician

visits or days of hospitalization, or the need for prior

authorization for certain services. Twenty-two

States, including Oregon, require prior authorization

for procedures such as organ transplants and hemodialysis (203). Several States have at one point

limited office visits, home visits and emergency

room visits for nonemergencies. As of 1985, 35

States (not including Oregon) had used some form of

cost sharing (primarily copayments for prescription

drugs). 3

In addition to these widely used strategies for

program cost control, some States have cut back

optional services and eligibility categories to reduce

budget deficits. A survey of 32 States found that 6

States made both expansions and reductions in their

Medicaid programs for FY 1992. Eight States

reduced services and/or eligibility, 11 States expanded services and/or eligibility, and 7 States made

no changes (8). Illinois, for example, eliminated its

Aid to Medically Indigent Program, which was

completely funded by the State. Maine lowered its

medically needy income limit from 133 to 100

percent of the Federal poverty level and also reduced

the income limit for AFDC recipients (8,66). In

Oregon, the State cut coverage for nonpregnant,

AFDC-related adults under their medically needy

program and reduced coverage for medically needySS1 adults by restricting coverage to prescription

drugs only.

Several States have recently proposed even more

dramatic changes in their Medicaid systems. The

State of Maryland, for example, will soon require all

Medicaid recipients to have a personal primary

physician. This program is an effort to extend access

to preventive measures and limit the use of emergency facilities for routine care (82).

To complement their attempts at cost control,

States have also tried to increase their Federal

Medicaid resources. Some States, for example, have

augmented their Medicaid funds through the collection of ‘‘voluntary contributions’ and provider

taxes. By applying such funds to the State share,

States have been able to secure more Federal

matching funds. In some States, providers that

contributed regained some or all of their contributions in the form of increased Medicaid reimbursement (225, 226). The Federal and State governments

reached an agreement in November 1991 that

eliminates Federal matching funds for most provider

donations and provider-specific taxes (225,226).

Governors have also asked for some lenience in

complying with the Federal mandates. In February

1991, the National Governors’ Association (NGA)

asked for a 2-year delay in implementing the

changes from OBRA 1990 to give States sufficient

time “to assess the depth of the recession and the

opportunity to develop long-term solutions for the

restructuring of the Medicaid program’ (101). NGA

also resolved that the Health Care Financing Administration (HCFA) must publish final regulations before States should be required to implement changes.

THE UNINSURED

The Problem

For all of its rising costs, Medicaid has not solved

the problem of ensuring that Americans have financial access to health care. According to current

3 Some small cost savings have been realized, but there is no evidence regarding cost sharing’s effects on utilization (103).
Chapter 2---Context of the Oregon Proposal ● 33

70

60

50

40

30

20

10

0

Figure 2-4-Health Insurance Status,

Oregon vs. United States, 1990

Percent of Modulation with insurance type . .

10.8>. 0

mzz- &ibk!!2i

Private Medicare Medicaid Other Uninsured

_ Oregon ~~;] United States

SOURCE: S. Raetzman (cd.), Reforming the Hea/th Care System: State

Profiles 1990 (Washington, DC: American Association for

Retired Persons, 1991).

estimates, the uninsured population in the United

States in 1990 increased to 34.7 million, up from the

1989 estimate of 33.4 million (279,281). While there

has also been an increase in the proportion of the

population receiving Medicaid (from 8.6 percent or

21 million people in 1989 to 9.7 percent or 24

million in 1990), many poor people still lack

insurance coverage.

Nonetheless, 59 percent of the Americans that

lack insurance coverage are employed or dependents

of employed persons (279). Many of the uninsured

workers are either self-employed or work for small

companies with fewer than 25 employees (60). Other

uninsured individuals lack coverage because of

preexisting conditions and their inability to either

qualify or pay for private coverage. About 14 percent

of all children aged 17 years old and under lack any

form of health insurance coverage (279).

The rising number of uninsured persons has

become a prominent issue in the national health care

debate. Existing proposals for providing and funding

their care include such ideas as expanding public

programs, tax break options, universal access to

health insurance or services, and an employermandated ‘‘pay-or-play’ system (26,49,61,65). Increased coverage, however, will probably increase

costs further. Some observers have suggested that

eventually the United States must ration services to

reduce health care spending (l), although not all

share this view (126,214).

Oregon has reason to reflect the national mood of

concern. In 1988, the most recent year for which

equivalent data are available, Oregon’s rate of

uninsured persons was higher than the national

average (15.6 vs. 14.1 percent) (figure 2-4). Oregonians are more likely to be covered by private

insurance, but they are slightly less likely to be

covered by Medicare or Medicaid than are U.S.

residents in general (209).

Oregon estimates that at present approximately

400,000 to 450,000, or 16 percent, of its residents

lack any health insurance coverage (177) . Approximately two-thirds of these uninsured persons are

employed (or dependents of employed persons) and

one-third have incomes that fall below the Federal

poverty level. A 1986 study of uninsured individuals

in Oregon determined that the typical uninsured

Oregonian was a female, single parent, poorly

educated, and employed in retail or service for a

small, non-union company (199).

Concern for the uninsured population stems from

some evidence that lack of insurance decreases

health care access (71). For example, Hadley et al.

determined that an individual’s condition on hospital admission, use of resources during hospitalization, and likelihood of death all varied according to

health insurance status (71). In this study, uninsured

people were more likely to be admitted for conditions with a relatively high expected risk of death

and less likely to have discretionary procedures

performed. Researchers have also shown that uninsured individuals have shorter average lengths of

hospital stay and fewer physician visits per year

(89,228).

A recent study has also associated newborns’

insurance coverage with resource allocation in

hospitals. Newborns without insurance received

fewer services than Medicaid-covered newborns,

who in turn received less care than privately insured

newborns (22).

The tendency of those without insurance to delay

treatment and to not receive preventive care may

lead to poorer health outcomes in this population

(50). Loss of Medicaid benefits has been shown to

adversely affect both the access to care and the

health status of poor adults with diabetes and

hypertension (132). Although the evidence support-
34 ● Evaluation of the Oregon Medicaid Proposal

ing the link between poorer health and uninsuredness is strong, it is not definitive.4

Barriers to State Solutions

A few States have implemented ambitious programs to address the problems of their uninsured

populations. Hawaii, for example, requires all employers to provide health insurance to their employees. Employees who work at least part time qualify

and share the costs of their coverage (128). Hawaii

has also developed a program for citizens who have

fallen through the gap of the employer-based coverage and the Medicaid program. The State Health

Insurance Program is subsidized by both the State

government and private insurance companies. It

provides care to approximately 30,000 individuals

who are mostly dependents of low-income workers

and seasonal workers (128).

In 1988, Massachusetts passed a universal health

bill which included an employer mandate that would

have required employers to provide insurance or pay

into a fund for their workers. However, implementation of the law has been delayed and is in jeopardy

of being repealed (20). Since 1990, about one-fifth

of the States, including California, New Jersey, and

Oregon, have begun to offer or have considered

enacting tax credit programs to small employers

providing coverage. In addition, almost 40 percent

of the States have enacted high-risk pools for

individuals who cannot obtain health insurance due

to chronic illness or other ‘‘preexisting” conditions

(139).

Solutions for reducing the uninsured population

such as these depend primarily on State financing.

Increasingly, however, States have cited limited

funds, their duty to maintain balanced budgets,5 and

overall fiscal distress as impediments to expanding

such programs. Several factors have influenced the

States’ overall financial outlook. According to NGA

and the National Association of State Budget

Officers (NASBO), the Federal Government has

decreased its aid to cities and States, which has

placed a higher burden on the States to help local

governments (147). NGA and NASBO also claim

that many States used increased revenue from the

mid-1980s to implement new programs; however,

once revenue growth slowed in the late 1980s and

1990s, many States began to use reserves to fund

ongoing programs.

In an effort to end FY 1991 with balanced

budgets, 29 States cut almost $7.5 billion from their

budgets. Oregon cut a total of $40.6 million (147).

The total year-end balance for FY 1991, the amount

of resources States have available at the end of the

fiscal year, was at the lowest level since 1983 (147).

The national total year-end balance as a percent of

expenditures was 1.5 percent. Only 15 States, mostly

concentrated in the mid- and far west, had balances

of 5 percent or more, while 19 States had balances of

less than 1 percent (147). Oregon was one of the 15

States with relatively large balances.

The national economy has been in a recession:

unemployment rates have risen, personal income

growth has slowed, and State balances are at an

all-time low (147). According to NGA and NASBO,

the recession has hit the Eastern States the hardest,

while the Western States have been somewhat less

affected (147). According to NGA and NASBO,

Oregon leads the West in spending growth,6 and

personal income growth in that region continues to

be the highest in the Nation. Nonetheless, NGA and

NASBO conclude that decreases in the State ending

balances “[place] all the States at an increased risk

(for budget shortfalls) should the economic recovery

be stalled for long” (147).

Oregon’s funding problems may deepen as a

result of a statewide referendum passed in November 1990. Ballot Measure 5 phases in a rollback of

local property taxes over 5 years, and it requires the

State to replace billions of dollars lost by local

counties for school funds from the State’s general

fired. The referendum is expected to result in a tax

loss of $540 million in the 1991-93 budget cycle,

$1.7 billion in the 1993-95 biennium, and $2.9

billion in the 1995-97 budget cycle (185). The

Governor’s office expects the State to have $3.1

billion for all expenditures other than schools in the

1991-93 budget cycle, $2.6 billion in 1993-95, and

$1.9 billion in 1995-97 (269).

Because of Measure 5, Oregon’s tax burden will

fall considerably. In FY 1989, Oregon ranked 22d in

per capita tax collections ($1,806 in Oregon vs.

4 An ongoing OTA study is examining the relationship between insurance coverage and access to care.

S Forty-nine States am required by their State constitutions to balance their budgets (147).

s Spending growth is defined here as an increase in the amount spent by States’ general funds.
Chapter 2-Context of the Oregon Proposal ● 35

$1,888 in the United States). Under full implementation of Measure 5, Oregon’s ranking will most likely

fall to the bottom fifth of the Nation (185).

By law, the State of Oregon must balance its

budget; therefore, the State must either cut the

budget or increase taxes to compensate for the new

obligation to replace local revenue losses. Since 84

percent of the State’s general fund is already

supported by personal income taxes, the passage of

Measure 5 has encouraged discussion about restructuring Oregon’s tax system, including instituting a

sales tax (122).

Oregon’s Efforts To Expand

Health Care Access

In 1987, the Oregon State legislature voted to end

Medicaid coverage for organ transplants, an optional

service. These funds were intended to be used

instead to cover another optional service-prenatal

care for approximately 1,200 pregnant women and

basic care for 1,800 children under the poverty level

medical program (225).7 Oregon’s decision became

highly publicized when two children were denied

transplants. One infant’s family moved out of the

State to receive the transplant. The family of the

other child, a 7-year-old boy with leukemia, attempted to raise the funds, but the child died before

his family’s efforts to raise $100,000 for the

operation succeeded. (At the time of his death the

boy was not medically eligible for the procedure

(79,84,225 ).)

Following the transplant debate, Oregon Health

Decisions (OHD), a nonprofit organization, held a

series of 19 community discussions on priorities for

health care.8 A “Citizen’s Parliament” summarized

the results of the community deliberations and

issued 15 principles that were then used to form lists

of health services, ranked in order of importance, for

4 distinct age groups (i.e., infants, children, adults,

and elderly). Another group, composed primarily of

medical and legal experts, compiled the four lists

into one prioritized list that was intended to inform

“the State legislature, insurance companies, and

others concerned with health care resource allocation’ (186). A report including the list and accompanying actuarial estimates was submitted to the

Oregon State legislature. This report and another

report from the Governor’s Commission on Health

Care were the roots of the Oregon effort to reform

health care.

Oregon’s recent effort to extend health insurance

coverage to its citizens is a compilation of several

pieces of State legislation targeted at various groups

of uninsured Oregonians. Several of the principles

developed by the OHD’s Citizen’s Health Care

Parliament are incorporated into this package of

health care legislation.

The Health Partnership Act (Senate Bill (SB) 935)

provides tax credits to small businesses that have not

previously provided health insurance coverage to

their employees. By 1995, all employers must either

provide coverage to their employees or pay into a

pool that would provide coverage. If 150,000 people

gain insurance between 1989 and 1993, then employer coverage will remain voluntary. The State has

committed to making health insurance more affordable to small employers through the Health Insurance

Reform Act (SB 1076). Oregon also hopes to

provide statewide health care cost data to providers

through the Health Resources Commission Act (SB

1077).

Persons who do not qualify for Medicaid and

cannot obtain insurance because of preexisting

health conditions are covered under the State Health

Risk Pool Act (SB 534), which mandates that

coverage be available to these individuals at a

premium rate no higher than 150 percent of the rate

for other individuals.

Finally, the Oregon Medicaid Demonstration Act

(SB 27) expands coverage to all individuals with

incomes below the Federal poverty level by: 1)

funding a prioritized list of medical services, 2)

instituting managed care programs in all service

areas, and 3) ensuring adequate payment to providers (177). This proposal, which requires Federal

approval to qualify for Federal Medicaid matching

funds, is the subject of the remainder of this report.

7 See glossary for definition of poverty level medid.

s OHD had earlier conducted 300 community meetings throughout the State to discuss health cam access, cost control measures, allocation of public

funds, disease prevention and patient autonomy and dignity (43).
Chapter 3

The Prioritized List

Contents

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

THE PRIORITIZATION METHOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Step 1: Creating the List of CT Pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Step 2: Gathering Information on Treatment Benefit, Duration of Benefit,

and Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Step 3: Ranking Categories of Health Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

Step 4: Placing CT Pairs in Service Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Step 5: Ranking CT Pairs Within Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Step 6: Final Line-by-Line Review of CT Pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Defining “Basic Health Care” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Future Changes to the Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

DETERMINANT’S OF CT PAIR PLACEMENT ON THE PRIORITIZED LIST . . . . . . 51

Effect of Adjustment of the List by the HSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Determinants of Final Placement of CT Pairs on the List . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Characteristics of the List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

CRITIQUE OF THE PRIORITIZATION PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Completeness of the Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Appropriateness of Aggregation of Conditions and Treatments Into CT Pairs . . . . . . . . 64

The Use of Categories in Prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66

Accuracy of Outcomes Information Supplied by Clinicians . . . . . . . . . . . . . . . . . . . . . . . . . 66

Use of Health Outcomes Information To Place CT Pairs Into Categories . . . . . . . . . . . . 68

Incorporation of Oregonians’ Health State Preferences Into the

Measurement of Treatment Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Incorporation of Community Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Factors the HSC May Consider When Issuing Another Prioritized List in 1993 . . . . . . 73

The Implications of Integrating Additional Services Into the Prioritized List . . . . . . . . . 74

EVALUATING THE PRIORITIZED LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Clinical Critique of the Prioritized List

. . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74

SUMMARY AND CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......76

The Prioritization Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Determinants of CT Pair List Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Critique of HSC Prioritization Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Clinical Critique of the Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

(continued on next page)
Contents-Continued

Boxes

Box Page

3-A. Examples of Condition-Treatment Pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

3-B. ICD-9-CM and CPT-4 Coding of Chronic Otitis Media

Condition-Treatment Pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

3-C. Prioritization Using a Cost-Effectiveness Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

3-D. Weights Associated With Functional Limitations and Symptoms Included

on Oregon’s Telephone Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4

3-E. Calculating Net Benefit Using the Example “Chronic Otitis Media--Eustachian

Tubes/Tonsillectomy and Adenoidectomy/Tympanoplasty” . . . . . . . . . . . . . . . . . . . . . . 45

3-F. The 17 Service Categories Used in the Prioritization Process . . . . . . . . . . . . . . . . . . . . . 46

3-G. Health Care Values Elicited at Community Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

3-H. Listing of the “Essential” Condition-Treatment Pairs Moved

Below Line 587 and CT Pairs “Valuable to Certain Individuals”

Moved Above Line 587 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

3-I. Condition-Treatment Pairs Whose Coverage Status Changes

as a Result of Ranking Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

3-J. The 27 Condition-Treatment Pairs Affecting Children That Fall

Below Line 587 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

3-K. The 10 Condition-Treatment Pairs “Primarily or Only” Affecting

Women That Fall Below Line 587 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Figures

Figure Page

3-1. Relationship of Category Assignment and Net Benefit With Condition-Treatment

Pair Rank for the Adjusted and Unadjusted Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

3-2. The Relationship Between Net Benefit and Rank Within Categories

for the Adjusted List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

3-3. Median Net Benefit by Category and Quartile Within Category . . . . . . . . . . . . . . . . . . . 60

Tables

Table Page

3-1. Condition-Treatment Pair Rank by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

3-2. Effect of List Adjustment on Location of Condition-Treatment Pairs . . . . . . . . . . . . 52

3-3. Condition-Treatment Pair by Category and Location on the List . . . . . . . . . . . . . . . . . 56

3-4. Net Benefit Scores by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

3-5. Correlation Between Order of Condition-Treatment Pairs Within Categories

If Determined by Rank or by Net Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

3-6. Net Benefit by Rank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

3-7. Condition-Treatment Pair Age Cohort by Rank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3-8. Condition-Treatment Pair Age Cost Interval by Rank . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3-9. Provider and Specialty Groups Submitting Health Outcomes Data to

the Health Services Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

3-10. Functional Limitation and Health State/Symptom Weights, Standard Deviations,

and 95 Percent Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

3-11. Differences in Oregon’s Preference Weights by Medicaid Status, Poverty,

Race/Ethnicity, Age, Sex, Experience With Problem,

and Metro/Nonmetro Residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....*..** 71
Chapter 3

The Prioritized List

INTRODUCTION

Central to Oregon’s proposed Medicaid demonstration project is a list of 709 health services,

prioritized by relative importance considering public preferences and values. The impetus to systematically prioritize health services can be traced to the

public debate following the Oregon legislature’s

decision in 1987 to reallocate Medicaid funds away

from expensive organ transplants that benefit relatively few and toward expanded access to prenatal

care. With the passage of the Basic Health Services

Act in 1989, the legislature committed itself to

further expansions in access to health care, and set

in place a process to ‘‘rationally’ define health

benefits. 1

Oregon’s efforts to prioritize health services

coincide with a new national focus on health care

effectiveness and outcomes research. The U.S.

Agency for Health Care Policy and Research (AHCPR),

for example, is supporting medical outcomes research and health care guideline development in an

effort to promote quality care and identify and limit

use of ineffective services (295). While AHCPR is

supporting focused research on particular conditions

or treatments using traditional approaches (e.g.,

meta-analysis, analysis of geographic variation),

Oregon’s appointed Health Services Commission

(HSC) used a novel approach to evaluate virtually all

medical treatments in less than 2 years.

Understanding the strengths and weaknesses of

Oregon’s prioritization of health services is important because it represents the first attempt to broadly

apply cost-effectiveness analysis to health resource

allocation decisionmaking. A careful analysis of the

process used to generate the list and of the “reasonableness’ of the relative order of specific items on

the prioritized list is important because under the

demonstration, the Medicaid benefit ‘‘package’

could change during the demonstration-i. e., the

coverage line initially set to include the first 587

conditions and their associated treatments could

move up or down the list according to the availability of resources.

The remainder of this chapter is divided into five

sections. The first section provides a detailed

description of the HSC’s prioritization process. The

second section discusses the relative importance of

various steps in the process. Section three provides

a critique of the process and discusses its strengths

and weaknesses. The fourth section focuses on the

prioritized list itself and discusses its merits, irrespective of the process used to generate it. The final

section summarizes OTA’s findings and conclusions.

THE PRIORITIZATION METHOD

As part of the Basic Health Services Act, a Health

Services Commission* made up of health care

providers and consumers was charged with preparing:

. . . a list of health services3 ranked by priority, from

the most important to the least important, representing the comparative benefits of each service to the

entire population to be served (Senate Bill [SB] 27).

The HSC was given little guidance on how to

prioritize, but was directed to:

. . . actively solicit public involvement in a community meeting process to build a consensus on the

values to be used to guide health resource allocation

decisions (SB 27).

The HSC completed its charge and on May 1,

1991 issued a prioritized list of 709 services,

following nearly 2 years of deliberation. Several

prioritization methods were considered by the HSC,

and a preliminary list based on a cost-effectiveness

approach issued in May 1990 reflected its work in

progress.

i Ch. 2 includes a discussion of the Oregon legislature’s 1987 transplant decision and subsequent State activities that led to the inclusion of

prioritization in the Basic Health Services Act.

2 The 11 HSC members responsible for developing the 1991 prioritized list included 5 physicians (including 1 doctor of osteopathy), 4 health care

consumers, a public health nurse, and a social service worker. Members are appointed by the Governor and confiied by the Senate.

3 A health service was defined as “an intervention related to a specific condition expected to maintain and/or restore an individual’s health or

well-being. Each health service listed is presumed to include all necessary ancillary and supportive services’ (193). Health services include: provider

services and supplies, in- and outpatient hospital services, and health promotion and disease prevention services.

-39-
40 ● Evaluation of the Oregon Medicaid Proposal

The HSC used both formal (e.g., collection and

evaluation of data) and informal (e.g., judgment

calls) methods to rank order a comprehensive list of

health care treatments. Six steps were used to create

and rank the list:

1.

2.

3.

4.

5.

6.

The HSC, with input from health care provider

groups, created a list of 709 “conditiontreatment” (CT) pairs using diagnostic and

procedure codes.

For each CT pair, the HSC gathered information on treatment benefits and costs associated

with that pair.

The HSC ranked 17 categories of services

(e.g., acute fatal, treatment prevents death and

facilitates full recovery; preventive care for

children) according to societal values elicited

at public meetings. It used a group consensus

method to reach agreement on the category

rankings.

The HSC put each CT pair into one service

category, considering such factors as the

expected outcome given treatment and whether

the condition was acute or chronic.

Within each category, CT pairs were ranked

according to the expected net benefit of

treatment.

Finally, in a line-by-line review, the HSC

examined each CT pair’s public health impact,

treatment-related outcome and cost, and relation to health care values expressed at community meetings. Based on this review, the HSC

selectively moved items up or down the list.

Each of these steps is described in detail below.

To clarify Oregon’s method, an example of a CT pair

from the prioritized list is provided:

. . . chronic otitis media (i.e., inflammation of middle

ear) -eustachian tubes/tonsillectomy and adenoidectomy/tympanoplasty [ranked 355 of 709 CT

pairs].

Step 1: Creating the List of CT Pairs

Fifty volunteer provider groups4 coupled disease

and procedure codes5 to generate an initial list of

approximately 1,600 CT pairs to be ranked. Through

the use of broad diagnostic and treatment groups, the

HSC was able to reduce the original list of 1,600 CT

pairs to 709 CT pairs, a selection of which is shown

in box 3-A. (The full list is included in app. D.) CT

pairs only include treatments because all medically

reasonable diagnostic services would be covered

under the demonstration.

In some cases, the HSC grouped disease codes

together into one CT pair when treatment of different

diseases were believed to have similar costs and

outcomes. Conditions are usually broadly defined

and include several specific ICD-9-CM codes.6 For

example, all forms of muscular dystrophy are

included in one CT pair (line 506).

Treatments were also broadly defined. In fact,

more than one-half (51 percent) of the CT pairs have

the treatment specified as “medical therapy” or

‘‘medical and surgical treatment. ’ Medical therapy

includes any non-procedure-related care, such as

office care, general inpatient care, and ancillary

services (120).7

Many conditions are listed multiple times with

different procedures. Chronic otitis media, for example, is listed twice: once with specific procedures

and again with medical therapy. The specific conditions and treatments included in the two CT pairs

related to the care of chronic otitis media are shown

in box 3-B.

Step 2: Gathering Information on Treatment

Benefit, Duration of Benefit, and Cost

For each CT pair, the HSC gathered information

regarding:

. the expected net benefit of treatment,

● the duration of treatment benefit, and

q Provider groups represented most licensed practitioners in the State including, for example, the professional societies of dermatologists, surgical

subspecialists, and acupuncturists (see table 3-9).

s The following coding manuals were used to ideatify conditions: International Classification of Diseases, 9th Revision, Clinical Modification

(ICD-9-CM); and the Diagnostic and Statistical Manual of Mental Disorders, Third Edition (DSMMD-3). The Physician Current Procedural

Terminology, Fourth Edition (CFT-4) codes were used to identify treatments. The American Dental Association codes were used for dental conditions

and treatments.

6 ICD.9.CM codes c~ss@ c~c~ conditio~ ~d dis~e d~~tions.

7 Medical therapy includes ancillary services such as “hospital services, laboratory services, prescription drugs, radiology, medical supplies,

therapies, vision and hearing services, medical transportation, case rnanagemen~ home health services, and hospice services, which are provided, if they

are medically necessaq to the treatment of the condition” (193).
Chapter 3--The Prioritized List ● 41

Box 3-A—Examples of Condition-Treatment Pairs

Rank Condition Treatment

1 Pneumococcal pneumonia, other bacterial pneumonia, Medical therapy

bronchopneumonia, influenza with pneumonia

50 Acute myocardial infarction Medical therapy

100 Injury to blood vessels of the thoracic cavity Repair

150 Diabetes mellitus, Type I Medical therapy

200 Diseases and disorders of aortic valve Aortic valve replacement,

valvuloplasty, medical therapy

250 Atrial septal defect, secundum Repair septal defect

300 Congenital hydronephrosis Nephrectomy/repair

350 Open wounds Repair

Rheumatoid arthritis and other inflammatory polyarthropathies Medical therapy

450 Deformities of foot Fasciotomy, incision, repair,

arthrodesis

500 Cancer of esophagus, treatable Medical and surgical therapy

550 Dental services (e.g., insufficient room to restore tooth) Restorative dental service

600 Absence of breast after mastectomy as treatment for neoplasm Breast reconstruction

650 Oral aphthae Medical therapy

700 Gynecomastia Mastopexy

709 Anencephalous and similar anomalies and reduction Life support

deformities of the brain

SOURCE: Oregon Health Services Commission “Prioritized Health Services LisL” Sale@ OR May 1, 1991.

. treatment-associated costs. scribed patient outcomes in terms of these health

These three pieces of information were initially states an-d the public expressed their opinions about

components of a cost-effectiveness formula used to experiencing these same health states during the

rank CT pairs on a preliminary list. (The attempt to survey. A treatment’s net benefit reflects both

rank CT pairs by the cost-effectiveness formula is clinicians’ estimates of treatment effects and condescribed in box 3-C.) The initial attempt to rank CT sumers' perceptions of the desirability of experiencpairs according to cost-effectiveness was abandoned ing those effects.

and only one component of the initial formula, the

expected net benefit of treatment, was important to

the final ranking methodology.

Expected Net Benefit of Treatment

The HSC measured CT pair “net benefit” in

terms of how treatment changes ‘‘quality of life”

for the typical patient within a CT pair. To assess

treatment-related changes in quality of life, clinicians estimated the probability of dying or experiencing various ‘‘health states” (i.e., symptoms or

functional limitations) for patients treated and not

treated for the specified condition. These estimates

were then ‘‘weighted’ according to public opinions

elicited from a telephone survey of Oregon residents. Information from clinicians and the public

could be combined because they had as a common

element a list of 29 health states. Clinicians deClinician Outcome Information--Groups of CT

pairs were assigned to one of the 50 volunteer

provider groups. These groups represented most

State-licensed practitioners and included the professional societies representing physicians (e.g., internal medicine, dermatology, surgery and surgical

subspecialties) and other practitioners (e.g., chiropractors, acupuncturists). For each CT pair, the

provider groups estimated for two hypothetical

cohorts-patients with and without treatment-the

probability in 5 years of being in the following five

states (the probabilities adding to 1):

1. Perfect health,

2. Morbidity state 1,

3. Morbidity state 2,

4. Morbidity state 3, and

5. Dead.
42 . Evaluation of the Oregon Medicaid Proposal

Box 3-B—ICD-9-CM and CPT-4 Coding of Chronic Otitis Media Condition-Treatment (CT) Pairs

ICD-9-CM code and description CPT-4 code and description

CT pair 355--Chronic Otitis Media Eustachian tubes/

381.5: eustachian salpingitis tonsillectomy and adenoidectomy/

381.6: obstruction of eustachian tube tympanoplasty

381.7: patulous eustachian tube 42820: tonsillectomy and adenoidectomy; under age

382.1:chronic tubotympanic suppurative otitis media 12

382.2: chronic atticoantral suppurative otitis media 69400: eustachian tube inflation, transnasal; with

382.3: unspecified chronic suppurative otitis media catheterization

69401: same as 69400, but without catheterization

69405:eustachian tube catheterization, transtympanic

69410: focal application of phase control substance,

middle ear (baffle technique)

69631: tympanoplasty without mastoidectomy

(including canalplasty, atticotomy and/or

middle ear surgery), initial or revision;

without ossicular chain reconstruction

6%32: same as 69631, but with ossicular chain

reconstruction, (e.g., postfenestration)

69633: same as 6%31, but with ossicular chain

reconstruction and synthetic prosthesis (e.g.,

partial ossicular replacement prosthesis (PORP),

total ossicular replacement prosthesis (TORP))

CT pair 397--Chronic Otitis Media Medical therapy

381.5: eustachian salpingitis 90000-99999: all medicine CPT codes (excludes

381.6: obstruction of eustachian tube anesthesiology, surgery, radiology, and

381.7: patulous eustachian tube pathology and laboratory procedures)

382.1: chronic tubotympanic suppurative otitis media

382.2: chronic atticoantral suppurative otitis media

382.3: unspecified chronic suppurative otitis media

SOUR(ZB: Ameriean Medical &SOaatl “ “OQ PhysicWs’ Current Procedural Terminology, Fourth Edition, (CPT-4)@ieago, IL: AMA, 1990);

Oregon Health Serviees Commis sionj Saleq OR “Prioritized Health Serviees LisL” May 1, 1991; World Health Oq@zatiow

International Clas@fication of Diseases, 9th Edition, Cliru”cal Mod#ications (Ann Arbor, MI: Edwmds Brothcxs, Inc., 1980).

Providers described the three morbidity states pain in ear or trouble hearing, and having trouble

using six functional limitations and 23 symptoms learning, remembering or thinking clearly).

(box 3-D).89 Children with chronic otitis media who

undergo a middle ear procedure, for example, were

assessed to have a much higher probability of being

in perfect health in 5 years than untreated children

(0.91 vs. 0.50), and to be less likely to experience

functional limitations and symptoms (see box 3-E).

Providers described this particular condition using

one functional limitation (being limited in usual

recreational activities) and two symptoms (having

Public Opinion About the Functional Limitations and Symptoms—Public opinions regarding

the health states (i.e., the six fictional limitations

and 23 symptoms) were obtained through a randomdigit-dialed telephone survey of 1,001 Oregon

residents. Survey respondents were asked to imagine

themselves to be permanently affected by the

functional limitations or symptoms and to rate the

g The fictional limitations and symptoms were adapted from those on a quality of well-being instrument developed by R.M. Kaplan and colleagues

(106).

9 Providers could select up to one symptom and three functional limitations (one from each category—mobility, physicaL social) for each morbidity

state. If more than one symptom could be assigned to the morbidity state, providers selected the chief complaint associated with the condition.
Chapter 3-The Prioritized List c 43

Box 3-C--Prioritization Using a Cost-Effectiveness Formula

A “cost-effectiveness” formula was used to order a preliminary prioritized list in May 1990:

C/(NB X D),

where C = treatment cost; NB = net benefit of treatment or the expected change in patients’ “quality of life” with

treatment; and D = expected duration of treatment benefit (in years).

Treatment Costs

Estimates of the costs associated with a given condition-treatment (CT) pair (e.g., hospital, ancillary services,

pharmacy, etc.) were based on information from the Oregon Medicaid Management Information System. Clinicians

provided additional cost data as needed. Cost estimates were usually intended to include those anticipated over the

remaining life of the patient. For treatments without a lifetime benefit, costs were estimated for the expected duration

of the treatment benefit (e.g., hip replacements confer a benefit for about 10 years). Each CT pair was assigned a

cost, which was the midpoint of 1 of 14 cost ranges.

Treatment Net Benefit

A treatment’s net benefit was estimated using clinical prognostic data and public opinions regarding a set of

functional limitations and symptoms. (See description in text.)

Duration of Treatment Benefit

The duration of benefit was expressed in years. If a treatment had a lifetime benefit, the duration of benefit

would be the remaining life expectancy (life expectancy was set at 75 years). If a treatment’s effect was short-term,

benefit duration was defined as the period until the next treatment would be required (e.g., hip replacements confer

benefit for about 10 years). Provider panels estimated the median age range of diagnosis for each condition and the

midpoints of the ranges were used in estimating duration of benefit.

Applying the Cost-Effectiveness Formula

The cost-effectiveness formula values for the “chronic otitis media-eustachian tubes/

tonsillectomy and adenoidectomy/tympanoplasty" CT pair areas follows:

Formula terms Formula values

Treatment cost (C) . . . . . . . . . . . . . . . . . . . . . . . . . $1,500

Net benefit of treatment (NB) . . . . . . . . . . . . . . . . .241

Duration of treatment benefit (D). . . . . . . . . . . . . 69 years

According to the formula, C /(NB X D), the value for “chronic otitis media--eustachian tubes/tonsillectomy and adenoidectomy/tympanoplasty” would be 90.20 (i.e., $1,500 per 16.63 quality-adjusted life years).

The value 90.20 can be interpreted as the cost of adding 1 quality year of life associated with procedures for chronic

otitis media.

SOURCE: OftIce of Technology Assessment 1992.

limitation/symptom on a scale from zero, which is “best” health state as 90 and rated “trouble

“as bad as death,” to 100, which represents ‘‘good

health.” 10 Early in the interview, respondents were

asked to rate a “best” health state described as

“having no restrictions on movement or activity,

and no health problems.’’11 Weights for each symptom12 were calculated as an average of the difference

between ratings of the “best” health state and each

symptom. If, for example, an individual rated the

talking’ as 72, the difference between the “best”

health state and a health state including “trouble

talking” would be 18 (i.e., 90 – 72). This value

represents one individual’s perception of the amount

taken away from “best” health if he or she had

trouble talking. The weights for each health state are

shown inbox 3-D. (As shown in the box, the average

ratings were divided by 100 so that they could be

10 smptom~ were pmwnt~ t. ~spondents one at a tie, but functional limitations were presented in COmbfitiOn (e.g., respondents -Y ~ve ~

asked to rate simultaneously having a mobility, physical activity, and a social activity functional limitation).

11 seventy-eight ~rwnt of respondents gave a value of 100 to the best health state.

12 FmctiO~ ~~tion and ~ptom ~e@ts ~~e ~~cu~ted somew~t ~er~fly. FUIICtiO~ s~t~ were pr~ated to the respondents k a IMXtCd

format-respondents rated having three functional limitations, then two of the three, and then just one. The weight for functional state C, for example,

was calculated by subtracting the value for having functional states A and B from the value of having functional states A, B, and C.
44 ● Evaluation of the Oregon Medicaid Proposal

Box 3-D-Weights Associated With Functional Limitations and Symptoms Included on

Oregon’s Telephone Survey

Survey item Weight

Functional limitations

Mobility

Ml. Have to stay at hospital or nursing home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.049

M2. Cannot drive a car or use public transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.046

Physical activity

PI. Have to be in bed or in a wheelchair controlled by someone else . . . . . . . . . . . . . . . . . . . . . . . . . -0.560

P2. Have to use a walker or wheelchair under your own control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.373

Social activity

S1. Need help to eat or go to the bathroom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.106

S2. Are limited in the recreational activities you may participate in . . . . . . . . . . . . . . . . . . . . . . . . . . -0.062

Health states/symptoms

H1.

H2.

H3.

H4.

H5.

H6.

H7.

H8.

H9.

H1O.

H1l.

H12.

H13.

H14.

H15.

H16.

H17.

H18.

H19.

H20.

H21.

H22.

H23.

Have losses of consciousness from seizures, blackouts, or coma . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a bad burn over large areas of your body . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have drainage from your sexual organs and discomfort or pain . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble learning, remembering or thinking clearly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed or broken leg, but you have

no other limitations on activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a painful or weak condition of the back or joints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain while you are urinating or having a bowel movement . . . . . . . . . . . . . . . . . . . . . . . . .

Have stomach aches, vomiting or diarrhea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience a lot of tiredness or weakness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cough, wheeze or have trouble breathing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are often depressed or upset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have headaches or dizziness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have an itchy rash over large areas of your body . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble talking, such as a lisp, stuttering or hoarseness . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain or discomfort in your eyes or vision problems that corrective lenses can’t fix . . . .

Are overweight or have acne on your face . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain in your ear or trouble hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are on prescribed medicine or a prescribed diet for health reasons . . . . . . . . . . . . . . . . . . . . . . . .

Wear glasses or contact lenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble falling asleep or staying asleep . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with sexual interest or performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Can’t stop worrying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with the use of drugs or alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-0.114

-0.372

-0.325

-0.367

-0.253

-0.253

-0.299

-0.370

-0.275

-0.318

-0.326

-0.305

-0.297

-0.188

-0.248

-0.215

-0.217

—1

-0.055

-0.248

-0.276

-0.215

-0.455

1 me HSC ~i~~ v~ue of O to ~s ~~ s~e b~~ it ~ou@ its use doubl~o~~ mofiidity =kted with COllditiOIIS d

because it did not consider taking medications a serious problem (243). lhe weight as calculated from the survey was -0.123.

SOURCE: Oregon Health Services Commissio% Sal~ OR “Prioritized Health Services List” May 1, 1990.
Box 3-E-Calculating Net Benefit Using the Example “Chronic Otitis Media—Eustachian Tubes/

Tonsillectomy and Adenoidectomy/Tympanoplasty’

Without treatment WRh treatment

QoL QoL QoL QoL

State P’ FLfSb WeighP value d

(P X value) P’ FL/Sb WeighF value d(P X value)

1. Death . . . . . . . . . . . . . . . . . . . 0.15 — –1 .000 0.000 0.0000

2. Morbidity state 1 . . . . . . . . . . . 0.25 S2 -0.062 0.571 0.1428

H4 -0.367

3. Morbidity state 2. . . . . . . . . . . 0.10 H17 -0.217 0.783 0.0783

4. Morbidity state 3. . . . . . . . . . . — — — — —

5. Perfect health . . . . . . . . . . . . . 0.50 — 0.000 1.000 0.5000

Z (P x QoL value) . . . . . . . 0.7211

0.01 — -1.000 0,000 0.0000

0.05 S2 -0.062 0.571 0.0286

H4 -0.367

0.03 H17 -0.217 0.783 0.0235 — — —

0.91 — 0.000 1.000 0.9100

z (P x QoL value) . . . . . . . 0.9621

NOTE: Net benefit is the difference between the value of X (P x OoL value) for patients with (.9621) and without (.7211) treatment, or .2410.

a p - proba~lity of being instate.

b FDS - functional Iimitation.kymptom associated with health state (see box 3-D for description of health states).

C weight- the weight the pub]~ assigns t. the fu~tional limitatio~symptom. can ~ interpret~ as the amount t~en away from parf~t health (vaiuecf as 1 ) associated with the presence

of a functional Iimitationkymptom. Weights for all telephone survey items are shown in box 3-D.

d QLvalue_qua\ityof Iifevalue _ (1 +Weight). When there ismoret~n one fumti~al limitation or symptom ~~gn~tothestate, weightsare added kfore summing to 1. Cafl bS interpreted

as the value associated with the state on a scale from O (death) to 1 (perfect health).

SOURCE: Office of Technology Assessment, 1992, based on data from the Oregon Health Services Commission, May 1, 1991.

rY

5-
46 ● Evaluation of the Oregon Medicaid Proposal

incorporated into the clinician outcomes data which

were scaled from 0 to 1.)13

More detailed information on the conduct and

analysis of the survey is provided in appendix C.

As shown in the example in box 3-E, the net

benefit of treatment is the difference between the

value of (~ (P x QoL Value)) for patients with and

without treatment for chronic otitis media, or 0.2410

(i.e., 0.9621 – 0.7211). (See table footnotes for

explanation of equation variables.) Net benefit can

vary from zero, indicating no benefit of treatment, to

1, indicating that treatment results in changing a

patient’s status from death to perfect health.

Step 3: Ranking Categories of Health Services

The HSC used a group consensus method to rank

17 categories of health care services (e.g., preventive

care for children, comfort care) (see box 3-F), taking

into consideration values expressed at public hearings and community meetings.

Public Hearings

Between September 1989 and February 1990, the

HSC heard testimony from approximately 275

people at 12 public hearings held throughout Oregon

(191). The HSC was charged to solicit testimony

from “advocates for seniors, handicapped persons,

mental health services consumers, low-income Oregonians, and providers of health care” (SB 27). The

Oregon Health Action Campaign (OHAC), a coalition of organizations, provided outreach, assistance

in writing testimony, and transportation to the

hearings in an effort to encourage low-income

persons and others most likely to be directly affected

by the legislation to testify at the hearings (204).

Health care providers and administrators made up

approximately one-third of those testifying at the

HSC public hearings (191). This group included

naturopaths, chiropractors, nutritionists, homeopaths,

physicians, massage therapists, social workers, nurses,

and midwives. A diverse group of 125 consumers

provided testimony at the HSC hearings, often as

advocates for specific services, such as organ

transplants. In addition, approximately 50 representatives of advocacy and special interest groups

testified in the interests of renters, migrant workers,

community groups, the elderly, the disabled, and a

variety of other constituencies (191).

Many offering testimony recommended that specific services should receive high priority .14 The

services most frequently mentioned by consumers

and providers alike were:15

●

●

●

●

●

●

●

●

Preventive health care (especially well-child

care),

Mental health care services,

Prenatal care,

Family planning,

Dental care,

Chemical dependency services,

Primary care, and

Care for chronic, nonacute conditions.

Major topics of discussion at the public hearings

included (191):

●

●

●

●

●

Financial barriers to health care,

Special health service needs of minority populations,

Need for higher provider reimbursement,

Effective health care delivery (e.g., case management), and

Need for broader Medicaid coverage to increase consumer choice of nonphysician providers (e.g., midwives, naturopaths, acupuncturists).

Community Meetings

In early 1990,47 community meetings were held

throughout the State to discuss what types of health

care Oregonians felt might constitute a common

good (91).16 The goal of the community meetings

was ‘to build consensus on the values to be used by

the Health Services Commission to guide health

resource allocation decisions” (SB 27).

13 ~c ~vmgerafig~ were divldedby 1~ (~~~ ~sign~to perfecth~~) even ~o@122peKxntof r~ponde!r.lts gave IOw(XMiIlgStO the “kt”

health state. ‘The HSC incorrectly reported that individual “best” health state scores (and not 100) were used in the denominator (193). The weights

shown in box 3-D are expressed as negative values because they represent the amount associated with the condition that the public thinks should be

subtracted fkom perfect health (score of 1).

14 Fewp@cipan@ fidiat~ w~chs~ic~ sho~dreceive Iowpriority, ~OU@ some s~ed tit hey thought there were expendable IIldCd SeXVkXS.

15 Oher ~ation~ Smius includ~: ~u~tion ~rapy ad co~e~; HrV/~Ds servi~s; inf~ty services; abortions; ~tment of morbid

obesity; geriatric care; medical equipment and supplies, such as eyeglasses, dentures, and hearing aids; and prescription drugs.

lb At lemt one mee~ was held in every county in the Stite.
Chapter .3-The Prioritized List . 47

Box 3-F—The 17 Service Categories Used in the Prioritization Process

Category Description

“Essential” services

1. Acute fatal . . . . . . . . . . . . . . . . . . . . . . Treatment prevents death with full recovery.

Example: Appendectomy for appendicitis.

2. Maternity care . . . . . . . . . . . . . . . . . . . Maternity and most newborn care.

Example: Obstetrical care for pregnancy.

3. Acute fatal . . . . . . . . . . . . . . . . . . . . . . Treatment prevents death without full recovery.

Example: Medical therapy for acute bacterial meningitis.

4. Preventive care for children . . . . . . . Example: Immunizations.

5. Chronic fatal . . . . . . . . . . . . . . . . . . . . . Treatment improves life span and quality of life.

Example: Medical therapy for asthma.

6. Reproductive services . . . . . . . . . . . . . Excludes maternity/infertility services.

Example: Contraceptive management.

7. comfort care . . . . . . . . . . . . . . . . . . . . Palliative therapy for conditions in which death is imminent.

Example: Hospice care.

8. Preventive dental care. . . . . . . . . . . . . Adults and children.

Example: Cleaning and fluoride applications.

9. Proven effective preventive care

for adults . . . . . . . . . . . . . . . . . . . . . . . . Example: Mammograms.

“Very important” services

10. Acute nonfatal . . . . . . . . . . . . . . . . . . . Treatment causes return to previous health state.

Example: Medical therapy for vaginitis

11. Chronic nonfatal . . . . . . . . . . . . . . . . . One-time treatment improves quality of life.

Example: Hip replacement.

12. Acute nonfatal . . . . . . . . . . . . . . . . . . . Treatment without return to previous health state.

Example: Arthroscopic repair of internal knee derangement.

13. Chronic nonfatal . . . . . . . . . . . . . . . . . Repetitive treatment improves quality of life.

Example: Medical therapy for chronic sinusitis.

Services that are “valuable to certain individuals”

14. Acute nonfatal . . . . . . . . . . . . . . . . . . . Treatment expedites recovery of self-limiting conditions.

Example: Medical therapy for diaper rash.

15. Infertility services . . . . . . . . . . . . . . . . Example: In-vitro fertilization.

16. Less effective preventive care

for adults . . . . . . . . . . . . . . . . . . . . . . . . Example: Screening of nonpregnant adults for diabetes.

17. Fatal or nonfatal . . . . . . . . . . . . . . . . . Treatment causes minimal or no improvement in quality of life.

Example: Medical therapy for viral warts.

SOURCE: Oregon Health Services Commission SalenL ORj “Prioritized Health Semices List,” May 1, 1991.

The community meetings were conducted for the tative of their counties, and that those to be affected

HSC by Oregon Health Decisions (OHD), a non- by SB 27 participated in the meetings (91). 17

profit organization that since 1983 has organized Approximately 1,000 people attended 47 commucommunity forums to discuss ethical issues related nity meetings, where attendance ranged from 7 to

to health care, including the problem of allocation of 132 participants (on average, there were 20 particiscarce resources. Trained volunteers organized meet- pants).

ings, provided outreach and publicity, and served as Meeting participants were informed that the

facilitators at meetings. OHD attempted to ensure Oregon legislature had passed three new laws which

that community meeting participants were represen- would expand access to health insurance, but that:

17 ~m=ch tmk me fom of English and Spanish ~~ge flyers, post~s, pI-WS releases, and radio and tdt3VkiOII Spots (259).
48 ● Evaluation of the Oregon Medicaid Proposal

. . . [while] many more people will be served, there

may not be enough money to provide all the services

that people may want. For this reason, the law

requires that health services be ranked in order of

importance. In order to do this the Health Services

Commission has asked for your help in telling them

what values are most important to you and society

(91).

Community meetings followed a standard format

that included viewing a slide show presentation,18

completing a questionnaire designed to elicit health

care values, evaluating certain types of treatment,

and participating in group discussions.

The questionnaire presented eight theoretical

health care situations, such as the following:

After three heart attacks, a patient is getting worse

despite taking several medications daily. An

operation to put in a pacemaker would probably

help the heart’s rhythm but not the general

condition of the heart, The day to day activities of

the patient may improve.

A heavy user of crack cocaine wants help for drug

addiction. Immediate treatment will help stop use.

A month of intensive in-hospital treatment and

outpatient treatment for a year will help stop the

alcohol and drug use for the long term.

Participants also classified as essential, very

important, or important nine categories of care, such

as ‘‘treatment of conditions where the health care is

likely to extend life by more than two years or to

improve the person’s quality of life, ’ and ‘‘treatment not likely to extend life or make any big

improvement in quality of life."19

Group consensus on health care values (box 3-G)

was achieved following these structured activities

and group discussions (91).

HSC Group Consensus

The HSC ranked the 17 health service categories

according to community health care values using a

modified Delphi20 method that included five steps

(194):

1. Commissioners individually rated each health

service category on a scale from 1 to 10 on

each of three attributes:

● value to the society,

● value to an individual at risk of needing the

service, and

● whether the service is essential to a basic

2.

3.

4.

5.

health care package.

Commissioners received a report stating where

their individual responses fell within the distribution of group values.

Commissioners met to discuss how value

judgments were made.

Commissioners reconsidered, and sometimes

adjusted previously submitted individual responses.

Finally, Commissioners met and reordered

some categories based on their best collective

judgment.

Step 4: Placing CT Pairs in Service Categories

The HSC placed each of the 709 CT pairs within

one (and only one) of the 17 service categories. Eight

of the categories are service-specific and include CT

pairs related to such services as children’s preventive care or reproductive care. The remaining nine

service categories are defined by whether the condition is fatal, whether it is acute or chronic, and

whether the treatment prevents death, returns patients to previous health, improves life span, or

improves quality of life. Commissioners classified

CT pairs as acute or chronic and then applied an

algorithm based on health outcomes information to

initially place CT pairs into these nine categories.

“Fatal” conditions, for example, were those that

without treatment resulted in at least a 1 percent

mortality rate. Full recovery was defined as ‘‘at least

90 percent of those surviving with treatment are

asymptomatic or with a treatment [benefit] value of

at least 0.9. ’ The ‘chronic otitis media--eustachian

tubes/tonsillectomy and adenoidectomy/tympano18 me Slide show de~~ the ~WoSe of the comm~~ mee~gs and d~cribed the pot~~ r~uction under the ticgon Basic Health Services Act

in the number of uninsured residents. Also discussed was the current system of cost-shifting in which insured individuals absorb some of the costs of

uncompensated care (91).

19 p~cipants were ~~ct~ t. place @ of the tie categories of me fito each of the three classification (i.e., essential, very importan~ or

important). The results of this exercise were not tabulated.

20 me De.phi teC@ue is us~ to ob~ the most reliable co~~sus of option from a group of experts, COXISen,WIS k i3ChkVd dkl Ml iterdh%

process where group members offer written individual opinions, discuss group opinion, and then revise individual opinions (227).
Chapter 3--The Prioritized List . 49

Box 3-G-Health Care Values Elicited at Community Meetings

. Prevention—Preventive services such as prenatal care and childhood immunizations were unanimously agreed

upon as essential.

● Quality of life--Services that enhance emotional and physical well-being, as well as extend life, were generally

thought to increase quality of life and should receive higher priority than those that only extend life.

● Cost effectiveness-Cost-effective treatments were given high priority, although some community members

disagreed that cost alone should be a primary determinant in prioritization.

. Ability to function—The importance of independence and ability to perform daily activities was mentioned at

three-fourths of the community meetings.

. Equity—Equity was described as a fundamental belief that everyone should have equal access to adequate health

care. Discussions of equity raised various objections to the prioritization process-many participants, for

instance, thought that health care services should be available equally to all segments of society. There was

support for increased Federal funding for health care services, and some advocated the establishment of a national

health insurance plan. Other equity issues discussed included increasing access to treatment services in rural

communities and universal access to health care for children.

. Effectiveness of treatment-Participants agreed that treatments with proven efficacy and those that improve

quality of life should be prioritized over those less likely to have successful outcomes.

. Benefits many-Services that benefit many should receive higher priority than those for whom few benefit,

according to participants.

. Mental health and chemical dependency—Prevention, including drug education, was more highly valued than

treatment services. While mental health and chemical dependency services were frequently discussed at meetings,

there was some ambivalence regarding society’s obligation to provide substance abuse services. Some

participants, for example, felt that treatment was appropriate only in cases where patients were “motivated to

undergo treatment, ” and that recidivism needed to be considered in cases of “repeat offenders. ”

. Personal choice-Some community members expressed a desire for increased choice of type of providers, while

others wanted more patient and family autonomy in making medical treatment decisions.

. Community compassion—Participants indicated that society is obligated to provide treatments and services that

alleviate pain and suffering (e.g., hospice care).

. Impact on society-Treatments for infectious diseases and for alcoholism or drug abuse are examples of services

that yield societal as well as individual benefit (discussed at approximately half of the community meetings).

. Length of life-Prolonging life was viewed as important, but a treatment’s value is limited if extending life

sacrifices quality of life.

. Personal responsibility-Personal responsibility was viewed as the individual’s obligation to society to seek

appropriate health education and treatment services, and to generally take responsibility for one’s health.

Individuals taking responsibility for their health should receive priority, and those whose illnesses are related to

lifestyle, such as alcohol- and drug-related conditions, a low priority if health care services are rationed.

SOURCE: R. Hasnain and M. Garland, “Health Care in Common: Report of the Oregon Health Decisions Community Meetings Process,”

Oregon Health Decisions, Portlan4 OR, April 1990.

plasty” CT pair has a treatment-associated benefit Step 5: Ranking CT Pairs Within Categories

value of 0.9621 (see box 3-E) and was placed in the

—

Within each category, CT pairs were ranked service category ‘‘chronic nonfatal, one time treatment improves quality of life. ’ according to the treatment’s net benefit (see step 2).

Following this initial assignment of CT pairs into Step 6: Final Line-by-Line Review of CT Pairs

categories, the HSC extensively reviewed category The HSC conducted a line-by-line review of the

placement and selectively moved some CT pairs to list to identify CT pairs that might be appropriately

other categories. moved up or down the list (i.e., either within its
50 ● Evaluation of the Oregon Medicaid Proposal

Table 3-l-Condition-Treatment (CT) Pair Rank by Category

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (709)

aTheHSC~~~ered~tegOrieS I.gtobe’’essential,” categories 10-13 ’’very important,” andeat~ories 14-17 ’’valuable tOCerh_dn Individuals.” Total

percentages may not add to exactly 100.0 due to rounding error.

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Oregon Health Services Commission.

category range or into another category range). In

this final review, the HSC used professional judgment, its interpretation of community values, costbenefit ratios, and cost alone to alter the order of CT

pairs on the list.21

Defining “Basic Health Care”

While not required to do so, the HSC provided

some guidance to the legislature on what health

services it considered to constitute a ‘‘basic” set of

benefits. Basic health care was defined as “a floor

beneath which no person should fall” (193). They

categorized each service on the list as “essential,’

‘‘very important,’ or ‘‘valuable to certain individuals” and recommended that all “essential” and

most ‘‘very important’ services be covered (193).

The HSC, in its May 1, 1991 report, recommended that the legislature fund health services

included in categories 1 through 9 (considered

“essential”) and most services in categories 10

through 13 (considered "very important"). CT pairs

in categories 14 through 17 are considered “valuable to certain individuals but significantly less likely

to be cost-effective or to produce substantial longterm gain” (193). The HSC defined “basic” health

care from a societal perspective rather than from the

individual’s perspective and noted that:

[W]hat is essential for the overall well-being of

society may not meet the desires of specific individuals. Responding to the needs of both society and the

individual may mean earmarking more funds for

investment in Oregon’s medical assistance programs

than has previously been the case (193).

The legislature’s decision to fund services

through line 587 follows the coverage recommendations of the HSC. With the line drawn at 587,

covered services include all but eight “essential”

CT pairs and most (81 percent; 224 out of 275)

“very important” services. All but five CT pairs

‘‘valuable to certain individuals’ are listed below

line 587 (table 3-l). An examination of the eight

uncovered ‘essential” services and the five covered

“valuable to certain individuals” CT pairs shows

that they probably represent CT pairs that were

incorrectly placed in categories 1 through 9 or 14

through 17, respectively (box 3-H). Medical therapy

for hepatorenal syndrome, for example, was placed

in category 3 and was initially highly ranked on the

unadjusted list (CT pair 166). However, this condition is regarded clinically by many as untreatable,

and the HSC moved the CT pair down to line 606.

Future Changes to the Prioritized List

The HSC continually reviews health outcomes

and effectiveness data and is to reissue a revised list

every 2 years when the legislature meets. Technical

amendments to the list could be made in the interim.

New medical technologies or inadvertent omissions

from the list could be added through such a

process.

22 Mental health and chemical dependency

services are to be incorporated into the 1993

prioritized list, and some services for the aged, blind,

and disabled are expected to be incorporated.23

21 AS ~~ of ~f~ ~tep, ~ch physici~ on he HSC was assign~ about zoo ~ p~s to review. me HSC reviewd the list and moved iteInS Up

and down the list based on group consensus following a consideration of HSC clinician recommendations and community values (e.g., number who may

potentially benefit alleviation of pain and suffering) (120).

22 me HSC p~m t. issue a revis~ list including t~hni~ ~en~ents in my 1992, Any c~g~ Mth significant cost implications r-e apprOVd

of the legislature or its emergency board (244).

Z ‘l’he HSC plans to ftize an integrated list in summer 1992 (244).
Chapter 3--The Prioritized List . 51

Box 3-H-Listing of the “Essential”1 Condition-Treatment (CT) Pairs Moved Below Line 587 and

CT Pairs “Valuable to Certain Individuals”2 Moved Above Line 587

Rank Category Condition Treatment

“Essential” CT pairs that are not covered

606 3 Hepatorenal syndrome Medical therapy

607 5 Other deficiencies of circulating enzymes (alpha 1-antitrypsin deficiency) Lung transplant

608 5 Lethal midline granuloma Medical therapy

609 5 Amyotrophic lateral sclerosis (ALS) Medical therapy

610 5 Cancer of liver and intrahepatic bile ducts Liver transplant

687 2 Intraventricular and subarachnoid hemorrhage of fetus or neonate Medical therapy

690 5 Alcoholic cirrhosis of liver Liver transplant

691 5 Non-Hodgkin’s Iymphomas Bone marrow transplant

(5-6 loci match)

CT pairs “valuable to certain Individuals” that are covered

352 14 Pilonidal cyst with abscess Medical and surgical treatment

358 14 Acute conjunctivitis Medical therapy

396 14 Infective otitis externa Medical therapy

424 17 Ophthalmic injury: Lacrimal system laceration Closure

434 14 Body infestations (e.g., lice, scabies) Medical therapy

1 “~~ntialn CT pairs are those in eatqories I-9 (s* bx s-a.

z CT pair$ ‘~lua~e to eerhin individuals” are those in eat~orfes 14-17 (we boX 3-F).

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Oregon Health Serviess Commission.

DETERMINANTS OF CT PAIR contiguous on the adjusted list, suggesting that more

PLACEMENT ON THE than 25 percent of CT pairs were selectively moved.

PRIORITIZED LIST While a movement of one CT pair up the list shifts

all CT pairs below its new placement down, this shift

As described in the last section, the 709 CT pairs should often have been counterbalanced by movewere ranked first by service category and then by net ment of another CT pair down the list. Many of the

benefit within category. The HSC then applied a

‘‘reasonableness’ test to subjectively reorder some

CT pairs. This section presents analyses of CTspecific data (e.g., CT pair category assignment, net

benefit values) to determine which steps of the

prioritization process were most important in determining CT pair placement on the list. Finally, HSC

data on such CT pair-associated characteristics as

age and cost are used to describe the distribution of

CT pairs on the list.

Effect of Adjustment of the List by the HSC

The HSC reported that about 25 percent of CT ●

pairs were moved from their ranked position on the

list (i.e., after being ranked frost by category and then

within category by net benefit) (35,244). Inspection

of CT pairs as finally ordered (i.e., adjusted) and as

ordered by category and net-benefit ranking alone

(i.e., unadjusted) show that almost every CT pair

shifted from its original position after adjustment.

Furthermore, virtually no blocks of CT pairs remain

CT pairs that were ‘not selectively moved’ should

therefore have stayed in the same relative position.

Table 3-2 shows the extent of CT pair movement

resulting from adjustment. Fewer than one-half (47

percent) of CT pairs stayed within 25 lines of what

would have been expected if the ranking procedure

had been used without adjustment. Nearly onequarter (24 percent) of CT pairs moved at least 100

lines up or down the list following adjustment.

Factors strongly associated with the movement of

CT pairs were:

Category--The most extreme movements occurred in categories 1 through 9 (essential) 24

and 10 through 13 (very important) .25 CT pairs

in categories 14 through 17 (valuable to some)

tended not to move; more than three-quarters

(78 percent; 52 out of 67) of category 14

through 17 CT pairs stayed within 25 lines of

the unadjusted ranked position. Only five

category 14 through 17 CT pairs shifted up to

24 Two.~d~ (68 ~rcen~ 62 out of 91) of CT pairs moved down 100 or more beS Ne ti CakgOfia 1 ~ough9.

2s Two_~ds (67 ~rcen~ 48 out of72) of CT pairs moved up 100 or more Mes Me ~ categories 10 ~u&@ 13.
52 ● Evaluation of the Oregon Medicaid Proposal

Table 3-2—Effect of List Adjustment on Location

of Condition-Treatment (CT) Pairs*

Final adjusted CT pair position Percent (number)

relative to unadjusted position of CT pairs

Moved down 100 or more lines . . . . . . . . . . 12.9 (85)

Moved down 50 to 99 lines . . . . . . . . . . . . . 5.8 (38)

Moved down 25 to 49 lines . . . . . . . . . . . . . 5.0 (33)

Moved down 1 to 24 lines . . . . . . . . . . . . . . 18.0 (119)

Not moved . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 (11)

Moved up 1 to 24 lines . . . . . . . . . . . . . . . . . 26.8 (177)

Moved up 25 to 49 lines . . . . . . . . . . . . . . . . 9.7 (64)

Moved up 50 to 99 lines . . . . . . . . . . . . . . . . 9.5 (63)

Moved up 100 or more lines . . . . . . . . . . . . 10.6 (70)

100.0 (660)

NOTE: Based on analysis of 660 CT pairs; net-benefit value missing for 49

CT pairs.

a Movement of CT pairs from the position expected if ranking followed

category pl~ementand net benefit. If the adjusted position is 100 and the

unadjusted position was 50, for example, the CT pair is said to have

moved down 50 lines.

SOURCE: Office of Technology Assessment, 1992; based on 1991 data

●

●

from the Oregon Health Serviees Commission.

line 587 or above to be covered, and only eight

category 1 through 9 CT pairs shifted down to

below line 587 to the uncovered range. These

13 CT pairs are shown in box 3-H.

Cost26—Most CT pairs (60 percent; 15 out of

25) associated with the highest costs (i.e.,

$100,000 or above) moved down the list at least

100 line spaces following adjustment. CT pairs

associated with the lowest costs (i.e., less than

$1,000) were more likely to move up than down

(62 percent moved up; 35 percent moved down;

3 percent did not move).

Age27—Nearly two-thirds (64 percent) of CT

pairs that were moved down 100 or more lines

affected adults (ages 19 to 70), while over

one-third (35 percent) affected children or

infants. 28 Nearly two-thirds (61 percent) of the

CT pairs that moved up at least 100 lines

affected primarily young and middle-aged adults

(ages 19 to 55).

If ranking had been without HSC adjustments, 30

uncovered CT pairs would have been covered and 30

covered CT pairs would not have been covered given

the line 587 cutoff point determiningg the initial

benefit package (box 3-I). Changes in coverage

would be more extensive if the coverage line were

higher. At line 500, for example, 102 CT pairs

change coverage status (i.e., 51 would shift above

and 51 would shift below line 500).

Determinants of Final Placement of

CT Pairs on the List

OTA examined the relative roles of category

placement, net benefit values, and the judgments of

the HSC in determiningg the final order of CT pairs

on the prioritized list.

Category Placement--Figures 3-la and b show

the relationship between the ranked position (1

through 709) and CT pair category placement for the

unadjusted and final adjusted list, respectively.

Figure 3-la shows a step-like pattern because on the

unadjusted list, all category 1 CT pairs are ranked

highest, then category 2 CT pairs and so on. Figure

3-lb shows jagged steps because the HSC moved

some CT pairs up and down the list, beyond the

proximity of other CT pairs of the same category.

Despite the extent of movement, the final ranking

follows category placement—most category 1

through 9 CT pairs are highly ranked and most

category 14 through 17 CT pairs are low-ranked

(table 3-3). Statistical tests confirm this; CT pair

category assignment is highly correlated with final

list placement (correlation coefficient 0.85).29

Net Benefit-Net benefit influenced ranking in

two ways: it was considered when CT pairs were

assigned to categories, and it was used to initially

rank CT pairs within categories. How net benefit and

other health outcome measures are related to category assignment is discussed later. This section

describes the importance of net benefit in determining rank and rank within category on the adjusted

list.

Figures 3-lc and 3-id show the relationship

between rank and net benefit for the unadjusted and

final adjusted lists, respectively. In the unadjusted

case (figure 3-lc), the series of disconnected slopes

show the ranking of CT pairs by category, and within

category from the highest to lowest net benefit

scores. The peak of each slope is the highest net

26 me HsfJ ~signed each CT pair to 1 of 14 Cost @egO1’ieS.

27 fich ~ P* ~m ~ssiwed an we ~ategow ~q~sent~ me age ~hort us@y ~ecte(f by tie condition and associated tratm~t. !% table 3-7

for ages included in categories.

2S CT ~~s fiw~g tie eld~ly (over we 70) ac~~t~ for 1 ~~nt of CT pairs moved do~ 100 or more h%.

~ conelation of 0.85 is significant at p = 0.001 (1-@l~).
Box 3-I-Condition-Treatment (CT) Pairs Whose Coverage Status Changed as a Result of Ranking Adjustment

Adjusted Unadjusted

rank rank Condition Treatment

CT pairs covered by adjusted ranking that would not have been covered by unadjusted rankingl

352 646 Pilonidal cyst with abscess

358 656 Acute conjunctivitis

387 607 Lyme disease

390 605 Atopic dermatitis

391 592 Contact dermatitis and other eczema

392 596 Acne

396 670 Infective otitis externa

397 598 Chronic otitis media

401 604 Gout

402 615 Crystal arthropathies

423 638 Osteoporosis

425 593 Disorders of refraction and accommodation

434 662 Body infestations (e.g., lice, scabies)

469 600 Endometriosis without hysterectomy

483 611 Osteoarthritis and allied disorders

486 613 Menopausal management

534 606 Allergic rhinitis and conjunctivitis

537 608 Pelvic pain syndrome

571 588 Brachial plexus lesions

572 590 Chronic sinusitis

574 597 Dysmenorrhea

578 599 Raynaud syndrome

580 601 Urticaria, chronic

581 602 Keratoderma, acquired; acquired acanthosis nigricans, striae atrophicae,

other and unspecified hypertrophic and atrophic conditions of skin

586 589 Spondylosis and other chronic disorders of back

Medical and surgical treatment

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical and surgical treatment

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical and surgical treatment

Medical therapy

Medical therapy other than hormone replacement

Medical therapy

Medical and surgical treatment

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical therapy

Medical and surgical treatment

587 591 Esophagitis Medical therapy
Box 3-l-Condition-Treatment (CT) Pairs Whose Coverage Status Changed as a Result of Ranking Adjustment-Continued

Adjusted Unadjusted

rank rank Condition Treatment

CT pairs not covered by adjusted ranking that would have been covered by unadjusted ranking

588

599

600

601

606

607

608

609

610

611

612

613

614

615

616

617

618

619

621

625

645

652

654

687

689

690

691

692

694

706

577

463

514

506

166

267

351

235

409

416

421

462

467

434

525

486

510

489

455

581

582

530

97

518

263

329

515

403

522

Intervertebral disc disorders

Hydrocele

Absence of breast after mastectomy as treatment for neoplasm

Spastic dysphonia

Hepatorenal syndrome

Other deficiencies of circulating enzymes (alpha 1-antitrypsin deficiency)

Lethal midline granuloma

Amyotrophic lateral sclerosis (ALS)

Cancer of liver and intrahepatic bile ducts

Hematoma of auricle or pinna and hematoma of external ear

Enophthalmos

Acute Iymphadenitis

Congenital anomalies of female genital organs

Generalized convulsive or partial epilepsy without mention of impairment of

consciousness

Varicose veins of lower extremities

Disease of capillaries

Anomalies of relationship of jaw to cranial base, major anomalies of jaw size,

other specified and unspecified dentofacial anomalies

Congenital anomalies of the ear without impairment of hearing

Temporomandibular joint (TMJ) disorders

Cervical rib

Benign intracranial hypertension

Food allergy

Sublingual, scrotal, and pelvic varices

Intraventricular and subarachnoid hemorrhage of fetus or neonate

Sensorineural hearing loss

Alcoholic cirrhosis of liver

Non-Hodgkin’s Iymphomas

Obesity

Benign polyps of vocal cords

Prolapsed urethral mucosa

Thoracic-lumbar Iaminectomy,

medical therapy

Medical therapy, excision

Breast reconstruction

Medical therapy

Medical therapy

Lung transplant

Medical therapy

Medical therapy

Liver transplant

Drainage

Revision

Incision and drainage

Surgical treatment

Focal surgery

Stripping/sclerotherapy

Excision

Osteoplasty, maxilla/mandible

Otoplasty, repair& amputation

TMJ surgery

Surgical treatment

Medical therapy

Medical therapy

Venous injection, vascular surgery

Medical therapy

Cochlear implant

Liver transplant

Bone marrow transplant (5-6 loci match)

Gastroplasty

Medical therapy

Surgical treatment

1 only 26 of 30 CT ~~r~ are li~t~. me 4 “nli~t~ CT pairs ~nn~t ~ i~ntifi~ fr~m th~~ that have no net benefit ~ign~ to them (i.e., their undjustd rank @nnot b determined).

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Oregon Health Services Commission.
Chapter 3-The Prioritized List ● 55

n

I

1

T

,!,

,! 11”

,1

/

—

—
56 ● Evaluation of the Oregon Medicaid Proposal

Table 3-3-Condition-Treatment (CT) Pairs by Category and Location on the List

Number of Location on list

Category CT pairs 1-99 100-199 200-299 300-399 400-499 500-599 600-709

Percent of CT pairs within ranges

“Essential”

1-9 . . . . . . . . . . . . . 366 26.8 26.0 26.2 11.5 1.6 5.7 2.2

1 . . . . . . . . . . . . . .

2 . . . . . . . . . . . . . .

3 . . . . . . . . . . . . . .

4 . . . . . . . . . . . . . .

5 . . . . . . . . . . . . . .

6 . . . . . . . . . . . . . .

7 . . . . . . . . . . . . . .

8 . . . . . . . . . . . . . .

9 . . . . . . . . . . . . . .

64

48

61

4

182

4

1

1

1

79.7

45.8

32.8

50,0

1.6

0.0

0.0

0.0

0.0

10.9

25.0

50.8

25.0

20.9

75.0

100.0

100.0

100.0

4.7

12.5

3.3

25.0

46.2

0.0

0.0

0.0

0.0

1.6

12.5

6.6

0.0

16.5

25.0

0.0

0.0

0.0

1.6

2.1

1.6

0.0

1.6

0.0

0.0

0.0

0.0

1.6

0.0

3.3

0.0

9.9

0.0

0.0

0.0

0.0

0.0

2.1

1.6

0.0

3.3

0.0

0.0

0.0

0.0

“Very important”

10-13 . . . . . . . . . . . 275 0.4 1.8 1.5 20.0 33.5 26.9 16.0

10 . . . . . . . . . . . . . . 60 0.0 8.3 3.3 25.0 31.7 25.0 6.7

11 . . . . . . . . . . . . . . 106 0.0 0.0 0.9 16.0 56.6 13.2 13.2

12 . . . . . . . . . . . . . . 28 3.6 0.0 0.0 32.1 14.3 50,0 0.0

13 . . . . . . . . . . . . . . 81 0.0 0.0 1.2 17.3 11.1 38.3 32.1

“Valuable to certain individuals”

14-17 . . . . . . . . . . . 68 0.0 0.0 0.0 4.4 2.9 7.4 85.3

14 . . . . . . . . . . . . . . 31 0.0 0.0 0.0 9.7 3.2 12.9 74.2

15 . . . . . . . . . . . . . . 4 0.0 0.0 0.0 0.0 0.0 25.0 75.0

16 . . . . . . . . . . . . . . 1 0.0 0.0 0.0 0.0 0.0 0.0 100.0

17 . . . . . . . . . . . . . . 32 0.0 0.0 0.0 0.0 3.1 0.0 96.9

Total . . . . . . . . . 709 14.0 14.1 14.1 14.1 14.1 14.1 15.5

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Oregon Health Services Commission. Total Percentages may not add to .

exactly 100.0 due to rounding error.

benefit score for that category. Peaks are highest

(i.e., they approach 1.0) in categories 1 through 9 and

are at their lowest in categories 14 through 17 (i.e.,

none exceed 0.5). The trend of declining net benefit

with increasing category is expected because net

benefit was considered when CT pairs were assigned

to categories. There is a wide range of net benefit

scores within each category, especially categories 1

through 9. While CT pairs in categories 1 through 9

include most (84 percent) CT pairs with high net

benefit scores (i.e., 0.5 or higher), as many as

one-quarter (26 percent) of category 1 through 9 CT

pairs have benefit scores lower than 0.2 (table 3-4).

The HSC adjustment moved almost all CT pairs

from their original position. Many CT pairs moved

out of their category’s range on the list or were

reordered within their category’s range. Figure 3-id

shows the effect of this reordering-there are now

wide fluctuations in net benefit by rank and the

slopes seen in figure 3-lc have largely disappeared.

Statistical tests confirm that following adjustment

net benefit loses importance in determining CT pair

rank. Although the adjusted and unadjusted rankings

are highly correlated (correlation coefficient =

0.87), 30 the strength of this relationship is largely

explained by CT pair category assignment. Category

assignment alone is highly correlated to final list

placement (correlation coefficient = 0.85).31

Net benefit determined CT pair order within

categories on the unadjusted list. If CT pairs are

analyzed by category, does this relationship still

hold for the adjusted list? Figures 3-2A through 3-21

show net benefit among CT pairs within categories

(ordered by rank within category). The wide fluctuations in net benefit persist in all but two categories—

some CT pairs in categories 10 and 11 show net

30 Correlation of 0.87 is sign.itlcant at p = 0.001 (1-tiikd).

SI Correlation of 0.85 is significant at p = 0.001 (1-@l~).
Table 3-4-Net Benefit Scores by Category

SOURCE: Office of Technology ksessment, 1992; based on data from the Oregon Health Services Commission.

●
58 ● Evaluation of the Oregon Medicaid Proposal

Figure 3-2—The Relationship Between Net Benefit and Rank Within Categories for the Adjusted List

A. Category 1

1.0 I

0.9

0.8

~ 0.4

0.3

0.2

0.1

0.0

1 Rank within category 1 56

1.0

0.9

0.8

C. Category 3

0.7

0.6

0.2

0.1

B. Category 2

0.9

0.8

1 Rank within category 3 54

1.0

D. Category 5

1 I

0.3

0.2

0.1

0.0

1 Rank within category 2 39

benefit gradually declining with increasing rank (see

figures 3-2e and 3-2f). Figure 3-3 summarizes the

relationship between within-category net benefit

and rank showing median net benefit for categories

and quartiles within categories. The expected decline in median net benefit as rank increases is seen

in several categories (i.e., categories 5, 11, 12, 13,

and 17).32 Statistical tests show that following

adjustment, CT pair rank within category is poorly

or moderately correlated to rank based on net benefit

(table 3-5).

~ 0.4

0.3

0.2

0.1

0.0

1 Rank within category 5 174

While net benefit is not, in itself, highly correlated

with list placement,33 of note is that none of the CT

pairs below line 600 has a high net benefit term (i.e.,

0,6 or above) and 88 percent (84/96) of CT pairs with

high net benefit terms are above line 300 (see table

3-6). While a high net benefit term seems to be

associated with high placement on the list, a low net

benefit term (i.e., less than 0.2) is not associated with

low placement. In fact, more than one-third (35

percent) of CT pairs with such low net benefit scores

are above line 400.34

32 ~other ~xpted trend jS tit the medim net ~nefit for ~tegories in the. es~nti~ r~e (i.e., Categories 1 through 9) are generally higher@

those in the “important” range (i.e., categories 10 through 13), which are in turn higher than the median net benefit for ~ pairs in the “important to

individuals’ range (i&., categories 14 through 17). Category 2, maternity services is an exceptiotiits median net benefit is lower than that of categories

10 through 13.

33 A r- of CT pairs based on tie net &nefit term alone is only moderately correlated to the adjusted (COITekUiOn COCfflClent = 0.47, Si@CiUlt

at P = 0.001 (l-tailed)) and unadjusted list (correlation cmfflcient = 0.41, signitlcant at p = 0.001 (l-tailed)).

~ The re~tively IOW net-~nefit terms msociati with some of the highly ranked CT pairs may be explained because avoidmce of d~ti does not

always contribute to large changes in net benefit (35,244).
Chapter 3-The Prioritized List ● 59

E. Category 10

‘“’~ 0.7 -j

1 Rank within category 10 56

F. Category 11

1 Rank within category 11 104

G. Category 12

0.6 1 I

0.5

5

0.4

J 0.3

z

z 0.2

0.1

0.0~

1 Rank within category 12 26

0.8

0.6

5

I 0.4

3

0.2

0.0

H. Category 13

L ;.

1 Rank within category 13

1. category 14-17

0.4 I /l

6

1 Rank within category 14-17 62

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Orsgon Health Services Commission.
60 ● Evaluation of the Oregon Medicaid Proposal

Table 3-5-Correlation Between Order of Condition-Treatment (CT) Pairs Within Categories if Determined

by Rank or by Net Benefita

Correlation between CT pair order within Percent of variation explained

Category Number of CT pairs in category category by rank and net benefit by net benefit

1 . . . . . . . . . . . . . . . . . . . .

2 . . . . . . . . . . . . . . . . . . . .

3 . . . . . . . . . . . . . . . . . . . .

5

10 : : : : : : : : : : : : : : : : : : : :

11 . . . . . . . . . . . . . . . . . . . .

12 . . . . . . . . . . . . . . . . . . . .

13 . . . . . . . . . . . . . . . . . . . .

14 . . . . . . . . . . . . . . . . . . . .

17 . . . . . . . . . . . . . . . . . . . .

56

39

54

174

56

104

26

78

31

31

a Analysis is limited to those cat~ories with more than 10 CT pairs. Correlation is between order of CT pairs within category as ranked by the Oregon H*lth

Services Commission and order expeeted if ranked by net benefit.

b Correlation is significant at p -.01 (I-tolled).

SOURCE: Offia of Technology Assessment, 1992; based on 1991 data from the Oregon Health Serviees Commission,

Figure 3-3-Median Net Benefit by Category and

Quartile Within Category

Median net benefit

0“8~

I :Lrkhtid

3 5 10 11 12 13 14 17

Category and category quartile

~ Category ‘+ Category quartile

SOURCE: Office of Technology Assessment, 1992; based on 1991 data

from the Oregon Health Services Commission.

Characteristics of the List

The distribution of CT pairs on the list can be

described by three CT pair-associated characteristics: age,35

sex,

36 and treatment-associated costs.37

CT Pair Rank by Age-CT pairs related to

children generally rank fairly high on the list. Nearly

two-thirds (66 percent) of infant-related CT pairs,

one-half (50 percent) of child-related CT pairs, and

one-third (34 percent) of adolescent CT pairs are

located within the top 300 lines (table 3-7). CT pairs

associated with infants, senior adults (age 56 to 70),

and the elderly (age 70 and older) are least likely to

be toward the bottom of the list (i.e., below 587). The

27 CT pairs affecting infants, children, and adolescents falling below line 587 are shown in box 3-J.38

Ranking of CT Pairs Affecting Women-CT

pairs affecting women also tend to rank relatively

high on the prioritized list. Nearly all CT pairs can

affect women (89 percent; 634 of 709), but 59 (8

percent) can be classified as “primarily or only”

affecting women.39 Of these, 41 percent (24 of 59 CT

pairs) fall within the top 300 lines of the list and 17

percent (10 of 59 CT pairs) fall below line 587 (box

3-K).

CT Pair Rank by Cost—Nearly one-half (46

percent; 25 of 55 CT pairs) of high-cost CT pairs

(i.e., $40,000 and above) are found within the top

300 lines of the list and as many as one-third of low

cost CT pairs (i.e., less than $1,000) fall below line

587 (table 3-8).

35 c~c~n ~~ne~ ~ ~egon p~vided ~omtion on he age goup us~y ~~~d by the CT p~. Some of the @afric age mhofi assignments

made by the Oregon clinicians were incorrect according to an OT4 clinical reviewer (235). For example, rheumatic fever (CT pair 145) was

inappropriately omitted as a pediatric ~ pair and cataract (CT pair 337) was inappropriately included as a primarily pediatric CT pair.

~ OTA clinicd contractors identifkd CT pairs unique or common to women (14).

37 me HSC used ~omation from C~C~S and the off~ce of Medic~ Assistmce ~c)~~s (Ow) to est~te CT pfi-msOC&t4 COSt gTOUp@S.

3S More ~oneq~er (Z* ~runt; 9D2) of CT ptis affecting adolescents and more than 1 iII 10 (15 percent; 1 lf16) CT P* ~~fig c~~~

fall below line 587 on the list (table 3-7).

39 CT p~s ~ ‘P-Yor o~y’$ ~~tfig women ~ fho~ for which women tie up at l-t 75 PCXCent Of d patients (14).
Chapter 3--The Prioritized List ● 61

U) a+

coy m+

0).

0 0

0 0 0

0 0

0 0 0

0 0 *

000 0)$

coo

040

r-vu)

yo

C9mln

0 0

0 0 0

0 0

0 0 0

0 0

0 0 0

0 0 0

000 @

0 0

0 0 0

0 0

0 0 0

*.

ao$$

ml

Cno

mu -ill-i

0 3 a a

inuioi Ww C9C9C9 0).

*CN

Cocia”

0 0

0 0 0

0 0

0 0 0

. . .

. . .

. . .

. . .

. . .

,..

. . .

. . .

. . .

. . .

. . .

0..

. . .

. . .

,..

.

.

.

.

.

E

sC3
Table 3-7--Condition-Treatment (CT) Pair Age Cohorta by Rank

Age group

CT pair rank Infancy Children Adolescent Young adult Middle-age Senior adult Elderly

Percent (count)

1-300 . . . . . . . . . . . . . . 65.9 (56) 50.0 (38) 34.4 (11) 36.2 (77) 38.1 (69) 38.1 (32) 25.0 (2)

301-587 . . . . . . . . . . . . . . 25.9 (22) 35.5 (27) 37.5 (12) 42.3 (90) 41.4 (75) 50.0 (42) 62.5 (5)

588-709 . . . . . . . . . . . . . . 8.2 (7) 14.5 (11) 28.1 (9) 21.6 (46) 20.4 (37) 11.9 (lo) 12.5 (1)

Total . . . . . . . . . . . . . . . 100.0 (85) 100.0 (76) 100.0 (32) 100.0 (213) 100.0 (181) 100.0 (84) 100.0 (8)

NOTE: n = 679; number of missing observations_ 30. Total percentages may not add to exactiy 100.0 due to rounding error.

a Infanq -~ than age one; ~ildren -1-10 y=rs old; adolmnt _ 11-18 years o~; young ~ult _ 19.35 years o~; middl~ag~ _ 36-55 years Old; smior adult _ 56-70 yeWS Oid; dddy = OVer

70 years old.

SOURCE: Office of Technology Assessment, based on data from the Oregon Health Servicea Commission, 1991.

Table 3-8-Condition-Treatment (CT) Pair Cost Intervala by Rank

cost

CT pair rank up to $1,000 $1,000 to 4,999 $5,000 to 17,999 $18,000 to 39,999 $40,000 to 99,999 $100,000 and over

Percent (count)

1-300 . . . . . . . . . . . . . . 22.7 (25) 29.0 (47) 46.0 (104) 67.3 (76) 60.0 (18) 28.0 m

301-587 . . . . . . . . . . . . . . 43.6 (48) 52.5 (85) 40.3 (91) 19.5 (22) 30.0 (9) 52.0 (13)

588-709 . . . . . . . . . . . . . . 33.6 (37) 18.5 (30) 13.7 (31) 13.3 (15) 10.0 (3) 20.0 (5)

100.0 (110) 100.0 (162) 100.0 (226) 100.0 (113) 100.0 (30) 100.0 (25)

NOTE: n = 666; number of missing observations -43. Total percentages may not add to exactly 100.0 due to rounding error.

a The @egon Health services timmission estimated the cost interval for each CT pSir.

SOURCE: Office of Technobgy Asessment, 1992; based on 1991 data from the Oregon Health Services Commission.
Chapter 3--The Prioritized List ● 63

Box 3—J-The 27 Condition-Treatment (CT) Pairs Affecting Children That Fall Below Line 5871

Rank Condition Treatment

594 Sprains, strains and non-allopathic spinal lesions: thoracic, lumbar Medical therapy

and sacrum acute

614 Congenital anomalies of female genital organs Surgical treatment

618 Anomalies of relationship of jaw to cranial base, major anomalies of jaw size, Osteoplasty, maxilla/mandible

other specified and unspecified dentofacial anomalies

619 Congenital anomalies of the ear without impairment of hearing Otoplasty, repair and amputation

624 Cavus deformity of foot Medical therapy, orthotic

625 Cervical rib Surgical treatment

634 Obesity Nutritional and lifestyle counseling

639 Herpes simplex without complications Medical therapy

640 Testicular and polyglandular dysfunction Medical therapy

649 Diaper or napkin rash Medical therapy

652 Food allergy Medical therapy

660 Internal infections and other bacterial food poisoning Medical therapy

662 Viral, self-limiting encephalitis, myelitis and encephalomyelitis Medical therapy

663 Acute tonsillitis Medical therapy

667 Aseptic meningitis Medical therapy

668 Infectious mononucleosis Medical therapy

669 Other nonfatal viral infections Medical therapy

670 Acute pharyngitis and laryngitis and other diseases of vocal cords Medical therapy

675 Vitiligo, congenital pigmentary anomalies of skin Medical therapy

680 Agenesis of lung Medical therapy

685 Ichthyosis Medical therapy

687 Intraventricular and subarachnoid hemorrhage of fetus or neonate Medical therapy

692 obesity Gastroplasty

693 Congenital cystic lung-severe Lung resection

705 Constitutional aplastic anemia Medical therapy

708 Extremely low birth weight (under 500 gm) and under 23 week gestation Life support

709 Anencephalous and similar anomalies and reduction deformities of the brain Life support

1 This listing is ~~~ data su@i~ bythe HSC. The HSC rn~ have misidentified some CT pairs as prindpdiy aff*tin9 ~i~ren (e.g., o~~ty)

(see reference 235).

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Oregon Health Services Commission.

Box 3-K-The 10 Condition-Treatment (CT) Pairs “Primarily or Only” Affecting Women

That Fall Below Line 5871

Rank Category Condition Treatment

598 15 Anovulation (infertility) Medical therapy

600 11 Absence of breast after mastectomy as treatment for neoplasm Breast reconstruction

603 15 Tubal disease Microsurgery

614 11 Congenital anomalies of female genital organs Surgical treatment

645 13 Benign intracranial hypertension Medical therapy

666 14 Vulval varices Vascular surgery

672 17 Old laceration of cervix and vagina Medical therapy

681 17 Gallstones without cholecystitis Medical therapy, cholecystectomy

683 17 Sicca syndrome Medical therapy

696 15 Tubal dysfunction and other cases of infertility In-vitro fertilization, GIFT2

1 CT ~air~that ,,p~manly or only’? aff~twomen are those for~~h women make iJp at l~st 75 percent of all patients (we ref. 14).

2 Gamete intrafallopian transfer.

SOURCE: Office of Technology Assessment, 1992; based on 1991 data from the Oregon Health Services Commission.
64 ● Evaluation of the Oregon Medicaid Proposal

CRITIQUE OF THE

PRIORITIZATION PROCESS

This section presents the results of OTA analyses

designed to answer the following questions:

●

●

●

●

●

●

How complete is the prioritized list? Are all

important health care services included?

How appropriately are conditions and treatments aggregated into CT pairs?

Should category assignment be an important

determinant of CT pair order on the prioritized

list?

How accurate is CT-specific outcomes information provided by panels of clinicians?

Are the public’s health state preferences appropriately integrated into the prioritization process?

Were community values appropriately assessed

and incorporated into the ‘prioritization process?

Completeness of the Prioritized List

Virtually all conditions are accounted for in the

prioritization process, according to a study conducted to assess the list’s completeness. OTA

identified a systematic sample of ICD-9-CM codes40

and checked inclusion of these codes on the prioritized list or on the “Missing ICD-9 Code Report”

provided by the HSC (192). The missing code report

includes 948 ICD-9-CM codes intentionally omitted

from the prioritized list, representing roughly 10

percent of all ICD-9-CM codes. In all but one case,

the sampled codes, or the more detailed subcodes,

were found on either the prioritized list or the

missing code list.

OTA reviewed selected conditions listed on the

“Missing ICD-9 Code Report” 41 and found that

most omitted codes either represent conditions or

treatments initially excluded from prioritization

(e.g., mental health conditions) or are nonspecific

codes that the HSC intentionally omitted from the

list (e.g., ICD-9-CM code 459, other disorders of

circulatory system). By omitting the nonspecific

codes, the HSC hoped to encourage clinicians to use

specific codes. Currently, all codes ending in “99”

require manual review prior to payment (170).

Some conditions represented on the missing code

list, however, probably represent errors. The codes

for secondary hypertension (ICD-9-CM code 405)

and hypertensive renal disease (ICD-9-CM code

403), for example, should probably have been

included within CT pairs 147 (hypertension and

hypertensive disease) and 148 (hypertensive heart

and renal disease), respectively. Similarly, impetigo

(ICD-9-CM code 684)42 and carbuncle and furuncle

(ICD-9-CM code 680) should probably have been

included in CT pair 217, infectious skin conditions.

Some missing codes may represent more serious

omissions. The following are examples of conditions that will probably have to be reviewed by the

HSC and formally added to the list through its

technical review process: benign neoplasms of the

eye (ICD-9-CM code 224); disorders of fluid,

electrolyte, and acid-base balance (ICD-9-CM code

276);43 visual disturbances (ICD-9-CM code 368);

and chronic laryngitis (ICD-9-CM code 476).

Appropriateness of Aggregation of Conditions

and Treatments Into CT Pairs

Ideally, patients falling within any given CT pair

should have similar clinical experiences with treatment. According to OTA’s review of CT pair

content, however,44 CT pairs are so broadly defined

that in many instances patient outcomes can vary

substantially within a CT pair. Heterogeneity within

CT pairs can often be traced to outcome differences

expected by patient characteristics such as age and

comorbidity. Some patient subpopulations within

high-ranking CT pairs have as poor an expected

outcome as patients falling into below-the-line CT

40 A ~s~mtic -Ie of 39 ICD.9.CM three+iigit codes (representing 4 percent of a total of 910 thredi@ codes) WaS sekcted from The

International Cfasszfication of Diseases, 9th Revision, Clinical Modification. Every 25th code was selected following a random start. Excluded from

this sample were ‘E” codes used to classify injuries and disease s caused by external events (e.g., railway and motor vehicle accidents) and “V” codes

used to class~ procedures that do not fall into either the numerical or “E” code categories.

41 OTA a~~d w IS I thr~di~t ICD-9-CM codes listed in the ‘‘Missing ICD-9 Code Report’ (192).

42 Impetigo herpetiformis is listed on line 591.

43 me HSC fi comidefig~~g anew CTpfi for d~rders of fl~~ el~trolyte, and acid-~b~~ce to the revised ht tht k expected tO k klld

in h&y 1992 (35).

44 me c~c~ review Wm ~de~en on OTA’s be~by fo~ physicians (NO ~te~sts ad ~0 mtricim) who reviewed the endre pfiOfitiZd

list (14,80,235). For this and other analyses, the clinical contractors were instructed to use readily available published information (e.g., review articles,

medical textbooks) and consultations with experts.
Chapter 3-The Prioritized List ● 65

pairs. Conversely, some patient subpopulations

within low-ranking CT pairs probably have as good

a prognosis as those falling within above-the-line

CT pairs. This issue is explored further in a later

section of this chapter, which provides the results of

a clinical evaluation of the list.

Specific types of clinical problems with CT pair

content include:45

●

●

●

Heterogeneous conditions within CT pairs--

CT pairs often include several ICD-9-CM

codes that describe conditions with very different consequences. CT pair 95, for example,

includes myocarditis, pericarditis, and endocarditis, which differ in their clinical implications

and their responses to treatment. CT pair 663,

medical therapy for acute tonsillitis, includes

both viral pharyngitis (a simple sore throat) and

gangrene of the tonsils. Even within an ICD-9-

CM code there can be markedly different

clinical states. Patients with benign prostatic

hypertrophy (a single ICD-9-CM code), for

example, range from having no urinary symptoms to experiencing very severe symptoms,

such as urinary retention.

Inappropriate grouping of CT pairs-Some

CT pairs include clinical conditions that are

themselves diverse, with widely different implications. Line 264, for example, includes

diseases of white blood cells, some of which are

trivial or benign while others are lifethreatening. Line 640 includes testicular hyperfunction, which may require no treatment, and

Schmidt’s syndrome, which is fatal without

treatment of the adrenal insufficiency, and for

which the treatment is inexpensive and completely effective (31 1).

Lack of information on comorbidity--Some

CT pairs are commonly associated with other

illnesses, making their ranking problematic.

Disseminated intravascular coagulation (CT

pair 102), for example, is often a secondary

result of a primary condition such as cancer or

infection. It is difficult to evaluate this secondary condition without knowledge of the underlying primary condition. Age is a predictor of

treatment outcomes for many conditions, yet

only two conditions are split into separate CT

●

●

●

●

pairs by age to distinguish childhood from adult

forms of disease (i.e., hearing loss and acute

lymphocytic leukemia). The HSC was concerned that making distinctions by age might be

interpreted as discriminatory (244).

Inappropriate separation of CT pairsSome CT pairs are so similar that separating

them seems unnecessary. CT pairs 11, 100, and

119, for example, represent surgical repair for

injuries to major blood vessels (i.e., upper

extremity, thoracic cavity, lower extremity)

that have similar outcomes and could have been

grouped together. Other CT pairs are inappropriately separated on the list if clinical outcome

itself is the only criterion. Liver transplantation

for nonalcoholic liver failure is widely separated from transplantation for alcoholic cirrhosis of the liver (line 366 and 690), despite

similar success rates (299). A more reasonable

distinction could have been made based on

liver failure associated with hepatitis B virus or

cancer (14).

Inappropriate prognostic staging—For some

CT pairs, attempts to distinguish among different grades or stages of the same disease are

inadequate or inappropriate (e.g., cancers, human

immunodeficiency virus (HIV) disease, burns).

Cancer is categorized as treatable or nontreatable, the latter being defined as “treatment

results in less than a 10 percent chance of

survival in 5 years.

ICD-9-CM/CPT-4 code mismatch—There are

substantive inconsistencies between the ICD-9-

CM or CPT-4 codes listed and the verbal

diagnosis or treatment descriptions listed for

some CT pairs. So-described “treatable dementia’ (line 230), for example, includes some

codes for dementias that some clinicians would

not consider effectively treatable (i.e., ICD-9-

CM 290.40, multi-infarct dementia and ICD-9-

CM 291.2, alcoholic dementia) (14).

Apparent coding errors-There are numerous examples of duplicate or misplaced ICD-9-

CM or CPT-4 codes. If uncorrected, some

coding problems could contribute to misinterpretation of the scope of conditions or treatments included in the CT pair.46

45 me HSC ~ fi he prW=S of corrmtig some technical errors and plans to issue a revised fist h MW’ 1W2 (2~).

46 OTA ~~c~ ~vlewm and ~ obste~~~n.gynecolo@t com~~t were ~ble to comprehend one CT pair (line 672, medical therapy for old

laceration of cervix or vagina).
66 ● Evaluation of the Oregon Medicaid Proposal

To better understand how often these types of

problems occurred, OTA’s contractors analyzed a

systematic sample of 35 CT pairs.47 Nearly one-third

(10 of 35) of sampled CT pairs encompass such a

wide variety of conditions that available information

from the literature on condition-specific outcomes

could not be interpreted to provide reliable CT pair

outcome estimates. Comorbidity or other factors

were noted to substantially affect the outcomes of

over one-third (14 of 35) of sampled CT pairs.

One-half (18 of 35) of sampled CT pairs had at least

one of these problems (i.e., heterogeneous CT pair or

CT pair substantially affected by comorbidity or

other factors).

The Use of Categories in Prioritization

ACT pair’s health service category assignment is

an important determinant of CT pair placement on

the prioritized list. OTA critiqued the use of health

service categories as a prioritization tool and then

assessed the category assignment of a sample of CT

pairs.

The 17 health service categories used to rank CT

pairs were a useful organizational tool for the HSC,

but their use has some inherent drawbacks because

of the inability of the categories to distinguish

conditions on grounds that are clinically meaningful. The distinction between acute and chronic

conditions in 8 of the 17 categories, for example, is

clinically irrelevant to its “importance.’ If two

conditions, one acute and episodic (e.g., vaginal

infections), the other chronic (chronic cystitis), both

have similar outcomes with treatment, there is little

clinical reason one should be ranked above the other.

Other distinctions between categories may also be

poor indicators of clinical ‘ ‘importance. ’

Categories 11 (i.e., chronic nonfatal, one-time treatment improves quality of life) and 13 (chronic

nonfatal, repetitive treatment improves quality of

life), for example, differ only because one treatment

needs to be repeated and the other doesn’t. The HSC

prioritized category 11 CT pairs because they

represent services that are likely to be less costly

(i.e., only performed once) and more convenient for

patients (244).

To assess whether the classification system was

ambiguous, OTA had clinician reviewers examine

the categorization of a systematic sample of 35 CT

pairs. Two CT pairs were viewed as being assigned

to the wrong category (lines 112 and 412). Another

six CT pairs’ assignments were viewed as possibly

correct, but given the nature of the condition, the CT

pair could easily have been assigned to another

category. Otherwise the clinicians agreed with CT

pair assignment to categories. OTA concludes that

some CT pairs’ placement (as many as one in five)

into categories are at least debatable. Given that

category placement had important implications for

final ranking, some CT pairs could probably be

justifiably moved on the list.

Accuracy of Outcomes Information

Supplied by Clinicians

Net benefit was not as important a determinant of

CT pair placement on the list as other aspects of the

prioritization process. Nonetheless, the outcome

information provided to the HSC by clinicians was

a vital conceptual part of the process. This section

explores whether that information was accurate and

could have been used reliably.

OTA’s clinician contractors evaluated morbidity

and mortality data for a systematic sample of 35 CT

pairs. These data are integral to the calculation of CT

pair net benefit values. OTA reviewers found that

the net benefit value assigned to most CT pairs (22

of 35 CT pairs) was difficult to justify based on

available published information. When the direction

of the discrepancy could be determined, there were

as many overestimates of net benefit as underestimates.

Reviewers also assessed the appropriateness of

the set of health states available to characterize

morbidity. For more than one-half of sample CT

pairs (19 of the 35), the assigned health states were

viewed as inadequate descriptors of morbidity (e.g.,

the symptoms of stroke and glaucoma, CT pairs 252

and 332 respectively, are not well defined by the list

of health states). Pediatrician reviewers felt that the

health states failed to account for the unique

developmental and physiologic concerns of children

(e.g., problems of weight gain, failure to thrive).

Reviewers also noted several instances where health

states were erroneously assigned to a condition (e.g.,

“cough, wheeze, or trouble breathing” assigned to

anal fissure, line 432).

47 OTA se]wt~ as ~rcmt systemtic sample of 709 CTpairs for this and other analyses. Every 20th ~pairon the list W* selected fmma~dornly

selected starting point.
Chapter 3-The Prioritized List . 67

While outcomes assessment by this method may

vary among individuals according to experience and

opinion, the OTA reviewers’ assessments demonstrate that at best it is a highly subjective process.

Several specific aspects of the outcomes gathering

process that may have contributed to inconsistencies

in outcomes assessment are discussed below.

Provider panels varied in size and methods. There

were no requirements regarding the composition or

size of the clinician panels, which ranged from 3 to

14 members (244). Since the literature suggests that

group judgments vary according to group size and

composition, each panel’s outcome assessments

might have been different if a group of a different

makeup had been assembled (48,69).

Clinician panels were given a uniform charge with

explicit instructions on how to provide outcomes

information, but the actual methods adopted by

various panels to complete their charge varied.

Clinicians generally provided information based on

their training, experience, and clinical judgment, but

sometimes they made a special review of the

professional literature, especially when considering

new methods of treatment, such as transplants.% The

type of data available to assess outcomes varied.

Rarely, Oregon-specific data were available to help

assess outcomes. For example, treatment outcomes

of coronary artery bypass grafting (CABG)49 and

percutaneous transluminal coronary angioplasty

(PTCA) 50 for coronary artery disease (CAD) were

obtained by examining a historical database containing information from approximately 20,000 patients

who had been treated with CABG or PTCA at one

hospital in Portland, Oregon.

There was little attempt to identify clinician bias

in reporting treatment outcomes. The HSC assigned

groups of CT pairs to provider panels according to

their specialty. Neonatologists, for example, were

assigned CT pairs related to the critical care of

newborns, and cardiologists were assigned cardiovascular-related CT pairs. Each CT pair was assigned to only one panel. CT pairs that could fall

under the domain of both internists and specialists

(e.g., ischemic heart disease, diabetic care) were

usually assigned to the more specialized provider

group.

Specialist data could have been systematically

reviewed by other clinician groups (e.g., pediatric

review of neonatology data) to identify whether

specialists tend to overestimate the effectiveness of

their treatments. A systematic primary care provider

review might have been helpful, as these providers

may be most familiar with the outcomes of many

interventions at the 5-year endpoint specified by the

HSC. The HSC’s five primary care clinicians

reviewed outcomes information and all participating

panelists had an opportunity to review the HSC

finalized list.

Important physician groups did not participate in

the process. A list of clinician groups that provided

outcomes information is shown in table 3-9. Two

primary care provider groups, general pediatricians 51 and family practitioners, decided not to

provide information on CT pair-specific treatment

outcomes. Both the pediatricians and family practitioners informed the HSC that outcomes data for

primary care treatments were generally unavailable,

but they encouraged the HSC to get more readily

available nonprimary care outcomes data from

specialty or subspecialty groups.

Clinicians providing outcomes information were

not representative of Oregon physicians. Clinician

panel participants were generally representatives of

the State’s professional societies. The general internists that participated, for example, were senior

officials of the Oregon Society of General Internal

Medicine. The clinical opinions of these officials

might differ from those of nonparticipating physicians. Nonetheless, the HSC made a concerted effort

to ensure participation from as many volunteer

clinicians as possible.

Factors affecting outcomes (e.g., age, comorbidity) were not handled consistently among panels. As

anticipated, the clinician groups often had difficulty

providing outcomes information for “average”

patients and split CT pairs by such factors as age and

4S CWciaM reli~ on tie professio~ literature for only 4 to 5 percent of their outcome judgments (244).

49 C~G iS ~ opa~tive pr~edme in ~~Ch ~ vein from tie leg is removed and surgi~y fiplant~ in a COrOnary artery tO “bypaSS’ all obstruction.

50 ~CA is a nonoPmtive ~temention fi ~~ch a b~loon on tie end of a ca~eter is ~ead~ into an obs~ction of a coronary artery and inflated

mpidiy to “crack’ the obstruction.

51 p~~c~m ~rOvided ~o~tionon fie ~g and fr~uency of well-chiJd care visits. one pediatrician provided outcomes ~ormation on oti~

media treatment (35).
68 ● Evaluation of the Oregon Medicaid Proposal

Table 3-9-Provider and Specialty Groups

Submitting Health Outcomes Data to the Health

Services Commission (HSC)a

Acupuncture

Adult infectious disease

Allergy

Burn care

Cardiovascular surgery

Cardiology

Chiropractic

Cornea transplant

Dentistry

Dermatology

Diabetes

Endocrinology

Gastroenterology

General surgery

Genetics

Hyperbaric oxygen

Metabolic specialists

Internal medicine

Morbid obesity

Naturopathy

Neonatology

Nephrology

Neurology

Neurosurgery

Nurse practitioners

Obstetrics and gynecology

Oncology

Ophthalmology

Oral surgery

Orthopedics

Osteopathy

Otorhinolaryngology

Pain management

Pediatrics b

Pediatric cardiology

Pediatric infectious disease

Pediatric rehabilitation

Pediatric surgery

Physician’s assistants

Plastic surgery

Podiatry

Poison control

Psychiatry

Radiology oncology

Rehabilitation & physical medicine

Rheumatology

Thoracic surgery

Transplant surgery

Trauma

Urology

a This list includes clinician groups that completed structured worksheets

prepared by the HSC to collect treatment-related outcomes information.

Otherclinician groups provided information to the HSC at pubiicmeetings

and in correspondence.

b General pectiat~ians from the Oregon Pediatric Society provided

information to the HSC on the pericdiaty of well-child visits. One

pediatrician provided outcomes data for the acute otitis media CT pair.

SOURCE: D. Coffman, researcher, Oregon Health Services Commission,

Salem, OR, personal communication, Dec. 17, 1991.

comorbidity. 52 53 The internal medicine provider

panel, for example, provided outcomes information

for:

●

●

●

Patients who had only the condition in question,

Patients with other complicating conditions,

and

The average elderly patient (1 12).

Cardiology specialists also stratified their outcomes.

They provided their outcome estimates for CABG

and PTCA interventions for CAD based on the New

York Heart Association classification of the patient

at the time of diagnosis.54 Other panels, on the other

hand, provided more general outcomes information.

Where panels provided detailed information, the

detail was often lost in the final CT pair list. The

HSC extensively reviewed outcomes information

provided by the panels and grouped many treatments

and conditions into general categories. The physicians on the HSC used their judgment to revise

outcomes estimates when information from several

CT pairs were grouped. Revised data sheets were

sent to provider panels with an accompanying memo

asking them review the outcomes information and

the appropriateness of service category placements.

Outcomes information supplied by some of the

specialty groups were subjected to review by a

clinician who had not participated in the initial

process.

The outcomes assessment method may have

underestimated the value of treatments for acute

conditions. Clinician panels provided outcomes

information for treatment effects at 5 years. Many

acute conditions may be resolved eventually without

treatment (e.g., sprains and strains), but treatment

effectively relieves immediate symptoms. With the

estimate of the effects of treatment and lack of

treatment set at 5 years, some treatments effective in

the short term are not identified as effective. In the

example of sprains and strains, comparing the 5-year

outcomes of no treatment with treatment would

indicate no benefit, assuming the sprain or strain

would resolve itself eventually. The benefit of

immediately alleviating symptoms such as pain is

not captured.

Use of Health Outcomes Information To Place

CT Pairs Into Categories

Much of the health outcomes information obtained from clinician panels was inconsistent with

the published literature or contradicted OTA contractor’s clinical judgment, and yet the information

was used to assign most CT pairs to categories. This

may, in part, explain why OTA clinicians found CT

pair category assignment to be debatable in 20

52 Comorbid conditiom are coexisting health problems that tend to worsen the patient’s overidl chnictd condition.

53 me HSC ~ticip~ted tit c~cian panels wo~d have problems ~d iDS&UCtiOIM to pmek s~~d that, “(’I]t is understood tht some OutCOIIle data

may be subjective in nature. A disease may be bimodal with signiilcsntly different outcomes occurring dependent on age of onset or vmy according to

the extent of the disease at the time of presentation (stage). If this is the case, please use two or more lines to define the condition . . . .Please think of

the average patient that presents with this conditiow not the extremes.’

54 ~eNewYo~H~Assoc~tion ~~s~lcation systems~a~~patients wi~c~ fito four sep~tecategones depending on their type and SeVCT@

of symptoms.
Chapter 3--The Prioritized List ● 69

percent of the sample of CT pairs they reviewed.

Even if one assumes that the health outcomes

information was an accurate reflection of clinical

practice in Oregon, there are some apparent inconsistencies in CT pair category assignment. Nearly

one-quarter (23 percent) of CT pairs in category 12,

for example, have high with-treatment benefit

scores

55 (i.e., 0.9 or above), despite being defined as

conditions for which treatment is ‘‘without return to

previous health.” The health outcomes estimates

appear to be consistent with category 17 placement

where all 31 CT pairs have low net-benefit values

(less than 0.4) indicating “minimal or no improvement in quality of life.

Incorporation of Oregonians’ Health State

Preferences Into the Measurement

of Treatment Outcomes

An innovative aspect of the HSC prioritization

method is the incorporation of public perceptions of

health states into the assessment of treatment

outcomes. Public preferences for health states were

obtained from a telephone survey and average

preference weights were then incorporated into the

estimate of a CT pair’s net benefit. Neither net

benefit nor the incorporated survey weights were

important determinants of CT pair list placement,

but the effort to measure public health state preferences was an important conceptual aspect of the

prioritization process.

The preference weights derived from the telephone survey have a number of problems that render

them inadequate representations of true public

preferences as applied in Oregon’s prioritization

process (OTA analyses of the survey are described

in more detail in app. C):

. More than one-third of respondents (381 of

1001) gave inconsistent responses, indicating

that they had difficulty with the telephone

interview. More than one-quarter (27 percent)

of respondents, for example, provided illogical

responses to the nested questions pertaining to

functional limitations. One example of such a

response is giving a less-favorable score to a

●

●

health state defined by one fictional limitation (e.g., used a wheelchair) than to a health

state including that and an additional limitation

(e.g., used a wheelchair and needed help going

to the bathroom or eating). Respondents with

inconsistent responses were significantly more

likely to be insured through the Medicaid

program, have incomes at or below the Federal

poverty level, and be members of a racial/

ethnic minority group.

The HSC decided to use all values from the

survey, despite the logical inconsistencies of

some responses. According to OTA analyses,

however, adjusting the data for inconsistencies

does alter the weights and had net benefit been

used to rank CT pairs within category, the order

of some CT pairs would have changed had

adjusted weights been used.56 But even if the

survey-derived weights were adjusted, evidence of respondent confusion might invalidate

their use.

Respondent confusion may account for the

presence of some counter-intuitive weights.

Having stomach aches, vomiting, or diarrhea

(-0.370), for example, was viewed as comparable to having a bad burn over large areas of the

body (-0.372).

For many states, individual scores varied widely

from the average, suggesting either that there is

general disagreement regarding the implications of the specified health states or that health

states were too broadly defined (table 3-10).57

Many of the health states include a wide range

of conditions (e.g., coma and fainting are

included in the same health state), and it is

possible that different weights would have been

obtained if health states had been more precisely defined.

Weights differ significantly by respondent sociodemographic characteristics such as age and

sex and according to whether the respondent

had experienced the health state. Among the

trends noted are that: respondents who had

experienced the health state in question viewed

55 Net ben#lt is tie difference between the assessed bemzfit with and without tr~tment.

56 ~~~ted 49 ~p~s (7 ~rcent of 709 CT ptis) would move 10 or more lines if adjusted wei@s were used instead of ~d@st~ wei@s.

These shifts would not have changed coverage status with coverage set at line 587.

57 ~e Vfition of fidivldu~ ~egon smms ~ reported in @ble 3.10 ~ of tie we @@de ~ istypi~ly feud in preference m~ s. Available

evidence suggests that while individuals within groups express differences in preference, preference weights are relatively constant ffom group to group

(260).
70 ● Evaluation of the Oregon Medicaid Proposal

Table 3-10-Functional Limitation and Health State/Symptom Weights, Standard Deviations,

and 95 Percent Confidence Intervals

Oregon Standard Confidence

Survey item weight deviation interval a

Functional limitation

Mobility

Ml. Have to stay at hospital or nursing home. . . . . . . . . . . . . . . . . . . . . . . . .

M2. Cannot drive a car or use public transportation . . . . . . . . . . . . . . . . . . .

Physical activity

PI. Have to be in bed or in a wheelchair controlled by someone else . . . . .

P2. Have to use a walker or wheelchair under your own control . . . . . . . . .

Social activity

S1. Need help to eat or go to the bathroom. . . . . . . . . . . . . . . . . . . . . . . . . .

S2. Are limited in the recreational activities you may participate in. . . . . . .

Health states/symptoms

HI.

H2.

H3.

H4.

H5.

H6.

H7.

H8.

H9.

H1O.

H11.

H12.

H13.

H14.

H15.

H16.

H17.

H18.

H19.

H20.

H21 .

H22.

H23.

Have losses of consciousness from seizures, blackouts, or coma. . . .

Have a bad burn over large areas of your body ... , . . . . . . . . . . . . . . .

Have drainage from your sexual organs and discomfort or pain . . . . . .

Have trouble learning, remembering, or thinking dearly . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed or broken leg,

but you have no other limitations on activity. . . . . . . . . . . . . . . . . . . . . .

Have a painful or weak rendition of the back or joints . . . . . . . . . . . . . .

Have pain while you are urinating or having a bowel movement. ... , .

Have stomach aches, vomiting, or diarrhea . . . . . . . . . . . . . . . . . . . . . . .

Experience a lot of tiredness or weakness. . . . . . . . . . . . . . . . . . . . . . . .

Cough, wheeze, or have trouble breathing . . . . . . . . . . . . . . . . . . . . . . .

Are often depressed or upset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have headaches or dizziness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have an itchy rash over large areas of your body . . . . . . . . . . . . . . . . .

Have trouble talking, such as a lisp, stuttering, or hoarseness . . . . . . .

Have pain or discomfort in your eyes or vision problems that

corrective lenses can’t fix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are overweight or have acne on your face ., . . . . . . . . . . . . . . . . . . . . .

Have pain in your ear or trouble hearing . . . . . . . . . . . . . . . . . . . . . . . . .

Are on prescribed medicine or a prescribed diet for health reasons , . .

Wear glasses or contact lenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble falling asleep or staying asleep . . . . . . . . . . . . . . . . . . . . .

Have trouble with sexual interest or performance. . . . . . . . . . . . . . . . . .

Can’t stop worrying. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with the use of drugs or alcohol . . . . . . . . . . . . . . . . . . . . .

-0.049

-0.046

-0.560

-0.373

-0.106

-0.062

-0.114

-0.372

-0.325

-0.367

-0.253

-0.253

-0.299

-0.370

-0.275

-0.318

-0.326

-0.305

-0,297

-0.188

-0.248

-0.215

-0.217

-0.123 b

-0.055

-0.248

-0.276

-0.215

-0.455

.137

.112

.257

.246

.146

.099

.175

.265

.240

.235

.210

.210

.236

.239

.201

.224

.234

.221

.227

.202

.212

.227

.204

.183

.166

.218

.246

.216

.290

(-0.057, -0.041)

(-0.054, -0.038)

(-0.575, -0.543)

(-0.389, -0.357)

(-0.1 16, -0.096)

(-0.068, -0.056)

(-0.126, -0.102)

(-0.388, -0.356)

(-0.341, -0.309)

(-0.381, -0.353)

(--0.267, -0.239)

(-0.267, -0.239)

(-4.315, -0.283)

(-0.386, -0.354)

(-0.287, -0.263)

(-0.332, -0.304)

(-0.340, -0.312)

(-0.319, -0.291)

(-0.311, -0.283)

(-0.200, -0.176)

(-0.262, -0.234)

(-0.229, -0.201)

(-0.229, -0.205)

(-0.135, -0.1 11)

(-0.065, -0.045)

(-0.262, -0.234)

(-0.292, -0.260)

(-0.229, -.201)

(4.473. -0.437

a The 95 ~r~nt~fiden~ interval shows the range of values that should include the true weight 95 pereent of the time. The eOnfkdenCe interval k -kulated

by taking the weight +/- two times the standard error.

b The Health serv~= Commission deeided not to use this weight (s- text).

SOURCE: Office of Technology Assessment, 1992, based on analyses of 1990 telephone survey data supplied by the Oregon Health Serviees Commission.

12 health states more favorably than those who instead of weights for the entire sample, the

had not experienced them (e.g., having diffi- relative position of 45 CT pairs (6 percent of

culty in walking); increased age was associated 709 CT pairs) would have changed by 10 or

with less favorable scores for 11 of the health more lines. Following these shifts, six CT pairs

states (e.g., have trouble talking); males viewed would have changed coverage status with

3 health states as being significantly worse than coverage set at line 587 (three would have

did females (e.g., trouble with sexual interest or moved up to be covered, three would have

performance) 58 (table 3-11). moved down to lose coverage). Selective use of

If net benefit had been used to order CT pairs women’s weights for health conditions such as

within categories and the weights of those who dysmenorrhea (CT pair 574) also would affect

had experienced the health state were used the ranking of some CT pairs.59

M Womm viewed three health states as being signillcantly worse than did men (e.g., hsving a bd bin).

S9 Fore-le, menview~ ~xw~e~@-ge~m sex~org~ ~se~dy-tionless favorfilyhntid women. US@ wOmen’S wdghtS

for these symptoms, which are associated with dyamenorrheq would have the effect of moving that CX pair down the list by 10 lines (see app. C, box

C-5, for net benefit calculations for this CT pair).
Table 3-1 l—Differences in Oregon’s Preference Weights by Medicaid Status, Poverty, Race/Ethnicity, Age, Sex, Experience With Problem,

and Metro/Nonmetro Residencea

Medicaid Experience Residence

Survey items status b Povertyc Race/ethnicityd Agee Sexf with problemg metro/nonmetroh

Functional limitations

Mobility

Ml. Have to stay at hospital or nursing home . . . . . . . . . .

M2. Cannot drive a car or use public transportation . . . . .

Physical activity

PI. Have to be in bed or in a wheelchair controlled

by someone else . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

P2. Have to use a walker or wheelchair under

your own control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Social activity

S1 . Need help to eat or go to the bathroom . . . . . . . . . . . .

S2. Are limited in the recreational activities you

may participate in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Health states/symptoms

— J

—

—

—

—

—

—

— —

—

—

— — —

— J —

J

J

— J — —

— — — J

HI.

H2.

H3.

H4.

H5.

H6.

H7.

H8.

H9.

H1O.

H11.

H12.

Experience loss of consciousness due to seizures,

blackouts, or coma. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a bad burn over large areas of your body. . . . .

Have drainage from your sexual organs and

discomfort or pain . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble learning, remembering,

or thinking dearly . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed

or broken leg, but you have no other limitations

on activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a painful or weak condition of the back

or joints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain while you are urinating or having a

bowel movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have stomach aches, vomiting, or diarrhea. . . . . . . .

Experience a lot of tiredness or weakness . . . . . . . . .

Cough, wheeze, or have trouble breathing . . . . . . . . .

Often depressed or upset . . . . . . . . . . . . . . . . . . . . . . .

Have headaches or dizziness . . . . . . . . . . . . . . . . . . . .

7

— — —

—

—

— —

J

—

— J J

— — — J —

— — — J —

— — — —

— —

—

—

—

—

—

—

—

—

—

—

J

—

—

— —

— J J —
Table 3-n-Differences in Oregon’s Preference Weights by Medicaid Status, Poverty, Race/Ethnicity, Age, Sex, Experience With Problem,

and Metro/Nonmetro Residencea

--Continued

Medicaid Experience Residence

Survey items statusb Povertyc Race/ethnicity d Agee Sexf with problemg metro/nonmetroh

H13.

H14.

H15.

H16.

H17.

H18.

H19.

H20.

H21 .

H22.

H23.

.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

J

—

—

J—

—

—

J

J

—

—

—

J—

J

— —

— —

—

— 7 — —

— J

— J

7— .$— — —

—

—

—

—

—

—

—

—

—

—

—

a Multivanate ana@eS(analySiS of variance) were “S~ t. ~=s whether item.specif~ weights varied significant~ (itibt~ by &ecks) by respondent characteristics.

b Those reporting anyone in the household hokting a Medicaid card were coded as being a Medicaid participant (n*).

c Those living at or below the Federal poverty level (FPL) were coded as poverty level (n=90).

d Bla&~, Ameri=n Indians, ~ental~, H~pan~, and those rewfling mix~ hefltage were ~~ as being minority group members (n+5). Minority grOIJp membOrS pOr~iVOd

needing help for self-care (s1) (p.01 ) more favorably than nonminority group members and perceived recreation limits (S2) (.02), sexual organ discomfort (H3) (p=.02), ear

pain (Hl 7) (p-.O4), and sleep problems (H20) (p=.03) less favorably than nonminority group members.

0 Age w= trmt~ ~ a ~ntinuous variable. ~age ina~~, there were more favorab~ weights for hospital stays (Ml) (p.01 ), needing heip for se!f~re (S1 ) (pD.008), and

sexual dysfunction (H21 ) (.02). As age incxeased, there were less favorable weights for burns (H2) (.006), sexual organ discomfort (H3) (P.03), urinationkkfecation pain (H7)

(~-03), stomach aties (H8) (P-.000), tiradne= (H9) (p-.O5), cough (H1O) (P=.000), headacheddizziness (H12) (p-.000), rash (H13) (pd02), trouble talking (H14) (p.02),

overweight/acne (H16) (p-.003), and trouble with drugs/alcohol (H23) (p=.01 ).

f ~men (~598) Mewd three states ~ king signifi=nt~ worse than d~ men (n_403): needing help for self~re (S1) (@.02), IOSS of consciousness (HI ) (~.w2), and bUrnS

(H2) (p-.004). Men viewed three states as being significantly worse than did women: using a walker or wheelchair under own control (P2) (p-.O2), sexual organ discom fort (H3)

(p-.O2), and sexual dysfunction (H21) (p- .005).

g Weights are significantly morefavorable for respondents with experience with the condition than forthosewithout such experience for 12conditions: using awalkerorwheelchair

under own control (P2) (n=78) (p-.000), trouble learnin@remembering (H4) (n-l 21) (p-.005), difficulty walking (H5) (n=138) (p-.Ol2), stomach aches (H8) (n=381 ) (p-.O3),

tiredness,lweakness (H9) (n-230) (~.05), cough (Hl O) (n-290) (~.000), headaches/dizziness (HI 2) (n=385) (p=.005), ovemmightkme (Hl 6) (n436) (p-.007), prescdption

medicationaldiet (H18) (nd36) (p.000), glasses (H19) (nA83) (.002), sleep problems (H20) (n439) (p-.O2), and sexual dysfunction (H21 ) (n-84) (p-.Ol ).

h weight~of r=~ents of metmplitan ar~ (SMAs) (n-&’6) were signifi~ntly more favom~ethan Weights of nonmetm resid~ts (n_324)f0rrwmtiOna[ aCtiVity limitations (S2)

(p-.O2), sexual organ d“kcmfort (H3) (pdkl), and cough (H1O) (p-.009).

SOURCE: Office of Technology Assessment, 1992, based on analyses of survey data supplied by the Oregon Health services Commission, 1990.
Chapter 3--The Prioritized List . 73

That Oregon’s preference weights varied by

sociodemographic and health experience

should not be surprising. Kaplan and his

colleagues report negative correlations between individuals’ preference scores and age,

number of chronic medical conditions, number

of reported symptoms or problems, number of

physician contacts, and dysfunctional status

(109). Such differences, however, raise questions regarding the appropriate use of the

weights (e.g., whether women’s weights should

be used to assess conditions affecting only

women). 60

In addition to problems related to the validity of

the weights themselves, there are two potential

problems with how the weights were applied:

●

●

The list of 29 defined health states were used by

both the clinicians providing outcomes information and the survey respondents valuing

those health states. However, the descriptions

of the health states that the clinicians used were

more lengthy and often substantially different

from those used for the survey. For example,

when providing outcomes information, clinicians could use the descriptor ‘‘pain, stiffness,

weakness, numbness, or other discomfort in

chest, stomach (including hernia or rupture),

side, neck, back, hips, or any joints or hands,

feet, arms, or legs. ” For the telephone survey

this symptom was abbreviated to “have a

painful or weak condition of the back or

joints.” The weights from the survey might

have been less favorable if the more extensive

description of symptoms had been used.

Different clinical endpoints were defined for

the survey and for clinicians supplying outcome information. Clinicians were told to

estimate outcomes that would be expected to

occur in 5 years, while survey respondents

providing health state preferences were told to

assume that the health state was permanent.

Although some symptoms or functional limitations present at 5 years are probably permanent,

some of the weights might have been more

favorable if respondents had assumed that the

health condition described was not necessarily

permanent. Furthermore, some immediate consequences of treatment (e.g., alleviation of pain

following surgery) that may be important to

patients are not accounted for using the clinicians’ 5-year endpoint.

Incorporation of Community Values

Incorporating community values into the prioritization process was an important goal of the Oregon

Basic Health Services Act, and the HSC attempted

to become informed of public values through both

public hearings and community meetings. Despite a

concerted effort to solicit the views of the population

most likely to be affected by the demonstration (i.e.,

Medicaid recipients, those without medical insurance), the majority of community meeting attendees

(69 percent) were health care providers (91). Although these individuals may have tried to express

the needs of their patients, they also had their own

interests to express. On the other hand, given the

nature of the values discussed at the meetings (see

box 3-G), it is unlikely that different values would

have been expressed had the socio-demographic

composition of the group been different (e.g., the

high prioritization of services for mothers and

children and the low prioritization of infertility

services) (83,105).

Regardless of the representativeness of the meetings, the HSC category rankings do seem to reflect

the values expressed at them. Potentially life-saving

treatments, maternal and child health services,

preventive services, dental services, and treatments

that improve quality of life were highly ranked

categories, while treatments for conditions for which

minimal or no improvement in quality of life is

expected were generally ranked low.

Factors the HSC May Consider When Issuing

Another Prioritized List in 1993

Some of the criticisms raised in this section have

been acknowledged by the HSC, which is making

technical amendments to the list. The list issued May

1, 1991 is not unchangeable. The legislation stipulates that the list be under continual review and a

new list issued every 2 years. Some factors that may

be considered or considered more fully in the future

include (193):

@ Differen@s between the Oregon weights and those measured by Kaplan (preferences of San Diego County, California residents were assessed in

the mid- 1970s) are discussed in app. C.
74 ● Evaluation of the Oregon Medicaid Proposal

●

●

●

●

●

●

●

●

●

●

●

●

Comorbidity,

Severity of illness,

Public preference for immediate versus future

health benefits,

Ranking preventive services according to their

relative effectiveness,

Societal impact of the prevention of contagious

disease,

Societal impact of fertility/birth control measures,

Personal responsibility for condition,

Condition incidence and prevalence,

Discounting of future costs and benefits,

Costs of health maintenance when a Life is

saved,

Costs of non-treatment or of alternative treatments (e.g., dialysis instead of liver transplant),

and

Social costs (e.g., unemployment due to disability).

The Implications of Integrating Additional

Services Into the Prioritized List

Mental health and chemical dependency (MHCD)

services would be incorporated into the 1993 version

of the list, and some services for the aged, blind, and

disabled are expected to be integrated. The HSC’s

MHCD subcommittee prioritized 51 MHCD services using a similar approach to the HSC and issued

an integrated list of 760 health and MHCD services. 61 The subcommittee recommended that at a

minimum the frost 39 of the 51 MHCD services be

covered (244). Actuarial estimates are not yet

available for the integrated list, but including

expensive MHCD services may require substantial

additional expenditures to maintain coverage of the

current list of 587 health services (96). The process

of identifying and prioritizing services for the aged,

blind, and disabled is just beginning, so it is unclear

how their inclusion might affect the prioritized list.

EVALUATING THE

PRIORITIZED LIST

Clinical Critique of the Prioritized List

A clinical review of the list was undertaken on

OTA’s behalf by four physicians (two internists and

two pediatricians) who reviewed the entire prioritized list (14,80,235). For this and other analyses, the

clinical contractors were instructed to use readily

available published information (e.g., review articles, medical textbooks) and consultations with

experts. An informal review of the entire list

identified the following problems associated with its

use:

●

●

●

Ranked too low—There are numerous examples of CT pairs that are more effective or

clinically important than other nearby CT pairs.

Examples of CT pairs where clinicians may

find it hard to accept noncoverage for treatment

include medical therapy and thymectomy for

myasthenia gravis (line 593),62 and medical

therapy for chronic bronchitis (line 643), sarcoidosis (line 644), and sprains and strains

(lines 653 and 655).

Ranked too high—There are numerous CT

pairs that are less effective or clinically important than other nearby CT pairs. Examples

include line 495, excision of ganglion of tendon

or joint, which is usually a trivial condition, and

line 606, medical therapy for hepatorenal

syndrome, for which treatment is generally

regarded as ineffective.

Related treatment rankings-Some alternative treatments for the same condition are

inappropriately ranked given the usual sequence of current practice. In some cases,

surgical therapy is ranked above line 587 and

medical therapy ranked below line 587. Surgical treatment for peripheral enthesopathies (CT

pair 493), for example, is covered, while

medical therapy is not (CT pair 642).63 Clinicians generally try medical therapy, and proceed to surgery only if medical therapy fails.

Such rankings create counterproductive incen61 TIEHSC plans to ftize an ~te~td ht summer 1992 (244).

62 ~ HSC iS Co~i&@ mo~ my~~~a ~vis from he 593 to &tW&n ~es 159 ~d 160 w pm of the tNhIlic~ tlIIleIldIIlent PKxXSS. ThiS

change is expected to be refleeted in the May 1992 revised list (190).

63 me HSC, ~ pm of tie t~~~~~dm~t pr~~s, is ~mid~g r~ef~g CT pfi 493 ~d moving it down the liSt to bChVWXl hlCS 531 d

532. The redefd CT pair would include surgical treatment for all peripheml enthesopathies. Medical therapy for peripheral enthesopathies would

remain uncovered at line 642 (190),
Chapter 3-The Prioritized List . 75

tives for providers, encouraging expensive and

invasive therapy.

. Heterogeneous patients within CT pairsPatients within many CT pairs are heterogeneous with respect to expected outcomes and

therefore some subgroups of patients within CT

pairs below the line could be expected to

benefit from treatment. Physicians may have

difficulty denying potentially beneficial treatment to some of these patients. CT pair 640, for

example, includes testicular hyperfunction, which

may require no treatment, and Schmidt’s syndrome, which is fatal without treatment of the

adrenal insufficiency and for which the treatment is inexpensive and completely effective

(311).

. Distinctions between some CT pairs are very

subjective--Distinctions between some CT

pairs, such as cancer and HIV-related CT pairs,

require very subjective and arbitrary judgments

of clinicians. There are 27 site-specific cancer

CT pairs above the coverage line specified as

“treatable.’ Line 688 specifies treatments for

cancer of various sites with distant metastasis

where treatment will not result in a 10 percent

5-year chance of survival. A similar distinction

is made for HIV disease. Medical therapy for

HIV disease is covered at line 158, but it is not

covered if the patient is in the end stages of HIV

disease (CT pair 702). End-stage HIV disease

is defined as the last 6 months of life. Comfort

care would be available for terminal ‘ ‘untreatable” conditions. It may be difficult for clinicians to classify a condition as untreatable or

terminal. In fact, a determination of a poor

prognosis for patients is often made only after

a patient fails to respond to treatment.

. Inseparability of treatment from diagnostic

evaluation—For some CT pairs, the treatment

is largely inseparable from a reasonable diagnostic evaluation. In the case of surgery for

peritoneal adhesions (line 508), for example,

the diagnosis is made at the time of laparotomy,

the surgical procedure employed to treat the

condition.

. Many opportunities to up- or down-codeDecisions to categorize patients by CT pair is

in many cases subjective so that up- or downcoding could easily occur. Sometimes a CT pair

is split according to severity of illness. Lung

resection for congenital cystic lung disease, for

example, occurs twice on the list, once for the

mild or moderate form (CT pair 212) and once

for the severe form (CT pair 693). The distinction between mild or moderate and severe is

subjective, and clinicians could make such

distinctions according to their inclination to

treat. In other cases, the treatment might not be

covered for the patient’s immediate condition,

but if the physician coded the patient according

to his or her underlying or secondary condition,

the treatment could be covered. Cholecystectomy is an uncovered treatment, but it is

sometimes indicated for patients with sicklecell anemia. The surgery might be covered if

coded as a treatment for sickle-cell anemia (CT

pair 160). Treatment of terminal cancer is not

covered, but when such patients experience a

complication such as anemia or intestinal

blockage, that treatment could be covered

under higher ranking CT pairs.

. Empty CT pairs--Some treatments ranked

near the bottom of the list represent ineffective

care that in practice is rarely provided, giving

their lack of coverage little meaning. Oregon

neonatologists are not now, for example, providing aggressive medical treatment to anencephalic babies (CT’ pair 709), or to extremely

low-birth-weight babies that are considered

nonviable (babies weighing less than 500

grams and born at less than 23 weeks gestation)

(CT pair 708) (57).

. Confusion regarding where certain conditions and their treatments are on the list—

Until the list is corrected and provider instructions for using it completed, coding errors and

inconsistencies would lead to confusion as

physicians try to locate specific conditions or

treatments on the list. Many CT pairs have

duplicate or missing ICD-9-CM or CPT--4

codes. ICD-9-CM code 722.7 (intervertebral

disc disorder with myelopathy), for example,

appears within two CT pairs, one above and the

other below the line (CT pair 58&medical and

surgical treatment for spondylosis and other

chronic disorders of back, and CT pair 588--

thoracic-lumbar laminectomy or medical therapy for intervertebral disc disorders). It is

unclear what the intent for coverage is for this

condition, Another source of confusion is

inconsistency between the CT pair descriptions

and the ICD-9-CM or CPT-4 codes listed

within the CT pair. Treatable dementia (line

230), for example, includes conditions that
76 ● Evaluation of the Oregon Medicaid Proposal

some clinicians would not consider effectively

treated (e.g., multi-infarct dementia).

It is not surprising that OTA clinical reviewers

found numerous examples of CT pairs that, in their

opinion, were ranked either too high or too low,

given that the ranking was dependent on the

judgments of HSC commissioners. Clinicians may

have difficulty using the list as it now stands, either

because of its ambiguities or because it forces

clinicians to accept judgments that may not coincide

with their own or do not seem applicable to

individual patients. The clinical consequences to

beneficiaries of applying the prioritized list are

discussed in the following chapters.

SUMMARY AND CONCLUSIONS

The Prioritization Process

The HSC prioritized CT pairs using a two-staged

ranking process, followed by a reordering of selected

CT pairs on the list according to its judgment. In the

first stage of the ranking process, CT pairs were

assigned to 1 of 17 health service categories. The

categories were then ranked using a group consensus

method intended to reflect community health care

values expressed at public meetings. In the second

stage, CT pairs were ranked within categories by a

“net benefit” term, which indicates the likely

improvement in health-related quality of life associated with treatment for the specified condition. Its

calculation integrates information from two principal sources: health care providers’ assessments of

treatment outcomes, and Oregonians’ health state

preferences elicited through a telephone survey.

Following the two-staged ranking, the HSC used

its best judgment to reorder some CT pairs. Selected

CT pairs were moved up and down the list either

within or beyond the range of their original category

placement.

Determinants of CT Pair List Placement

OTA concludes that CT pair order on the prioritized list was determined largely by judgment-based

HSC rankings of service categories and “hand”

adjustments of the list. The hand adjustments of the

list were extensive; the HSC moved nearly onequarter (24 percent) of CT pairs at least 100 lines up

or down the list. CT pair health service category

assignment remains an important determinant of CT

pair placement on the prioritized list, but HSC

adjustment of the list reduced the importance of “net

benefit,’ which had been used to order CT pairs

within categories. Given that rankings depended on

HSC judgments, it is unlikely that the exact rankings

of the final list would be reproduced if a similar

process were undertaken by others. That the list may

not be replicable does not itself necessarily condemn

its use in Oregon, but it does imply that the list

cannot be adopted by other States and retain

whatever meaning it has.

Given that Oregon’s prioritized list is widely

discussed as an example of “rationing,” it is

important to note that certain factors often discussed

as part of ‘rationing” are relatively unimportant to

the list. For example, CT pair-related cost and

cost-effectiveness were not important determinants

of CT pair order on the list. Nearly one-half of the

highest-cost CT pairs are found within the top 300

lines of the list, and as many as one-third of low-cost

CT pairs fall below line 587. The relative order of

some CT pairs may appear counterintuitive to some

if the list is viewed from a cost-effectiveness

perspective. Simple and inexpensive-to-treat sprains

and strains, for example, fall below the coverage line

while expensive transplants generally fall above the

line.

Also, the relative effectiveness of diagnostic tests

were not considered as part of prioritization-all

diagnostic tests are included in a hypothetical CT

pair O. Other mechanisms that area part of Oregon’s

plan (e.g., utilization review, managed care) are to

control any inappropriate use of diagnostic services.

Finally, while the list does seem to concentrate

some conditions for which treatment is regarded as

ineffective at the bottom of the list, the list itself does

not effectively eliminate what many would consider

“futile’ care. For example, although the list does

prioritize comfort care over the treatment of terminal

cancer, a patient with complications of terminal

cancer (e.g., anemia, surgical treatment of an intestinal blockage) could be treated under the plan.

Critique of HSC Prioritization Process

Community Meetings and Public Hearings--

The community meetings and public hearings held

as part of the prioritization process provided an

important opportunity for the public to raise issues

and participate in the process. Some of the public

values expressed at these meetings seem to be

reflected in the list. However, the views expressed at
Chapter 3--The Prioritized List ● 77

the community meetings may not be representative

of a cross section of Oregon residents. Despite a

concerted effort on the part of meeting organizers to

reach out to populations likely to be affected by the

demonstration, the majority of participants were

health care providers.

A potential liability of using a focus group or

‘‘town meeting’ approach to setting priorities is that

irrespective of whether balanced representation is

achieved, various stakeholders are likely to skew the

outcomes. Treatments affecting subpopulations might

suffer if majority consensus or well-funded special

interest groups drive resource allocation decisions.

If the demonstration proceeds, awareness of the

importance of the prioritized list would be raised and

providers and various interest groups would probably lobby the HSC for special consideration. Representatives of the HSC expect this to occur (244) and

point out that such efforts routinely occur on a

national basis (e.g., lobbying Congress for Medicare

coverage for certain services).

The HSC would require technical and analytic

expertise to judge the validity of interest group

claims to avoid being swayed by biased or faulty

data. Such expertise would be needed both for the

biannual preparation of a new list and for the

technical amendment process that would occur in

the interim. The HSC now has a very small technical

staff, and Ballot Measure 5-related cuts may reduce

the available staff by as much as 25 percent, limiting

the HSC’s ability to provide necessary analytic

support (191).

Treatment Outcomes Information-Net benefit

was not as important a determinant of CT pair

placement on the list as other aspects of the

prioritization process. Nonetheless, the outcome

information provided to the HSC by Oregon clinicians and the public preferences elicited by telephone were vital conceptual parts of the process.

The HSC relied on panels of clinicians to provide

outcomes information based primarily on their own

clinical judgment rather than extensive reviews of

the medical literature. OTA clinician reviewers

disagreed with most of the outcomes information for

a sample of CT pairs they examined, suggesting that

outcomes assessment by this method is a highly

subjective process that may vary substantially among

individuals according to experience and opinion.

It was difficult for Oregon clinicians to provide

outcomes information in accordance with their own

experience because individual CT pairs often aggregated a wide range of conditions and treatments, and

because there was no way to systematically capture

the effects of factors such as age and comorbidity on

outcome. Several specific aspects of the outcomes

gathering process may have also contributed to

errors and inconsistencies in outcomes assessment

(e.g., the fact that clinician panels providing outcomes information differed in composition, size, and

methods).

One of the most innovative aspects of Oregon’s

prioritization process is the integration of quality-oflife measures into treatment outcome assessments. A

uniform set of health states were used to describe all

treatment outcomes, making it possible to compare

such diverse treatments as medical therapy for

diaper rash and bone marrow transplantation for

leukemia. Clinician-supplied outcomes information

was specified in terms of the presence or absence of

these health states, which were in turn weighted

according to public preferences or the relative

desirability of experiencing the health states (as

determined by a statewide phone survey). Using the

weights allows the prioritization of a treatment that

avoids a particularly dreaded symptom over another

treatment that avoids a less onerous one.

OTA analyses of the telephone survey responses

and the resultant weights, however, suggest that it is

premature to apply these measures to resource

allocation decisions. More research on eliciting

weights (e.g., in-person vs. phone interviews),

defining health states to be measured, and methods

to calculate weights are needed before they can be

applied with scientific validity.

Clinical Critique of the Prioritized List

From a clinical perspective, a weakness in the

prioritization methodology is the reliance on broadly

defined service categories (e.g., chronic fatal, acute

non-fatal). These categories were an important

determinant of CT pair order on the list, but they are

clinically problematic because many of the distinctions among categories are not useful measures of

treatment ‘‘importance’ (e.g., acute vs. chronic,

repetitive vs. one-time treatment). On the other

hand, the service-defined categories (e.g., reproductive health, dental services) were a useful organizational tool which enabled the HSC to incorporate
78 ● Evaluation of the Oregon Medicaid Proposal

public values elicited at community meetings and

hearings. For example, the HSC was able to rank

high women’s and children’s services and rank low

treatments for infertility.

A major problem with the list is that many diverse

conditions are aggregated into CT pairs and many

CT pairs include conditions of varying severity and

responsiveness to treatment. The HSC used its

judgment to rank CT pairs for the average patient

within the CT pair. From the perspective of the

patients and physicians using the list, however, the

list may seem unreasonable when applied to individuals because of the level of aggregation of conditions and treatments within CT pairs. There are

numerous examples of patient subpopulations within

below-the-line CT pairs that might benefit substantially from treatment, and there are other examples

of patient subpopulations within above-the-line CT

pairs for which treatment might be ineffective.

Clinicians and patients may have difficulty accepting the validity of the list when the patient’s

treatment falls below the line, but the treatment is

expected to improve the condition because of the

patient’s unique clinical circumstances. Lastly, there

are numerous technical errors in the list that if not

corrected could contribute to misinterpretation of

the scope of conditions or treatments included in CT

pairs on the list.

I n summary, a quantified prioritization process

incorporating net-benefit values was not possible, in

part because accurate health outcome information is

not yet available for most treatments. Even if such

data were available, however, it would be difficult to

apply in the Oregon context because of the variety of

conditions and treatments included in many CT pairs

and the inability for CT pair-based outcomes estimates to account for such factors such as age and

comorbidity. If CT pairs were disaggregated to

better specify conditions on such factors as comorbidity and better define patient populations by

factors such as age, the list could number in the tens

of thousands and the subjective processes used by

the HSC would become unmanageable. One group

that has attempted to use a clinician consensus

process to generate outcomes for certain procedures,

for example, has enumerated as many as 2,000

indications for hysterectomy alone (33). If conditions were disaggregated, a more systematic or

quantified approach than that used by the HSC

would have to be used. Even if a quantified approach

were developed to rank even a much less extensive

list, however, the list might not serve as a useful

guide to health benefits-it would be nearly impossible to actuarially price such a list and it would be

impractical for clinicians to use it. Furthermore,

difficult ethical questions would arise as rankings by

treatment effectiveness would certainly be influenced by such factors as age and presence of

disability.

Applying cost-effectiveness analysis to a list

made up of CT pairs is also problematic. CT pairs are

defined so broadly that clinical approaches of widely

varying costs and effectiveness are buried within a

single CT pair (e.g., treatment is often defined as

medical or surgical therapy, which could include

anything from an office visit to invasive surgery).

Quantifying costs and benefits and adjusting for

quality of life over a lifetime for all health services

are daunting tasks which are theoretically possible

but unlikely to be achieved in the near future.

Information will be available incrementally to help

guide specific health resource allocation decisions

and to improve physician-patient counseling and

decisionmaking.

The Oregon prioritization process has provided

some valuable lessons. Public awareness of limited

health care resources has been raised and a concerted

effort was made to identify the medical and social

value of treatments as assessed by community

physicians and patients. Refinements and variations

of the process could be used to: define the extremes

of coverage (i.e., highly prioritized care and ‘futile’

or socially unimportant care), guide utilization

management programs, and focus the efforts of the

health service research community.
Chapter 4

Implications for

Health Care Providers

Contents

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

CURRENT STATUS OF PROVIDERS IN OREGON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Provider Supply, Distribution, and Financial Characteristics . . . . . . . . . . . . . . . . . . . . . . . 81

Current Medicaid Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90

HEALTH CARE DELIVERY UNDER THE DEMONSTRATION . . . . . . . . . . . . . . . . . . . 94

Providers in the Proposed System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95

Distribution of Enrollees by Delivery System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Cavitation Rate Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

IMPLICATIONS OF DEMONSTRATION CHANGES FOR PROVIDERS . . . . . . . . . . 101

Delivery System Changes . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Reimbursement Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102

Impact of the prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Overall Implications for Provider Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Issues for Selected Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

SUMMARY OF CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114

Organizational and Financial Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Impact of the Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Issues for Selected Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

(oonflnuedon nexfpage)
Contents-Continued

Tables

Table Page

4-1. Number and Size of Oregon Short-Term General Hospitals by Geographic Area,

Current (1991) Medicaid Delivery System Status, and Anticipated Delivery

System Status Under the Proposed Demonstration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

4-2. Net Operating Margins of Oregon Short-Term General Hospitals,

1987 and 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

4-3. Location, 1990 Patient Population Characteristics, and Proposed Status Under

the Demonstration of Oregon’s Federally Qualified Health Centers . . . . . . . . . . . . . . 84

4-4. Insurance Coverage and Income Characteristics of Patients

in Oregon Primary Care Clinics, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

4-5. Number of Physicians per 100,000 Population: United States and Oregon,

Selected Years, 1980-90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86

4-6. Number of Primary Care Physicians per 100,000 Population, by Specialty:

United States and Oregon, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87

4-7. Distribution of Physicians Participating in Oregon’s Fee-for-Service

Medicaid Program, by Annual Medicaid Billings, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . 88

4-8. Proportion of Oregon Physicians Reporting an Unlimited Medicaid Practice

by County, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

4-9. Oregon Medicaid Reimbursement Methods for Selected Services in the

Fee-for-Service Delivery System, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

4-10. Current Status of Physician Care Organization Involvement in Providing

and Managing Services for Medicaid Clients, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

4-11. Current and Proposed Oregon Medicaid Delivery System by County . . . . . . . . . . . . 98

4-12. Distribution of Oregon Medicaid Enrollment by Eligibility Category and

Health Care Delivery System: 1993 Without Demonstration, 1993 Demonstration

Startup, and 1993 Demonstration Steady State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

4-13. Breakdown of Preliminary Cavitation Rates for Providers in the Oregon Medicaid

Demonstration in State Fiscal Year 1993: Rates for Clackamas, Multnomah,

and Washington Counties for All Demonstration Eligibles Under 100 Percent of

the Federal Poverty Level Except General Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . 100

4-14. Cavitation Rates for Prepaid Health Providers in Oregon:

Current and Proposed Benefit Packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

4-15. Coverage of Selected Optional Medicaid Services, Oregon vs. Other States,

October 1, 1989.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
Chapter 4

Implications for Health Care Providers

INTRODUCTION

Implementation of Oregon’s proposed Medicaid

demonstration would affect providers of health care

organizationally, financially, and clinically. Any

impact of the proposed demonstration on providers

of care is likely to have a resultant impact on

Medicaid beneficiaries’ access to care-either primary access or access to specific services. (Implications for beneficiary access to care are discussed

further in chapter 5.)

Of the many changes proposed under the demonstration, four are likely to have pronounced effects

on providers:

●

●

●

●

Not

Enrollment expansion,

Restructuring of the delivery system,

Changes in methods and rates of provider

reimbursement, and

Implementation of the prioritized list of health

services as the Medicaid benefit package.l

all of these changes would be fully in place at

program startup. Enrollment expansions are expected to occur over a period of approximately 3

years (see ch. 5). Delivery system and reimbursement reforms are expected to be completed within

the first 2 years. The prioritized list, however, would

be in place from the very beginning. The ultimate

impact of the demonstration on providers would

depend on the combined effect of all of these

changes and would probably vary greatly among

individual providers.

This chapter provides a framework for predicting

provider response to the demonstration by examining the possible effects of proposed changes for

different types of providers in the State. First, it

provides an overview of Oregon health care providers and the current Medicaid delivery system. Next,

it summarizes the proposed delivery system and

payment changes under the demonstration and

speculates about their possible implications for

different types of providers. Finally, the chapter

discusses provider issues related to the implementation of the prioritized list as a benefit package. It also

discusses the level of data collection efforts and

other administrative tasks that providers (and the

Office of Medical Assistance Programs (OMAP))2

would need to take on in order to enable an

evaluation of the demonstration.

It is important to note that, at the time this report

was written, many aspects of Oregon’s implementation process had yet to be developed. The goal of this

chapter is first to describe the proposed changes in

detail, and then to point out issues of potential

concern for providers based on the Office of

Technology Assessment’s (OTA) understanding of

the development of Oregon’s plan to date. Some of

these concerns appear to be relatively simple ones to

address, and some are already under consideration

by OMAP; others seem less tractable.

CURRENT STATUS OF

PROVIDERS IN OREGON

To understand how the proposed demonstration

might affect health care providers in Oregon, it is

helpful to examine their current involvement in

Medicaid as well as the broader climate in which

they function. This section describes the supply and

distribution of providers in Oregon and, where

possible, their financial characteristics and participation in Medicaid. It then describes how health care

is delivered and paid for under Oregon’s current

Medicaid program.

Provider Supply, Distribution, and

Financial Characteristics

Hospitals

There are 66 short-term general community hospitals in Oregon. 3 Of these, 30 are in Oregon’s 8

metropolitan counties. Of the 36 hospitals in nonmetropolitan areas of the State, 24 have fewer than

50 beds (155). Table 4-1 shows the distribution of

hospitals by county and size.

1 Another change that would affect providers is the State’s proposed waiver of liability for not providing to Medicaid patients those medically

necessary semices that fall below the cutoff point on the prioritized list. This provision is discussed in ch. 7.

2 OMAP is the agency within the Oregon State Department of Human Resources that is responsible for administering the Medicaid program.

3 Data presented in this section are for short-term general community hospitals only.

–81–
82 ● Evaluation of the Oregon Medicaid Proposal

Table 4-l-Number and Size of Oregon Short-Term General Hospitalsa by Geographic Area, Current (1991)

Medicaid Delivery System Status, and Anticipated Delivery System Status Under the Proposed Demonstration

1

0

Available data suggest that the viability of a

number of hospitals in the State is tenuous. For

example:

●

●

●

The average occupancy rate for community hospitals in Oregon is significantly lower than the U.S.

average (56.8 vs. 66.8 percent in 1990) (6).

One metropolitan county and 8 of the 25 nonmetropolitan counties had average hospital occupancy rates below 30 percent (162).

Although net operating margins4 of Oregon hospitals generally improved between 1987 and 1990,

certain classes of hospitals (e.g., hospitals of 6 to

24 beds, government hospitals) on average reported negative operating margins in 1990 (table

4-2). Operating margins of type A and type B rural

hospitals have improved over the last 4 years,

perhaps due to the implementation of Federal and

State policies that exempt them from prospective

payment for inpatient services and percent-of-cost

limits for outpatient services. Operating margins

●

of type C rural hospitals, which do not benefit

from reimbursement protections, have declined.

In 1990, 23 of the State’s hospitals reported

negative operating margins, with 9 hospitals

reporting margins worse than –10 percent (155).

All but 7 of these 23 hospitals were in nonmetropolitan counties.

Although all hospitals serve at least some Medicaid patients, certain hospitals serve more than others

and, hence, are more dependent on Medicaid revenues than their counterparts. For example, in 1990:

●

●

The total number of Medicaid inpatient discharges in Oregon was 38,513.6 Of these, 26,115

(67 percent) were from Oregon’s 10 Medicaid

disproportionate share hospitals (162).

Medicaid represented 11.6 percent of total inpatient discharges and 10.2 percent of total inpatient

days in Oregon hospitals. Types of hospitals with

a greater than average proportion of Medicaid

inpatient discharges and days were Medicaid

4 See glossary for definition of net operating margins.

s Ref~s to class~lcatio~ develop~ by the State of Oregon for Medicaid reimbursement exemptions and other resource allocation purpo$%. Typ3

A hospitals were exempt from prospective payment for inpatient services for all years represented in table 4-2. Type B hospitals were exempt from

prospective payment for inpatient services beginning in 1989. Both type A and type B rural hospitals are reimbursed at 100 percent of costs for inpatient

savices (based on individual hospitals’ Medicare cost reports). Type C rural hospitzds are not eligible for these reimbursement protections (161a).

b Discharges with Medicaid listed as primary source of pay. Excludes discharges from the two Kaiser Perman ente hospitals.
Chapter 4--Implications for Health Care Providers ● 83

●

Table 4-2—Net Operating Margins of Oregon Short-Term General Hospitals,a

1987 and 1990

Number of Net operating margin

Hospital category hospitals, 199@ 1987 1990

All hospitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Metropolitan ., . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonmetropolitan. . . . . . . . . . . . . . . . . . . . . . . . . .

Rural class Ac 

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonrural hospitals . . . . . . . . . . . . . . . . . . . . . . . .

Number of staffed beds

6 to 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25 to 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50 to 99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100 to 199.,.... . . . . . . . . . . . . . . . . . . . . . . . . .

200 to 299...,.. . . . . . . . . . . . . . . . . . . . . . . . . .

300 to 399...... . . . . . . . . . . . . . . . . . . . . . . . . .

400 to 499...... . . . . . . . . . . . . . . . . . . . . . . . . .

Ownership

Private, for profit. . . . . . . . . . . . . . . . . . . . . . . . . .

Nongovernment, not-for-profit . . . . . . . . . . . . . .

Government, State or local . . . . . . . . . . . . . . . . .

Medicaid disproportionate share (DSH) status

DSH . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .

All other hospitals. . . . . . . . . . . . . . . . . . . . . . . . .

66

28

38

9

19

13

25

8

24

10

15

1

4

4

(8)

(39)

(19)

(10)

(56)

2.56%

2.63

2.63

-1.68

-3.11

4.95

2.98

-16.87

0.42

5.80

2.92

3.49

-1.49

6.68

-0.43

5.20%

-11,10

NA

NA

2.58%.

2.41

3.04

1.25

-0.10

2.87

2.79

-13.20

2.10

4.94

3.51

1,69

-3.52

7.64

2.32

4.26

-6.60

-3.66

, 4.20

NOTE: NA= notavailable.

a Includes all short-term general hospitals in oregon except mititary and Veterans Administration hospitals.

b~ismlumn reflects the 1990 totals foreati grouping. Numbers forpnoryears were slightly different.

cseetefl(fwtnote 5)foradefinition of oregonrural hospital classifications.

SOURCE: PreparedbytheOregonAssociation ofHospitals, Salem,OR,usingdata fromthe 1990American Hospital

Association Annual Survey of Hospitals and 1990 audited finandal statements from Oregon hospitals.

disproportionate share hospitals (22.9 and 22.0

percent of discharges and days, respectively),

government hospitals (18.2 and 18.6 percent),

type C rural hospitals (16.7 and 11.5 percent), and

type B rural hospitals (13.6 and 12.0 percent)

(162).

Medicaid represented 11.9 percent of total inpatient charges for all hospitals. Types of hospitals

significantly exceeding this average included

hospitals of 200 to 400 beds (where Medicaid

represented about 15 percent of charges), State or

local government hospitals (16.2 percent), and

Medicaid disproportionate share hospitals (22.9

percent). Hospitals below the average included

rural hospitals (6.9 percent for class A), hospitals

that were not a part of a multihospital system (8. 1

percent), and hospitals that did not have Medicaid

disproportionate share status (7.0 percent) (162).

The distribution of outpatient visits by source of

pay appears to differ from that of inpatient visits.

Small rural hospitals and Medicaid disproportionate

share hospitals had a greater proportion of outpatient

visits than inpatient discharges attributed to Medicaid (10.9 vs. 6.9 percent for rural class A, 15.0 vs.

13.9 percent for disproportionate share), while the

reverse was true for all other hospitals (162). The

higher use of outpatient services by Medicaid

patients in rural hospitals could be due to the limited

availability of office-based health care services in

these areas, although no empirical data exist to

support this theory. The differences noted could also

be due in part to inconsistencies in how individual

hospitals report outpatient visits.

Primary Care Clinics

Primary care clinics in Oregon include federally

qualified health centers (FQHCS),7 federally certified rural health clinics (RHCs), county health

T FQHCS are clinics funded under sections 329, 330, and/or 340 of the Public Health Service Act, or other public clinics that serve similar clients,

as designated by the Secretary of the Department of Health and Human Services (Public Law 101-239, Public Law 101-508). They include community

health centers (section 330), migrant health centers (section 329), and health centers for the homeless (section 340).
Table 4-3-Location, 1990 Patient Population Characteristics, and Proposed Status Under the Demonstration

of Oregon’s Federally Qualified Health Centers (FQHCs)a

Percent of Percent of Percent of users

Total PHSa County/ users with users below who have PCO/FCHP statusd

unduplicated grant metro statusb/ no health Minority Age 100 percent Medicaid

Clinic name

Under

users, 1989 source No. of clinic sites insurance status distribution of FPLC

coverage Now demonstration

Clinica del Carino 2,182 329 Hood River Hispanic 70.0?/’ 0-19 44.0% PCOs by

and Nonmetro 71% Black 0.3% 20-64 54.0% 70% 14% None start of

330 1 Other nonwhite 0.8% 65+ 2.0% year 3

Clinica del Vane 3,794 329 Jackson Hispanic 70.0 0-19 41.5 PCO FCHPs

Metro 91 Black 0.5 20-64 57.0 70 NA optional mandatory

1 Other nonwhite 0.5 65+ 1.5 by startup

Hermiston 3,312 329 Umatilla Hispanic 38.0 0-19 51.0 PCOs by

Community Clinic Nonmetro 60 Black 0.5 20-64 46.0 60 16 None start of

1 Other nonwhite NA 65+ 3.0 year 3

Milton-Freewater (New clinic 329 Umatilla Hispanic NA 0-19 NA PCOs by

Clinic in 1990) Nonmetro 30 Black NA 20-64 NA NA 15 None start of

1 Other nonwhite NA 65+ NA year 3

Multnomah Co. 38,332 330 Multnomah

.

Hispanic 3.8 0-19 57.0 21 in PCOs FCHPs

Health Department and Metro 82 Black 16.3 20%1 41.0 79 a PCO,

340 14a Other nonwhite 12.6

mandatory mandatory

65+ 2.0 1.8 not by startup

Salud Medical 8,075 329 Marion Hispanic 60.3 0-19 48.0 PCOs FCHPs

Clinic and Metro 71 Black NA 2044 51.0 74 11

330 1 Other nonwhite 1.0

mandatory mandatory

65+ 1.0 by startup

SORHN 2,827 330 Klamath Hispanic 1.0 0-19 40.0 PCOs

Nonmetro 39 Black 1.0 20-64 47.0 77 29 None by

2 Other nonwhite 24.0 65+ 13.0 startup

Valley Family NA 329 Malheur Hispanic NA 0-19 NA PCOs by

Health Care Inc./ Nonmetro Black NA 20-64 NA NA NA None start of

Nyssa 2 Other nonwhite NA 65+ NA year 3

Virginia Garcia 8,494 329 Washington Hispanic 88.5 0-19 46.0 PCOs FCHPs

Clinic Metro 87 Black 0.1 20-64 53.0 92 8 mandatory mandatory

1 Other nonwhite 0.2 65+ 1.0 by startup

West Salem Clinic 6,891 330 Marion Hispanic 15.0 0-19 23.0 PCOs FCHPs

and Metro 26 Black 2.0 20-64 53.0 68 35

340 1 Other nonwhite 3.0

mandatory mandatory

65+ 24.0 by startup

Clackamas Co. (New clinic “Look- Clackamas

.

Hispanic 10.0 0-19 59.0 PCOs FCHPs

Health Department in 1991) alike” Metro 74 Black 0.8 20-64 41.0 63 22

2 Other nonwhite 1.1

mandatory mandatory

65+ 0.0 by startup

NOTE: NA - not available.

a FQHC~ are Clini= fu~~ u~er s=tions 3X (migrant health ~nters), 330 (community h~lth centers), and/or 340 (health care for the homeless) of the Public Health Service Act (see

text). Other public clinics can also qualify under a “look-alike” provision if they provide similar services.

b Refers t. metrowlitan or nonmetmpolitan status (Bureau of Census definition) of county in which clinic is located.

c FpL - F~ral pOverfy level.
d @not= ~m~~ ~e~ ~livey “~ in that ~un~ “~r the &monstmt”mn- PCO. @ysidan ~re organization (a partial~ ~pitat~ plan); FCHP - fully cavitated health plan. Currentfy,

prepaid plan enrollment is mandatory for Aid to Families with Dependent Children (AFDC) eligibles in a 9-unty area and is optional in a tenth county. As of March 1991, four FQHCS

(Multnomah County Health Department, Clackamas County Health Department, Virginia Garcia Clinic, and Clinicadel Vane) were partiapating as PCOS and an additional two (Salud and

West Salem clinics) were participating as subcontractors to a PCO. Under the demonstration, enrollment in prepaid delive~ systems would apply to all eligibility groups (see text). FCHPS

would be the required mode of service delivery in nine (urban or urban-adjacent) caunties. Other counties are targeted for PCO contract negotiations, although Oregon has not stated in

which counties PCOS will be mandatory. The dates in the far right-hand column reflect the time at which OMAP had anticipated PCO and FCHP contracts to be finalized in that county. The

original anticipated date forprcqram startup was July 1,1992. Contract negotiations have since been delayed on a month-to-month basis pending approval of the waiver by the U.S. Health

Care Finanang Administration (see text).

e The Multnomah ~Unty Health Department is composed of seven COmmUnity clinic SiteS and SWWl School-bed sit-.

f Cla&m= County Health Department was designated as an FQHC in octo~r 1991.

SOURCES: Oregon Primary Care Association, unpubiisheddata derived from Bureau of Common Reporting Requirements reports filed by federaltyfunded clinics and reports from individual

clinics, prepared for the Office of Technology Assessment August 1991; Oregon Department of Human Resources, Office of Medical Assistance Programs, Salem, OR, The

Oregon Md@”dDwonstratbn WahmrApp/ication, subrnittedto the Health Care Financing Administration Aug. 16,1991 ;T. Troxel, Director, Public Health Division, Clackamas

County Department of Human Services, Portland, OR, personal communication, Mar. 16, 1992.

Table 4-4-insurance Coverage and Income Characteristics of Patients in Oregon Primary Care Clinics, 1990a

Number and percent of clinics who reportedb that the percentage of their patients having the characteristics listed below was: Total number

o-lo% 11-2070 21-30% 31-40% 41-50% 51-60% 61-7070 71-80%

of clinics

81-90% 91-100%

No. % No. % No. % No. % No. % No. %

with valid

No. % No. % No. % No. % responses

Insurance coverage:

Medicaid coverage . . . . 17 30.3 16 28.6 14 25.0 3 5.4 3 5.4 0 0.0 1 1.7 2 3.6 0 0.0 0 0.0 56

Medicare coverage. . . . 13 43.3 5 16.7 5 16.7 1 3.3 3 10.0 2 6.7 0 0.0 0 0.0 0 0.0 1 3.3 30

Private insurance . . . . . 20 51.3 3 7.7 6 15.4 4 10.3 4 10.3 2 5.0 0 0.0 0 0.0 0 0.0 0 0.0 39

No health insurance . . . 4 8.1 3 6.1 10 20.4 4 8.1 2 4.1 2 4.1 8 16.3 3 6.1 4 8.2 9 18.5 49

Income characteristic:

Have incomes below 100

percent FPLC. . . . . . . 3 6.5 2 4.4 2 4.4 3 6.5 10 21.7 6 13.0 7 15.2 5 10.9 4 8.7 4 8.7 46

Pay nothing for

clinic services . . . . . 10 25.5 2 5.1 7 18.0 0 0.0 7 18.0 2 5.1 1 2.6 2 5.1 1 2.6 7 18.0 39

a Bas~ on a lggo sumeyto~~h 97clini= (all nonprofit) respond~. These dini~ induded@coUnty C(inia, 10 dool-b~dclinb, 11 federally qualified health centers (FQHCS), 2 Indian

Health Servics clinics, and 25 other twes of clinics. Only 43 of the total 97 clinics reported paymentinsurance coverage data.

b C[inb were ~k~ t. rewflfiat per~ntage of all their patients in 1990 fit the cat~ories list~ on the left-hand side of this ta~e. percentag~ of patients do not add to 100 due to overtap

between categories of insurance coverage and income characteristics.

c FPL - Federal poverty level.

SOURCE: Oregon Department of Human Resources, Office of Health Policy, Salem, OR, unpublished data from the June 1991 Primary Care Clinics Survey.
86 ● Evaluation of the Oregon Medicaid Proposal

departments (CHDs), and other public and private

clinics. These clinics have traditionally played a key

role in providing basic primary care services to the

Medicaid population.

There are 11 FQHCs in Oregon, located in both

urban and rural areas (table 4-3), and 17 RHCS.

8 The

11 FQHCs include clinics with community health

center, migrant health center, and health care for the

homeless funding, as well as one county health

department designated under the so-called “look

alike” provision (table 4-3).9 All FQHCs use an

income-based sliding-fee scale for their uninsured

patients—some patients may pay the full charge,

while others pay nothing. To subsidize uncompensated care, these clinics rely on Federal grant dollars

and cross-subsidies from patients who do have

health insurance, including those with Medicaid

coverage.

Data derived from quarterly utilization reports for

1989 and 199010 show that, in the 11 FQHCs,

anywhere from 26 to 91 percent of patients seen in

a given clinic had no health insurance, and from 8 to

35 percent had Medicaid coverage (table 4-3). The

proportion of patients below the Federal poverty

level (FPL) ranged from 60 to 79 percent (table 4-3).

OTA was unable to obtain service capacity, financial, or patient demographic data for RHCs.

Other primary care clinics include Indian Health

Service clinics and 35 CHDs. Data for these

facilities are scarce. In a 1990 survey of all nonprofit

primary care clinics conducted by the Oregon

Primary Care Association, a few such clinics reported patient financial and insurance information

(table 4-4). Most clinics reporting data claimed that

somewhere between 11 and 30 percent of their

patients had Medicaid coverage. The majority also

reported that the proportion of their patients with

incomes below the FPL ranged from 40 to 100

percent (table 4-4). A CHD in Clackamas County

reported that one-third of its operating budget came

from Medicaid (261).

Table 4-5-Number of Physiciansa per 100,000

Population: United States and Oregon,

Selected Years, 1980-90

Number of physicians

per 100,000 residents Percent

Year United States Oregon difference

1980 . . . . . . . . . . . . . . 202 182 –10.0%

1986 . . . . . . . . . . . . . . 227 209 -8.0

1988 . . . . . . . . . . . . . . 231 219 -5.0

1990 . . . . . . . . . . . . . . 240 220 -9.0

a [ndudes both allopathic (MD) and osteopathic (~) @YsiUans.

SOURCE: Oregon Health Sciences University, Office of Rural Health,

Physician Resources /n ~egon: A Summary Report (Portland,

OR: Oregon Health Sciences University, September 1991),

table 1-1.

Professional Providers

Physicians—As of December 31, 1990, there

were an estimated 6,241 practicing physicians11 in

Oregon (188). Of these physicians, 84 percent

practiced in the 10 Medicaid “managed care”

counties (counties where Oregon currently requires

most Medicaid beneficiaries to enroll in prepaid

health plans—see “Current Medicaid Program,”

below); the remainder practiced in other areas of the

State (189).

Oregon has historically lagged behind the United

States in supply of physicians relative to the

population. Although the gap lessened somewhat

during the 1980s, 1990 data indicate that it may be

growing again (table 4-5). In 1990, 117 (47.7

percent) of Oregon’s 241 cities and towns had no

physician (188). All of these were places of fewer

than 5,000 residents (188). Three counties (Gilliam,

Wheeler, and Sherman) had no physicians in either

1980 or 1990 (188).

A larger proportion of Oregon physicians are in

primary care specialties than in the United States as

a whole. For example, Oregon has 40 general or

family practitioners per 100,000 residents, compared with 28 per 100,000 for the United States

(table 4-6) (188). In Oregon’s metropolitan counties

(where prepaid plan enrollment is mandatory for all

AFDC eligibles under the current Medicaid pro8 RHC certification for purposes of Medicare and Medicaid reimbursement was authorized by the Rural Health Clinics Act of 1972 (Public Law

95-210). These clinics are entitled to reimbursement at 100 percent of reasonable cost for their savices from both Medicaid and Medkare if they meet

certain requirements (e.g., they must use midlevel practitioners at least 50 pereent of the time).

9 Two of tie CWCS titi community he~~ ~ntm (section 330) funding also receive grants under section 340 of the Public Health fkrviee Ad

(“health care for the homeless’ ‘).

10 ~ese rep~ me r~fi~ x a con~tion of ob- Federal grant dollars. They are collected by regional offices of the Department of Health ~

Human Services.

I I hclud~ both ~opa~c (MD) physicians and osteopathic W) physicti.
Chapter 4--Implications for Health Care Providers . 87

Table 4-6-Number of Primary Care Physiciansa per 100,000 Population, by Specialty:

United States and Oregon, 1990

United States Oregon

Number of Number per Number of Number per

Specialty physicians 100,000 residents physicians 100,000 residents

General/family practice . . . . . . . . . . . . . . . . . . . 69,339 28.0 1,119 40.1

Obstetrics/gynecology . . . . . . . . . . . . . . . . . . . . 32,278 13.0 346 12.4

Pediatrics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,231 15.4 315 11.3

Internal medicine . . . . . . . . . . . . . . . . . . . . . . . . 94,674 38.3 918 32.9

a ln~~es both allopathic (MD) and osteopathic (DO) ~Ysi~ans.

SOURCE: Oregon Health Selenees University, Office of Rural Health, Physic/an Reswrces in Oregon: A Summary F?eport(Portland, OR: Oregon Health

seienees University, September 1991).

gram), 41 percent of physicians are in a primary care

specialty.

12 In Oregon's nonmetropolitan counties

(only two of which are currently under the Medicaid

prepaid managed care system), 51 percent were in

primary care (189).

Despite the relatively high prevalence of primary

care physicians, a recent study by the Oregon Office

of Rural Health cited a ‘‘conspicuous [geographic]

maldistribution” of physicians in the State (188). A

State tax credit of $5,000 offered to physicians who

practice in rural shortage areas has reportedly

enhanced rural physician retention in recent years

(187). Nonetheless, the study notes a declining

supply of primary care physicians statewide, and a

declining supply of physicians overall in rural areas

between 1986 and 1990 (188).

Medicaid Participation-In a recent national

study of Medicaid physician participation conducted

by the Physician Payment Review Commission,

Medicaid officials in Oregon reported problems with

physician participation in rural areas and among

providers of obstetric services (203). When asked

what factors inhibited participation, Medicaid directors from the 51 programs surveyed most frequently

cited low fees, malpractice insurance premiums, and

complex billing procedures (203).

Empirical data on Medicaid participation are

scarce for Oregon physicians as well as for physicians nationally. Medicaid physician participation

data typically derive from one of two sources:

Medicaid claims databases, or physician surveys.

Data based on Medicaid claims may overstate

participation because they count physicians who

submit only a single claim (203). Physician survey

data are problematic because physicians themselves

tend to overstate their level of participation (1 17).

OTA was able to obtain data from each of these

sources for Oregon physicians, as described below:

●

●

Data from OMAP’s claims database and State

medical licensing board counts of practicing

physicians in Oregon indicate that 76.2 percent of

all practicing physicians in the State were paid

directly by Medicaid for at least one service in

1990.13 The degree of participation among these

physicians can be illustrated further by examining

their distribution by annual Medicaid billings

(table 4-7). Approximately 40 percent of all

participating physicians billed Medicaid for $5,000

or less.

In a 1988 survey of all physician members of the

Oregon Medical Association (OMA) (195),14 59.5

percent of responding physicians reported that

they accepted all Medicaid patients; 33 percent

said they restricted their Medicaid practices; and

the remaining 7.5 percent said they did not accept

any Medicaid patients (195). The percentage of

respondents reporting unlimited Medicaid practice is shown by county in table 4-8. Physicians in

rural areas tended to have a higher rate of

unrestricted Medicaid practice than their urban

counterparts (195). Implementation of prepaid

plans for Medicaid enrollees in urban areas

probably accounts for much of this difference.

Uncompensated Care—Information on physicians’ uncompensated care costs are similarly scarce

and problematic. In the same 1988 OMA survey

12 -W~me SPC1~tieS me defined here as family practice, general practice, general pediatrics, general inteti medic~e, ~d obste~cs and

gynecology.

13 1t ~m not pOSS1ble t. ~~m~te Sepaate ~ate~ by s~ial~ due to duplication problems, Appm&ately ZO pereent of M physicians on file at OMAP

listed more than one specialty on their record (252).

1A ne reswnse rate was 28.9 pereent (1,249 responses).
Table 4-7—Distribution of Physicians Participating” in Oregon’s Fee-for-Service Medicaid Program, by Annual Medicaid Billings

(Fee-for-Service System Only), 1990b

Annual billed charges to Medicaid for services performed and paid

$1 to $1,001 to $5,001 to $10,001 to $25,001 to $50,001 to Over

$1,000 $5,000 $10,000 $25,000 $50,000 $75,000 $75,000 Total

-------------------------------------------Percent of participating physicians–---—-—-— ———--—-—.---—-——

All physicians (MD and DO) . . . . . . . 17.4 20.3 13.7 24.7 15.3 4.6 3.9 100.0

Primary care physicians . . . . . . . 18.1 23.4 13.9 22.5 12.5 4.7 5.0 100.0

General/family practice . . . . . . 19.8 22.1 12.9 23.3 13.7 5.5 2.7 100.0

Internal medicine . . . . . . . . . 21.0 26.7 15.5 25.6 8.9 1.9 0.4 100.0

Pediatrics . . . . . . . . . . . . . . . 14.9 23.9 11.8 17.4 16.3 6.5 9.3 100.0

Obstetrics/gynecology d . . . . 9.6 17.0 14.4 17.5 13.6 7.6 20.3 100.0

All other physicians . . . . . . . . . . . 16.4 17.4 13.7 27.4 18.0 4.4 2.7 100.0

NOTE: Percentages may not add to exactly 100 due to rounding.

a “part~ipating ~ysi~anm is ~fin~ here as a ~ys~ian who performed at least one pad Medicaid service in 1990. Includes physician providers in Washington, id+o, Nevada ad

California who provided services to Oregon Medicaid patients.

b fidu~s se~=s n~ ~llow~ by ~Ap. lnd~es all Med&jd ~nroll~s seen in the fee-for-ser~a system, r~ardless of voluntary or mandatory enrollment in a prepaid plan. Average

number of undu~i~t~ enrollees seen is exp~ted to be less in counties where enrollment in a prepaid plan is mandatory for AFDC enrollees, because physicians in prepaid plans

do not bill OMAP directly for most services.

C Pnmary=re indu~s M~and Dos who listed one of th&rsp~alties as general pra~ti~, family pr~ti~, internal med~ine, p~iatri~, o&tetri~, gyn~logy, Obstetrics/gyn&ZOlOgy,

or did not list a specialty.

d lnclu~s ~ys~iam who list~ ~ one of their specialties gynecology, obstetrics, or obstet~gyn~l~y.

e lnclu~s all Mm ad ~ MO l~t~ a s@alty other than, or in addition to, one of the primary ~re sp~ialties de~ribed in footnote C. mere is du~iation between prif?lal’y and

nonprimary care physicians because approximately 20 percent of physicians on file with OMAP list more than one specialty.

SOURCE: Oregon Department of Human Resour@s, offi~ of Medi~l &istan~ Pmgra~, Salem, C)R, data on 1990 physiaan participation in Medicaid, provided to the Office of

Technology Assessment Nov. 14, 1991.
Chapter 4----Implications for Health Care Providers ● 89

Table 4-8-Proportion of Oregon Physicians Reporting an Unlimited Medicaid Practice by County, 1988a

Percentage of physicians

Proposed delivery in area who do Average percentage

system status under not limit their of practice devoted Number of Percent

demonstrationb/county Medicaid practicec

to Medicaid surveys sent responding

Fully capita ted health plans b

Benton . . . . . . . . . . . . . . . . . . . . . . . . 63.5% 8.9% 121 28.994.

Clackamas . . . . . . . . . . . . . . . . . . . . . 55.0 10.0 203 29.6

Lane . . . . . . . . . . . . . . . . . . . . . . . . . 55.8 11.5 395 30.4

Linn . . . . . . . . . . . . . . . . . . . . . . . . . . . 58.6 15.1 85 34.1

Marion. . . . . . . . . . . . . . . . . . . . . , . . . 52.9 10.8 310 33.5

Multnomah . . . . . . . . . . . . . . . . . . . . . 48.5 10.2 1,835 22,9

Polk . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.9 15.0 22 31.8

Washington . . . . . . . . . . . . . . . . . . . . 46.7 5.3 251 28.7

Yamhill . . . . . . . . . . . . . . . . . . . . . . . . 76.0 12.7 74 33.8

Physician care organizations (PCOs—partially capitated) b

Baker . . . . . . . . . . . . . . . . . . . . . . . . . 33.3

Clatsop . . . . . . . . . . . . . . . . . . . . . . . . 66.7

Columbia . . . . . . . . . . . . . . . . . . . . . . 80.0

coos . . . . . . . . . . . . . . . . . . . . . . . . . 53.6

Crook . . . . . . . . . . . . . . . . . . . . . . . . . 100.0

Deschutes . . . . . . . . . . . . . . . . . . . . . 67.4

Douglas . . . . . . . . . . . . . . . . . . . . . . . 68.9

Haney . . . . . . . . . . . . . . . . . . . . . . . . NA

Hood River . . . . . . . . . . . . . . . . . . . . 62.5

Jackson . . . . . . . . . . . . . . . . . . . . . . . 62.5

Jefferson . . . . . . . . . . . . . . . . . . . . . . 100.0

Josephine . . . . . . . . . . . . . . . . . . . . . 48.1

Klamath . . . . . . . . . . . . . . . . . . . . . . . 59.1

Lincoln . . . . . . . . . . . . . . . . . . . . . . . . 58.8

Malheur . . . . . . . . . . . . . . . . . . . . . . . 54.4

Sherman . . . . . . . . . . . . . . . . . . . . . . . NA

Tillamook ...,... . . . . . . . . . . . . . . . 57.1

Umatilla . . . . . . . . . . . . . . . . . . . . . . . 60.0

Union . . . . . . . . . . . . . . . . . . . . . . . . . 76.5

Wasco . . . . . . . . . . . . . . . . . . . . . . . . . 62.5

5.0

18.3

22.3

13.3

17.5

10.7

11.7

NA

12.0

10.8

21.7

16.1

12.9

26.0

12.5

NA

12.5

15.0

12.0

16.1

12

29

14

81

8

133

125

5

19

219

5

65

65

35

35

NA

14

63

39

41

50.0

29.6

35.7

34.6

50.0

32.3

36.0

0.0

52.6

29.2

60.0

41.5

33.8

48.5

31.4

NA

50.0

47.6

43.6

39.0

Case-managed fee-for-service b

Curry . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 25.0 10 10.0

Grant . . . . . . . . . . . . . . . . . . . . . . . . . . 66.7 NA 3 100.0

Lake . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 40.0 5 20.0

Morrow . . . . . . . . . . . . . . . . . . . . . . . NA NA NA NA

Wallow . . . . . . . . . . . . . . . . . . . . . . . 66.7 7,5 5 60.0

NOTE: NA-notavailable.

a~~onamafl su~eyof afl physician members ofthe Oregon Medical Association. Response rate was 28.9 percent (l,249 total responses).

blndi@tes ant~ipat~ m~eofM~i~M health servi~s delivery bythee~ofthe s~ndyear of the &monstration (according totimehne inWdVer

application). AlthoughtheState exp=ts~se-managdfe*for-setimtobetheprima~mdeofsewkedeHve~underthedemontration inthefivecounties

irtdicated, itwouidexecwte prepa.ticontracfs inthose areaswith anywilling andqualified providers(175). Lfnderthecwrent Medicaid prograrn,Aidto Families

With Dependent Children (AFDC) Medicaid reapients in Clackamas, Benton, Lane, Linn, Marion, Multnomah, Polk, Washington, and Yamhill counties are

required to enroll in a prepaid health plan. Prepaid plan enrollment is optional for AFDC recipients in Jackson County. In all other counties, Medieaid pays

for services on a fee-for-service basis.

c per~ntage of physidans who reported they accepted any Medieaid patient who came to their office.

d Of all physicians rew~ing unlimit~ M~i~id Practim, the average percentage of their practi~ they reported was made Up of Medicaid patients.

SOURCE: Oregon Medical Association, Portland, OR, “Bridging The Gap: The Role of Oregon Physicians in Uncompensated Care,” 1989.

cited above, 83 percent of responding physicians survey, OMA estimated total uncollected practice

reported that they sometimes offered care at reduced revenues due to free care or reduced fees of

fees,15 and 68 percent reported that they waived fees physicians in Oregon to be appro ximately $239

for some patients.16 Primary care physicians were million (195). Because physicians did not indicate

more likely than specialty physicians to report the insurance status of patients for whom they

reduced or waived fees. Based on the results of this reduced or waived fees, however, this estimate

15 4‘R~uA fm’ relative to the kdivid~ physician’s typical charge fOr a given SWiU.

lb For w physic~ repofig waived fees, the average number of patients per year for whom they Wtived fefi wm 47 (195).
90 ● Evaluation of the Oregon Medicaid Proposal

probably greatly overestimates the amount of uncompensated care costs that would be offset by

expanded coverage under the proposed demonstration.

Other Professional Providers--Other providers

eligible for direct fee-for-service (FFS) reimbursement under Oregon Medicaid include nurse practitioners, optometrists, chiropractors, naturopaths,

physical therapists, occupational therapists, and

speech-language pathologists. 17 Data on the supply

of selected providers in Oregon follow:

●

●

●

●

In 1990, there were an estimated 792 nurse

practitioners (including nurse midwives) licensed in Oregon (163). Of these, 100 (12.6

percent) resided out-of-State; 601 (75 percent)

resided in the 10 ‘managed care’ counties (see

below); and the remaining 91 (11.4 percent)

resided in other Oregon counties (163).18 Approximately 80 percent of NPs in Oregon have

the authority to prescribe at least some medications (198).

In 1990, there were 457 optometrists, 358 (73

percent) of whom are in the 10 managed care

counties, with the remaining 27 percent in other

areas of the State (196).

As of 1988, there were 1,827 professionally

active dentists19 in the State, 1,466 (80 percent)

of whom practiced in the 10 managed care

counties (5).

As of July 1991, there were approximately 850

chiropractors in the State (158). Their rural/

urban distribution was not available, but 382

(44 percent) had addresses in either Portland,

Salem, or Eugene (158).

Current Medicaid Program

The Oregon Medicaid program currently operates

through three delivery systems. The first is the

traditional FFS system. The other two are variations

within Oregon Medicaid’s ongoing prepaid health

plan (PHP) system: one, a fully capitated20 plan (the

Kaiser Permanente-Northwest Region health maintenance organization (HMO)); the other, a system of

partially capitated plans.

Fee-for-Service Health Care

The FFS system serves individuals in all Medicaid eligibility categories in 26 of Oregon’s 36

counties as well as non-AFDC21 (and 15 to 20

percent of AFDC) enrollees in the 10 counties where

prepaid plans have been implemented for AFDC

eligibles (see below). AFDC eligibles enrolled in

partially capitated prepaid plans in these 10 counties

also receive many services through the FFS system.

In the FFS system, OMAP controls utilization

through prior authorization for selected services

(e.g., physical, occupational, and speech-language

therapy services; home health services; selected

diagnostic and treatment codes) and through other

limits (e.g., an 18-day annual limit on inpatient

hospitalization for adults). Case management is

covered for prenatal and maternity care services.

All services are paid according to OMAP’s

established methods of payment, which are summarized for some key facilities in table 4-9. FFS

physicians are paid according to a fee schedule. A

recent comparative analysis of State Medicaid

physician payment rates showed that, for a bundle of

18 services,22 Oregon’s payment was equal to the

average for all States in 1989 and represented 75

percent of the Medicare allowed charge for the same

services in the previous year (203).

FQHCs are exempt from fee schedule reimbursement for primary care services rendered to Medicaid

patients. Instead, they receive facility-specific costbased reimbursement on a per-encounter basis in

accordance with provisions of the Omnibus Budget

17 ~ySic~ ~sismts ~re~m~ under the supemising physician’s provider n*r.

18 Da@ on dis~bution of NPs by practice location or Setting were not available.

19 ~Clu&both fill-tie and part-time dentists.

m ~icaplht~ p~n” refers t. a provider that rmeives periodic (in this case mOnthly) payment in advance to cover M or W* ~s ‘f ‘d* ‘e

services it provides to an individual patient (i.e., per capita payment). The provider assumes fwncial risk for patients whose actual costs exceed the

payment amount.

21 Ad t. Families with Dependent ~dren.

22 F- for 18 semlce~ were grouped into 9 s-ice types: office visits, hospi~ visits, emergency room VkitS, COtiSldUitiOIIS, X-liiy SelViWS,

ekctmcardiograms, psychiatric services, obstetrical services, and surgical and other procedures. Fees for total obstetrical care (vaginal and caesarean

section deliveries) were excluded from this analysis because many States could not report fees for these services. Fees for each service type were

combined in proportion to their Medicaid utilization to create a “typical” Medicaid fee for each State (203).
Chapter 4--Implications for Health Care Providers . 91

Table 4-9-Oregon Medicaid Reimbursement Methods for Selected Services

in the Fee-for-Service Delivery System, 1991

Type of service Reimbursement method

Physician services. . . . . . . . . . . . . . . . . . Fee schedule (fees frozen for 1991-93 biennium)

Hospital inpatient. . . . . . . . . . . . . . . . . . . Prospective, DRG-based rate for most hospitals; certain rural hospitals exempt from

prospective payment and reimbursed at 100 percent of costsa b;; certain specialty hospitals

also exempt from prospective payment and reimbursed according to special contracts with

OMAP; Medicaid disproportionate share hospitals receive 5 to 25 percent DRG rate

increases depending on their Medicaid caseload

Hospital outpatient. . . . . . ., . . . . . . . . . Percent of costa (59 percent for the 1991-93 biennium); certain rural hospitals exempt from

percent of cost limits and reimbursed at 100 percent of Costa b

Rural health clinic servicesc. . . . . . . . . . Per visit, 100 percent of costsb

Federally qualified health centersd. . . . . Per visit, 100 percent of costsa

Durable medical equipment . . . . . . . . . . Fee schedule

Home health services. . . . . . . . . . . . . . . Per-visit fee schedule

Physical, occupational, and

speech therapy . . . . . . . . . . . . . . . . . . Fee schedule

ABBREVIATIONS: DRG - diagnosis-related group; OMAP. Office of Medical Assistance Programs.

a CO.StS deternlin~ from Medicare cost reports.

b Type A ~ral ~spital~ reim~r~~ at 100 Permnt of costs for inpatient and outpatient services (excluding lab and x-ray); type B rurai hospitals reimbursed

at 100 pereent of cost for inpatient services onty (excluding lab and x-ray).

c Rural h=lth ~[in~ as f~erally ~flifi~ for purposes of Medicare and Medieaid reimbursement (42 CFR 440.20(b)).

d F~rally ~ualifi~ h~lth c~ter~ include federally ~n~ ~mmunity health centers, migrant h~lth @nters, health centers for the homeless, and

“took-alike’ ’dinies (see table 4-3). Public Law 101-239 and Public Law 101-508 mandate 100 percent facility-specific cost-based reimbursement for services

provided in these clinics (see text).

SOURCE: Oregon Department of Human Resources, Office of Medical Assistance Programs, Salem, OR, provider services reimbursement guides and

updates, provided to the Office of Technology Assessment in 1991.

Reconciliation Act of 1989 (OBRA-89).23 OMAP

has implemented these reimbursement provisions

for FQHCs in the FFS system. For the two FQHCs

that serve as subcontractors in the prepaid system,

OMAP intends to reconcile any differences between

actual reimbursement from the prepaid provider and

reimbursement allowable under OBRA-89 at the

close of the State fiscal year (213,259,306).24

currently, the vast majority of Oregon’s 66

short-term general acute-care hospitals are reimbursed directly by OMAP for all covered services

rendered to Medicaid patients. Exceptions are the

two hospitals owned by Kaiser Foundation Hospitals, which are paid by the Kaiser Permanente HMO

for services rendered to Medicaid eligibles enrolled

in that HMO; and several other hospitals that are

paid negotiated rates by physician care organizations (PCOs) for certain outpatient services rendered

to PCO enrollees. Of the hospitals reimbursed

directly by OMAP, 3225 are reimbursed on a

prospective, diagnosis-related-group (DRG)-based

system for inpatient services and on a percent-ofcost26 basis for outpatient services (2 13). Institutions

exempt from prospective reimbursement for hospital

inpatient and percent-of-cost limits for hospital

outpatient services include:

●

●

Specialty hospitals, which are reimbursed according to the terms of unique contracts with

OMAP; and

Rural hospitals (defined essentially as hospitals

of fewer than 50 beds that are located more than

10 miles from a town of more than 10,000

residents), which are reimbursed as follows:

Type A rural hospitals—100 percent of cost

for all inpatient and outpatient services27 and

23 oB~-89 @bfiC ~w 101.239) ~u~es s~te Me&~(f prog~ to pay 100 prcent of r~omble cost for services provided by FQHCS ~d

RHCs-aprovision meant to protect the fucial viability of these ‘‘safety net’ primary care providers. Facility-specflc per-encounter reimbursement

rates are based on average costs for all patients seen at each facility in a given year.

M me ~. c~cs ~ve ~e~y rWeiv~ ~te~ ~oncd~tion from OMAP; finaI reconctiation for the fiit YW in which KIHC reimb~ent

protections were in effect in Oregon (State fiscal year 1991) had not yet occurred at the time this report was written.

25 ficludc~ tie ~. ho~i~ ow~ by -r Fo~dation Hospi~s. ~e~ hospi@s r~ive ~~~~ment direcdy fiOm OMAP (at regtlh FFS

rates) for services rendered to patients not enrolled in the Kaiser Permanence HMO.

26 Cost w on hospitis’ Medicare cost reports.

~ ficludes ~borato~ and x-ray services, which are reimbursed according tO a fee sch~~e.
92 ● Evaluation of the Oregon Medicaid Proposal

Table 4-10-Current Status of Physician Care Organization (PCO) Involvement in Providing and Managing

Services for Medicaid Clients, 1990

Number of PCOs that are PCOs required to case manage OMAP or OMPROa prior

Service capitated for service fee-for-service delivery approval required

Physician . . . . . . . . . . . . . . . . . . . . . . . . . . . All

Laboratory . . . . . . . . . . . . . . . . . . . . . . . . . . . All

Radiology . . . . . . . . . . . . . . . . . . . . . . . . . . . . All

Hospital outpatient. . . . . . . . . . . . . . . . . . . . None

Hospital inpatient . . . . . . . . . . . . . . . . . . . . . None

Prescription drugs . . . . . . . . . . . . . . . . . . . . . 1

Dentalc

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Chiropractor. . . . . . . . . . . . . . . . . . . . . . . . . . 4

Podiatrist . . . . . . . . . . . . . . . . . . . . . . . . . . . All

Nurse practitioner/nurse-midwife........ All

physical therapy . . . . . . . . . . . . . . . . . . . . . . 1

Speech, language, and occupational

therapy. . . . . . . . . . . . . . . . . . . . . . . . . . . . None

Optometrist . . . . . . . . . . . . . . . . . . . . . . . . . . None

Home health . . . . . . . . . . . . . . . . . . . . . . . . . None

Durable medical equipment/oxygen . . . . . . None

—

Yes

Yes

Yesb

No

Yes

—

—

No

No

No

No

No

—

—

—

—

—

—

—

—

.

—

—

Yes —

Yes

Yes

a OMAp. offi~ of Mdi~I Assistance programs; OMPRO - Oregon Medical Peer Review Organization.

b The Primay=re physician must~teorauthorizeall prescriptions. There isabuilt+nfinanaai incentive toccmtroi Utili=tion of prescription drugs. EXCeSSive

utilization of prescription drugs causes a decrease in the pool of money available for an individual plan’s savings incentive payment (see text).

c Four pcos are ~~tat~ for dental se~~s. In addition, rough~ 10,000 to 15,000 Medicaid beneficiaries are enrobd in “dental care Or9ankatiOnS.” The

Kaiser Permanente-Northwest Region HMO is not capitated for dental services.

SOURCE: L. Read, Director, Prioritized Health Care Systems, Offieeof Medieal Assistance Programs, Oregon Departmentof Human Resources, Salem, OR,

personal communication, July 10, 1991.

Type B rural hospitals—100 percent of cost

for all inpatient services and most outpatient

services.28

For hospitals qualifying for Medicaid disproportionate share (DSH) payments by virtue of Medicaid

utilization criteria, DRG rates are increased depending on the hospital’s share of Medicaid patients

relative to the State average for all hospitals (144).29

There were 10 such qualifying hospitals in Oregon

in 1990 (see table 4-2) (155).30 Total Medicaid DSH

payments to hospitals in Oregon (State share only)

increased by 67 percent between fiscal years (FY)

1989 and 1990 and by an additional 131 percent

between FY 1990 and FY 1991 (144).31

American Hospital Association data show that the

1989 Medicaid hospital payment-to-cost ratio32 was

lower in Oregon than in any other State except

Illinois (59 percent in Oregon compared with a

national average ratio of 78 percent) (207). Medicaid

outpatient hospital services reimbursement rates

have decreased significantly in recent years-horn

75 percent of costs in the 1987-89 biennium to 65

percent in 1989-91, and finally to 59 percent in the

current biennium (223). In a recent out-of-court

settlement of a Boren Amendment lawsuit brought

against the State by the Oregon Association of

Hospitals, OMAP agreed to pay $64 million over the

1991-93 biennium to compensate for previous underpayment (156,157) (see ch. 2).

Prepaid Plans

In December 1984, Oregon received a Federal

regulatory waiver under section 1915(b) of the

Social Security Act to implement a managed care

n ficludes hbomto~ and x-ray semices (reimbursed on a fee schedule) and outpatient serviees provided to general aSSiStiCe Clients (reimbmCd

at 59 percent of cost).

29 For hospi~s ~~ ~ti~tion betw~n 1 and 2 s~&d dev~tio~ of tie me~, tie DRG mte increases 5 percent fOr hospitals 2 tO 3 sti~d

deviations above the meu 10 percent; for hospitals greater than 3 standard deviations above, 25 percent (144).

w Hospi@s cm dsoq- for DSH sta~5 based on their low-income utilization rates (144). In 1990, no megon hospiti were desi~ted ~ DSH

under these rules (213).

31 FY 1989 act@ FY 1990 estimated, FY 1991 pmJeCted.

32 ~clude5 Papent and co5t for@~ ~patient ~d outpatient s~ices. Dam obtiti from tie American Hospital Association’s 1989 hINId SUIVCy

of Hospitals. Medicaid costs estimated by multiplying hospitals’ reported Medicaid charges by each hospital’s overall cost-to-charge ratio (203).

33 See ch$ 5 for a description of the various Medicaid eligibility categories.
Chapter 4--Implications for Health Care Providers . 93

system for its AFDC33 Medicaid enrollees.34 Enrollment in prepaid plans in Oregon has since increased

to the current level of some 68,000 AFDC Medicaid

enrollees 35 (approximately 54 percent of the total

AFDC enrollment and approximately 31 percent of

total Medicaid enrollment36 in 1991), making it

second only to Arizona in the proportion of its

Medicaid population enrolled in PHPs (252). These

PHPs include one fully capitated HMO and 15 PCOs

in which selected outpatient services, but not inpatient services, are capitated. At present, enrollment

of AFDC clients in a PHP is mandatory in nine

counties (seven of which are in metropolitan statistical areas) and optional in a tenth county. All

non-AFDC eligibles and all eligibles residing outside this 10-county area receive services on an

unrestricted FFS basis.

Even in areas where enrollment in a PHP is

required, some AFDC eligibles are still in the FFS

system. At any given time, roughly 20 percent of the

AFDC eligibles in the nine mandatory managed care

counties receive health care on an FFS basis

(40,212). These eligibles include:

●

●

●

●

●

Individuals who have other sources of insurance coverage and are exempt from mandated

enrollment in a PHP;

Pregnant women who become Medicaideligible in their third trimester and who elect to

continue receiving FFS services through delivery;

New AFDC eligibles, who may take up to 2

months to become enrolled in a PCO or an

HMO after becoming eligible;

Individuals who elect to disenroll from their

previous plan and have not yet been enrolled in

another plan;37 and

Individuals who exceed their PHP’s stop-loss

limit in any given year (see below) (40).

Fully Capitated Plans—A single HMO-Kaiser

Permanence, Northwest Region-serves approximately 11,60038 AFDC eligibles under the current

program. Kaiser Permanence is prepaid on a capitated basis for all acute health care services except

dental services. The cavitation rate is currently set at

100 percent of FFS equivalent costs.39

Partially Capitated Plans—As of October 1991,

there were 15 PCOs serving approximately 56,400

AFDC eligibles in the 10-county area (252). PCOs

are prepaid on a capitated basis for a basic package

of services that includes physician services (including podiatry, osteopathic, nurse practitioner, and

physician assistant services), laboratory, radiology,

and EPSDT40 services. Between 1985 and 1989,

OMAP reported savings of $7.5 million relative to

expected FFS payments for PCO enrollees (41).41

The PCOs are made up of anywhere from 4 to 280

primary care physicians (305). Some are experienced managed care providers (e.g., Capitol Health

Care, a well-established independent practice association (IPA) that also has private fully capitated

business), others are primary care clinics (four

FQHCs currently participate as PCOs—see table

4-3), and still others are loose associations of

primary care physicians who are organizationally

bound merely by virtue of their contract with OMAP

(245). The annual contract stipulates a maximum

Medicaid caseload per PCO, based on the number of

primary care physicians available. Risk is managed

through a stop-loss mechanism whereby enrollees

whose health care costs exceed an established

threshold in a given year leave the PCO and receive

the remainder of their services through the FFS

system.

PCOs have the option of receiving capitated

payment and assuming risk for services other than

3.I ~egon ~~~w ~b~~ an extended waiver tit permi~ it to expand mandato~ enrollment hl prepaid plain to o~er categories of efigiblm. ~

date, however, Oregon has only enrolled AFDC eligibles in the prepaid system.

35 Emollment m of october 1991. Includes 11,580 Medicaid eligibles enrolled in the Kaiser pe~ ente HMO on a full-risk basis. Medicaid

enrollment in Kaiser Permanence is authorized by Federal statute and hence is not officially part of Oregon’s current 1915(b) waiver program.

% TOM emol~ent hcludes elderly, blind, disabled, generrd assistance, medically needy, etc.

37 ~ he Cunent sy~tem, -c eli@ble5 ~ ~n&tov mamged care co~ties Cm ch~se &ween at least two prepaid health platIs.

38 ~o~ent as of October 1991 (252).

39 Qlmtion rates for ~~p-y and fi~y capi~~d plans are W on ex~t~ FFS COS~ of an actidly @vdent Cli~t pOpdatiO~ prOJeCted

using utilization data for AFDC Medicaid enrollees in the FFS system (41). There is no separate administrative allowance for prepaid plans in the current

system.

@ UIY and ~ritic screening, diagnosis, and treatment services fOr ChddZn.

41 Savtigs were attributed p~“ y to reduction of unnecessary inpatient services by PCOS, but also to reduction of unnecessary outpatient and

prescription drug services (41,177).
94 ● Evaluation of the Oregon Medicaid Proposal

those in the basic package, but few of them have

done so to date. Currently, four PCOs are capitated

for chiropractic services, four for dental services,

one for physical therapy services, and one for

pharmaceutical services (table 4-10) (213,252). In

addition, all PCOs are required to act as gatekeepers

to preapprove all nonemergency inpatient and outpatient hospital services.

42 To provide an incentive

for decreased hospital inpatient and outpatient and

prescription drug services utilization, OMAP shares

savings relative to FFS equivalent costs43 50/50 with

the PCOs. Utilization of certain other services is

controlled by OMAP directly through prior authorization (e.g., physical, occupational, and speechlanguage therapy; home health services-see table

4-9).

A forthcoming U.S. General Accounting Office

(GAO) study will focus more closely on the role of

prepaid managed care delivery systems in the

current Oregon Medicaid program. Even if the

waiver is not granted, OMAP has indicated that it

intends to expand its current PCO program, adding

more plans and increasing enrollment (177).

Utilization Data Collection in PHPs--One of the

incentives for providers to serve Medicaid patients

through PHPs is reduction of the paperwork and

other ‘‘red tape’ associated with FFS Medicaid

(17,143). However, this often comes at the expense

of collecting detailed, consistent utilization data,

which is useful for program evaluation. A few State

Medicaid PHP demonstrations (e.g., Tennessee,

Arizona) have tried “shadow billing”44 in order to

better evaluate differences in utilization and access

between FFS and PHP enrollee groups. Oregon

chose not to do so in the current system in order to

maintain the incentive of reduced billing and data

collection requirements (212). Until October 1990,

in fact, PHPs in Oregon were not providing any

systematic utilization data to the State. Since October 1990, PCOs have been required to submit

quarterly reports to OMAP detailing utilization for

selected services (166). Services identified are

groups of procedure codes that reflect different

services types of interest+. g., EPSDT and physician office services (166). The first data were not

reported until the end of the first quarter of 1991, and

data reported for the third quarter of 1991, although

obtained from all PCO providers, were still incomplete and inconsistent as of December 1991 (310).45

Information on the utilization of noncapitated

(i.e., FFS) services by PHP enrollees is available

through OMAP’s claims database. For noncapitated

services, OMAP provides plans with monthly reports of utilization by their enrollee population by

type of service (166,213). Such reports help OMAP

and the PHPs confirm that all referral services were

preapproved by the primary care physician.

Dental Services

Although most Medicaid enrollees receive dental

services on an unrestricted FFS basis,46 a growing

number receive them through one of two types of

managed care arrangements: PCOs that are capitated

for dental services, or special ‘dental care organizations” (DCOs) that provide services on a prepaid,

capitated basis. As of February 1992, 28,479 clients

were enrolled in three DCOs and four PCOs that

cover dental services (213). OMAP is in the process

of expanding DCO enrollment (252).

HEALTH CARE DELIVERY

UNDER THE DEMONSTRATION

The State of Oregon projects that, in year 1 of the

demonstration, an additional 46,800 people would

be covered by Medicaid-a 31 percent increase over

projected enrollment in the existing Medicaid pro42 ~g~y, PCOS *o c=-managed physical, speech-language, and occupational therapy services, but prior authorization by OMAP is now

required for these services (see table 4-9).

43 Sav@s me ~c~ated ~ ~ompfig ~~~tion of ~~e ~~i~s by KO ~llees with uwon by ~ ac-y equivalent gl’ollp of FPS

Medicaid enrollees.

44 ~~s~ow billing’ is a practice in whi~ p~p~d providms m ~uh~ to submit ‘‘dummy’ claixns that provide data as detailed as those required

on FFS claims forms (e.g., patient characteristics, date of service, diagnoses, specific procedures performed, provider identilcation).

M ~~ou~ &U from tie ~t qu~m of 191 me ~Ft~ t. ~p~ve (310), & bm~ Mtegorim reprm~tti would not be @lcient to serve as a

baseline for detailed measurement of the impact of service prioritization under the demonstration (see ch. 8).

46 Undm the Cment M~c~d ~~in @goq most den~ c= for ad~ts is not ~ve~. The proposed demonstration would expand coverage

for dental care to the entire Medicaid population.
Chapter 4--Implications for Health Care Providers . 95

gram for that year (177).47 By the final year, an

additional 120,000 people are expected to be covered beyond projected enrollment for that year

without the demonstration (42, 177).48

To accommodate the expanded number of Medicaid eligibles and to control the costs of providing

their care, Oregon would expand its prepaid managed care system significantly. The proposed expansions would not merely entail increased enrollment

in existing plans; rather, they would entail a complete restructuring of the current system and the

creation of a number of entirely new fully capitated

plans to provide services to a Medicaid population

nearly twice as large as that currently served. The

proposed expansions include:

●

●

●

●

Converting some existing PCOs to fully capitated plans,

Expanding enrollment in existing prepaid plans

and contracting with new fully capitated plans49

to serve the expanded Medicaid population,

Developing new PCOs in some rural areas, and

Implementing a case-managed FFS system in

rural areas where prepaid care arrangements are

not feasible.

OMAP would require that all prepaid plans have

adequate referral mechanisms and subcontractual

arrangements to provide the full range of services

covered under the benefit package (174).

Providers in the Proposed System

The levels of risk and other characteristics of

providers in the proposed system, as described in the

waiver application, would be as follows (177,212):

1. Fully capitated health plans (FCHPs)50

FCHPs would provide and pay for all inpatient,

outpatient, and ancillary services (with the exception of select optional services51) either directly or through subcontractors. The State would

pay hospital claims on behalf of any FCHP that

is permitted such an option in its contract.52

FCHPs would be the required mode of delivery

in the 9-county area currently served by PCOs

and one HMO.

A.

B.

Full-risk contract-Provider is at full risk for

individual patient losses. Only federally qualified HMOs would be allowed to participate

at this level of risk.

Buffered-risk contract—Provider purchases

insurance against high-loss patients either

directly from the State or from a private

insurer. A provider could choose among the

following three levels of stop-loss insurance.

1.

2.

3.

High--Annual $10,000 deductible, 5 percent plan-paid coinsurance, and a cap of

$100,000 on stop-loss eligible expenses. In

other words, the plan is liable for 100

percent of per-enrollee costs up to $10,000;

for 5 percent of costs between $10,000 and

$100,000; and for none of the costs in

excess of $100,000.

Medium—Annual $15,000 deductible, 10

percent coinsurance, and a $100,000 cap.

Low--Annual $30,000 deductible, 20 percent coinsurance, and a $100,000 cap.

Other risk protections for FCHPs would include:

reduced liability for persons who are hospitalized at

the time of their enrollment;53 a fixed additional

47 pement ficreme b~d on ~mol~ent prOjwtiom for State ~1993. me ori~ wet date for program startup was July 1, 1%2 (the beginning

of State FY 1993). Because OMAP had not obtained waiver approval from the Health Care Financing Administration (HCFA) by the end of January

1992 as expected, it has announced that it will delay program startup on a month-to-month basis pending approval (e.g., if approved at the end of February

1992, startup would have been Aug. 1, 1992) (256).

4S me 120,~ Projectio n does not~sume implementation of tie employ~ ~date (~c~. 1 ~d s). Ethe employer mandate k fully hllplementd,

projected Medicaid enrollment for the final year would be 96,400.

49 Some Pmswctive fully ~apitated pl~ ~~dy ~ve co~erci~ HMO busfims; oth~ -y have no experience as fidl-risk providexs (212).

Xl Here ad elsewhme ~ ~s chapter, fullycapitat~ pl~s ~der the pmpos~ syst~ are ref~ed to as F~s rather * H?vfoS. we Kai~

Permanence, the only current Medicaid prepaid provider capitated for the full range of services, is a federally qualified HMO, some filly capitated

providers under the new system would probably not be.

SI Optional swlws for FCHp cavitation include dental, materfity case managemen~ abortiom family planning, certain contraceptive and psychiatric

prescription drugs, and patient transportation (175).

m ~s option ~o~d & tie av~able to s~lerF~s and FCHPS located in noncompetitive hospital markets. nese Pla~’ ~Pitation rates wo~d

be adjusted to reflect prevailing Medicaid hospital payment rates (DRG- or cost-based, depending on the hospital) and OMAP would bill the plan for

the cost of claims paid (177).

w ~s protection would not apply to newborns whose mothers were enrolled on the day of b~ (177).
96 ● Evaluation of the Oregon Medicaid Proposal

payment for each maternity case occurring above a

specified average limit; and adjustment of cavitation

rates by eligibility cohort (see below).

2. Physician care organizations

PCOs would be paid on a per capita basis for all

outpatient physician, laboratory, x-ray, and preventive services. Additional services such as prescription drugs, physical therapy, and dental care

could be either included or excluded from the

PCO cavitation rate. Hospital inpatient and

outpatient services54 would be preauthorized by

the PCO but would be billed to and paid by

OMAP at prevailing Medicaid FFS rates. PCOs

would be the preferred mode of delivery in all

non-FCHP counties where there is critical mass

for enrollment.

A.

B.

c.

First level of risk: fewer than 500 enrollees—

These PCOs would not be paid a cavitation

rate, but would instead be reimbursed at

prevailing FFS Medicaid rates for PCO services. They would still be fully responsible for

managing care of enrollees according to PCO

contract provisions and would still receive 40

percent of any estimated savings for hospital

inpatient, hospital outpatient, and prescription drug services relative to an actuarially

determined FFS target. This “no risk’ approach is designed to protect new, small plans

as they enter the system. OMAP does not

anticipate that many PCOs would remain at

this level of risk for long,

Second level of risk: 500 to 999 enrollees or

1,000 or more enrollees and less than 12

months’ experience as a contractor—These

PCOs would be paid on a per capita basis for

PCO services and would retain 50 percent of

any estimated savings for hospital inpatient,

hospital outpatient, and prescription drug

services.

Third level of risk: 1,000 or more enrollees

and at least 12 months’ experience as a

contractor—These PCOs would be paid on a

per capita basis for PCO services and would

retain 60 percent of any estimated savings for

hospital inpatient, hospital outpatient, and

prescription drug services. They would also

beat partial risk for the noncapitated services

they case manage-the State would withhold

a payment penalty, limited to the lesser of half

of the excessive cost or 10 percent of the

PCO’s cavitation rate, if the cost of noncapitated services used by their enrollees is higher

than actuarially targeted.

3. Case-managed fee-for-service

Physicians and other providers would be paid on

an FFS basis at prevailing Medicaid rates for all

covered services. Case-managed FFS would be

the mode of service delivery in those rural

counties that lack a sufficient enrollee population

to make the PCO model feasible, and for patients

in other counties who don’t enroll in PHPs. A

designated primary care case manager (PCCM)

would preauthorize any nonemergency care provided by other individuals or institutions. PCCMs

would be paid a small flat per capita fee ($3 per

enrollee per month) for the administrative costs

of management. Most PCCMs would be primary

care physicians, although nurse practitioners and

physician assistants would also be allowed to

participate. PCCMs would be required to:

●

●

●

●

●

●

●

Provide routine primary care services;

Deliver emergency medical treatment or refer

the patient to another appropriate source of care

when the PCCM is unavailable;

Conduct emergency admission review within

24 hours of receiving notice that a patient has

undergone an emergency hospitalization, to

confirm appropriateness and initiate discharge

planning;

Develop an adequate referral network to ensure

access to the full spectrum of covered services,

refer patients to appropriate specialists, and

preapprove all referral care;

If possible, admit and discharge hospital patients or oversee their admission and discharge

by a specialist;

Maintain a central medical record for each

enrollee; and

Participate in program-wide oversight, monitoring, and quality assurance activities as directed by OMAP (177).

For catastrophic-cost patients, OMAP itself would

offer supplemental case-management services (e.g.,

designate central managers for patients in special

M &clU&g professional components of hospital outpatient services.
Chapter 4--Implications for Health Care Providers . 97

categories, such as those with AIDS55). The agency

would also provide oversight of PCCMs and preauthorize certain elective procedures.

The explicit goal of the State of Oregon is to

encourage provider participation in prepaid managed care wherever possible (177,212). The spectrum of risk arrangements proposed for PHPs

reflects this goal and provides a strategy for gradual

conversion to prepaid health care for the entire State.

Groups of FFS physicians are encouraged to form

PCOs and, if their enrollment is below 500, can

continue to receive FFS reimbursement for the first

12 months as they build their patient base and

become more familiar with the system. After that,

they can proceed to assume higher levels of risk

under partial cavitation or become full-risk plans if

they so desire. Ultimately, OMAP hopes to extend

prepaid health care to even the most rural areas of the

State (212).

Although not described in the waiver application,

the current dental managed care system would also

be expanded under the demonstration, with PCOs

and FCHPs being given the option of cavitation for

dental services. Enrollees in plans not capitated for

dental services would receive their dental care on an

FFS basis or through an expanded DCO system

(212).

Distribution of Enrollees by Delivery System

In a nine-county area containing seven of Oregon’s eight metropolitan counties, OMAP intends to

enter solely into fully capitated contractual arrangements (table 4-11 ) at one of the varying levels of risk

described above. Selected other counties are targeted for PCO contract negotiations, and enrollees in

the remaining counties would choose or be assigned

to PCCMs. Although OMAP expects that certain

counties will not have sufficient caseloads to make

prepaid arrangements feasible, it intends to execute

prepaid contracts with any qualified, willing providers in these counties (175).

Table 4-12 illustrates the magnitude of proposed

delivery system changes. According to State sources,

the over 56,000 Medicaid beneficiaries currently

enrolled in PCOs would automatically be transferred

to FCHPs at program startup (212). Non-AFDC

current eligibles and new eligibles would be enrolled

in FCHPs, PCOs, or with PCCMs, depending on

their geographic location and other characteristics.

By program steady state, 54.8 percent of all beneficiaries are projected to be enrolled in FCHPs; another

17.4 percent in partial-risk PCOs; and the remainder

(27.8 percent) in case-managed FFS (table 4-12)

(40). Implementation of the case-managed FFS

system, which would affect mostly the rural areas of

the State, is expected to take considerably longer

than the enrollment of clients into PHPs (40). OMAP

estimates that all enrollees not in a prepaid plan

would be enrolled with a PCCM by the 10th month

of the demonstration (212).

The frost-year cost estimates assume that some

eligibles in case-managed FFS areas will receive

noncase-managed FFS care for the first nine months

of the demonstration (40). overall, cost estimates

assume that delivery systems in each county will be

operational roughly by the target dates shown in

table 4-11.56

Cavitation Rate Calculation

OMAP released preliminary cavitation rates to

prospective prepaid providers on November 26,

1991 as part of an official request for application

(RFA) (175). The proposed rates were revised on

February 7, 1992, to correct for errors in expected

length of eligibility and utilization patterns of the

demonstration’s eligible population (176).57 The

rates, developed by OMAP in conjunction with the

actuarial firm Coopers & Lybrand, reflect the

anticipated cost of providing all covered services

(i.e., diagnostic services and all services in conditiontreatment (CT) pairs 1 through 587) during the

startup year of the demonstration within a prepaid

managed care setting. While cavitation rates for

prepaid providers in Oregon’s current Medicaid

program are based on Medicaid FFS equivalent

costs, the new rates are based on a detailed actuarial

‘f’ Acquired immunodeficiency syndrome.

S6 me on- ~te for ~rowm ~~p Wm July 1, 1992, OMAp intends to delay fiplemen~tion of tie preptid system on a month-to-month basis

pending fd approval (e.g., stzu-tup date would have been Aug. 1, 1992 if waiver had been approved by the end of February 1992) (256).

57 me ~on=tiom re~ted ~ a subs~n~ ~crwe in he est~t~ rates for pov@ level m~c~ (PLM) women and a slight d~~ in the rates

for PLM children ( 175, 176).
98 ● Evaluation of the Oregon Medicaid Proposal

Table 4-1 l-Current and Proposed Oregon Medicaid Delivery System by County

Delivery system

County 1991 Proposed under demonstration

Metropolitan countiesb

Clackamas . . . . . . . . . . . . . . . . . . . . . . . .

Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Marion . . . . . . . . . . . . . . . . . . . . . . . . . . .

Multnomah . . . ... , . . . . . . . . . . . . . . . . .

Polk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Washington . . . . . . . . . . . . . . . . . . . . . . .

Yamhill . . . . . . . . . . . . . . . . . . . . . . . . . .

Nonmetropolitan countiesb

Baker . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benson .,...... . . . . . . . . . . . . . . . . . . .

Clatsop . . . . . . . . . . . . . . . . . . . . . . . . . . .

Columbia . . . . . . . . . . . . . . . . . . . . . . . . .

coos . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Crook . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Curry . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deschutes . . . . . . . . . . . . . . . . . . . . . . . .

Douglas . . . . . . . . . . . . . . . . . . . . . . . . . .

Gilliam . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Harney . . . . . . . . . . . . . . . . . . . . . . . . . .

Hood River . . . . . . . . . . . . . . . . . . . . . . .

Jackson

Jefferson . . . . . . . . . . . . . . . . . . . . . . . . .

Josephine . . . . . . . . . . . . . . . . . . . . . . . .

Klamath . . . . . . . . . . . . . . . . . . . . . . . . . .

Lake . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lincoln ...,.... . . . . . . . . . . . . . . . . . . .

Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Malheur . . . . . . . . . . . . . . . . . . . . . . . . . .

Morrow . . . . . . . . . . . . . . . . . . . . . . . . . .

Sherman . . . . . . . . . . . . . . . . . . . . . . . . .

Tillamook . . . . . . . . . . . . . . . . . . . . . . . .

Umatilla . . . . . . . . . . . . . . . . . . . . . . . . . .

Union . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wallowa . . . . . . . . . . . . . . . . . . . . . . . . .

Wasco . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wheeler . . . . . . . . . . . . . . . . . . . . . . . . . .

FFS

PHP mandatory (AFDC only)

FFS

FFS

FFS

FFS

FFS

FFS

FFS

FFS

FFS

FFS

FFS

PHP optional (AFDC only)

FFS

FFS

FFS

FFS

FFS

PHP mandatory(AFDC only)

FFS

FFS

FFS

FFS

FFS

FFS

FFS

FFS

FFS

PCOs by start of year 3

FCHPs by startup

PCOs by start of year 2

PCOs by start of year 2

PCOs by middle of year 2

PCOs by startup

Case-managed FFS by startupe

PCOs by startup

PCOs by start of year 2

Case-managed FFS by startupe

Case-managed FFS by startupe

PCOs by startup

PCOs by start of year 3

FCHPs or PCOs by startupd

PCOs by startup

PCOs by startup

PCOs by startup

Case-managed FFS by startupe

PCOs by start of year 2

FCHPs by startup

PCOs by start of year 3

Case-managed FFS by startupe

PCOs by start of year 3

PCOs by startup

PCOs by start of year 3

PCOs by startup

Case-managed FFS by startupe

PCOs by start of year 3

Case-managed FFS by startupe

ABBREVIATIONS: AFDC. Aid to Families With Dependent Children; FCHP - fully capitated health plan; FFS = fee-for-service; OMAP. Office of Medieal

Assistance Programs; PCO - physiaan care organization (partially capitated health plan); PHP - prepaid health plan.

a me dat~ in the far right-had column ref[~t the time atwh~h oMAp h~ ant~ipat~ pco and FCHp ~ntracts to be finalized in that county. The original

antiapated date for program startup was July 1, 1992. Contract negotiations have since been delayed on a month-to-month basis pending approval of the

waiver by the U.S. Health Care Finandng Administration (see text).

b Metropolitan and nonmetropcditan areas as defined by the U.S. Bureau of the Census.

C In the ~rrent M~@~ manq~ are system, AF~ r~i@ents are quir~ to enroll in 1 of 15 PCOS or in the Kaiser Permanence HMO.

d The r~uest for ap~i=tion sent t. prov~er~ Nov. ~, 1991 indi~tes that ~th PCO and FCHP ~ntr~~ would bS negotiated in Jackson County.

e Although OMAp exp=~ ~~-manag~ FFsto be the primary m~ of serv~e delivery un~rthe demonstration in these counties, it h= indicated it would

execute prepaid contracta with any willing and qualified providers.

SOURCES: L. Read, Director, Prioritized Health Care Systems, Office of Medical Assistance Programs, Oregon Department of Human Resouroes, Salem,

OR, personal communications, July 10 and Dec. 3, 1991; Oregon Department of Human Resources, Office of Medieal Assistance Programs,

Salem, OR, The Oregon hfedicakd Demonstration ~“verAppkafkm, submitted to the Health Care Financing Administration Aug. 16, 1991;

Oregon Department of Human Resourees, Office of Medieal Assistance Programs, ~egon Health P/an: Prepdd Hea/th P/an %qJest for

App/icaf/ens, (Salem, OR: OMAP, Nov. 26, 1991); L. Read, Director, Prioritized Health Care Systems, Office of Medical Asslstanee Programs,

Oregon Department of Human Resources, Salem, OR, letter to E.J. Power, Office of Technology Assessment, Mar. 4, 1992.

analysis of both private and Medicaid claims, description of the process outlined in the November

adjusted to exclude costs of services below line RFA. The document indicates that inclusion or

587.58 Although language in OMAP’s waiver appli- exclusion of some of the “basic’ services may be

cation suggested that rates would be negotiated with negotiated, but the service-specific rates calculated

prepaid providers, rate setting is a more accurate by Coopers& Lybrand are not negotiable (175).
Chapter 4--Implications for Health Care Providers ● 99

Table 4-12—Distribution of Oregon Medicaid Enrollment by Eligibility Categorya and Health Care Delivery System:

1993 Without Demonstration, 1993 Demonstration Startup,b and 1993 Demonstration Steady State

Delivery systemc

Eligibility category FCHP PCO CMFFS-Man FFS-Man CMFFS FFS Total

Average fiscal year 1993 without demonstration b

AFDC . . . . . . . . . . . . . . . . . . . . . . . . . 6.17 38.56

General assistance . . . . . . . . . . . . . . 0.00 0.00

PLM adults . . . . . . . . . . . . . . . . . . . . 0.00 0.00

PLM children . . . . . . . . . . ... , . . . . . 0.00 0.00

New categorical eligibles . . . . . . . . . NA NA

New noncategorical eligibles . . . . . . N A NA

Total . . . . . . . . . . . . . . . . . . . . . . . 6.17 38.56

Average fiscal year 1993 at demonstration startup b

AFDC . . . . . . . . . . . . . . . . . . . . . . . . . 34.48 10.37

General assistance . . . . . . . . . . . . . . 0.89 0.19

PLM adults . . . . . . . . . . . . . . . . . . . . 0.96 0.51

PLM children . . . . . . . . . . . . . . . . . . . 2.79 1.47

New categorical eligibles . . . . . . . . . 2.91 0.93

New noncategorical eligibles . . . . . . 10.60 3.38

Total . . . . . . . . . . . . . . . . . . . . . . . 52.63 16.85

Average fiscal year 1993 at demonstration steady state b

AFDC . . . . . . . . . . . . . . . . . . . . . . . . . 26.30 8.21

General assistance . . . . . . . . . . . . . . 0.98 0.21

PLM adults . . . . . . . . . . . . . . . . . . . . 1.05 0.40

PLM children . . . . . . . . . . . . . . . . . . . 3.11 1.18

New categorical eligibles . . . . . . . . . 4.89 1.56

New noncategorical eligibles , ., . . . 18.45 5.88

Total . . . . . . . . . . . . . . . . . . . . . . . 54.78 17.44

Percent of enrollees in system

0.00 0.00

0.00 0.00

0,00 0.00

0.00 0.00

NA NA

NA NA

0.00 0.00

5.79 2.59

0.67 0.08

0.70 0.11

2.03 0.31

0.68 0.00

2.47 0,00

12.33 3.09

6.09 0.00

0.21 0.00

0.26 0.00

0.76 0.00

1.14 0.00

4.29 0.00

12.75 0.00

0.00

0.00

0.00

0.00

NA

NA

0.00

6.20

0.18

0.36

1,03

0.78

2.86

11.41

7.00

0.20

0.39

1.15

1.32

4.97

15.03

36.69

1.76

3.98

12.84

NA

NA

55.27

2.97

0.08

0.16

0.47

0.00

0.00

3.69

0.00

0.00

0.00

0.00

0.00

0.00

0.00

81.42

1.76

3.98

12,84

NA

NA

100,00

62.40

2.10

2.80

8.10

5.30

19.30

100.00

47.60

1.60

2,10

6.20

8.90

33.60

100.00

ABBREVIATIONS: NA - not applicable; FCHP - fully capitatad health plan; PCO = partially capitatad health plan; CMFFS = case-managed fee-for-service

(i.e., individuals enrolled with a primary care case manager (PCCM) who manages their fee-for-service care); CM FFS-Man - individuals

in areas of the State where enrollment in a prepaid plan is mandatory who receive their care on a CMFFS basis; FFS-Man = individuals

receiving services on an unrestricted fee-for-service basis in areas of the State where enrollment in a prepa.kf health plan is mandatory;

FFS - individuals receiving services on an unrestricted fee-for-service basis in areas of the State where enrollment with a PCCM is

mandatory; AFDC - Aid to Families with Dependent Children; PLM - poverty level medical.

a ~igi~lity ~t%orie~ in this ta~e ~rr~w~ t. standard M~@id eligibility ~t~ories and not to the cat~ories US~ by ~~on Offb of Mdical AsSi.stam

Programs to calculate cavitation rates under the proposed demonstration.

b Dat~ refl=torlginal anticipat~ program sta~up date of Ju& 1, 1992 program startup h= ~n delay~ on a month-to-month basis pending H~lth Care

Financing Administration approval of the waiver (see text). Fiscal year 1993 startup and steady-state enrollment estimates differ due to assumptions

regarding the pace of uptake of eligibles into the various delivery systems. Oregon assumes steady state would be achieved by the end of the 9th month

of the demonstration.

C Enrollment distribution by &livev System was caiculat~ by coopers & Lybrand bas~ on information provid~ by the Oregon offi~ of Medical Assistance

Programs.

SOURCE: Coopers & Lybrand, Oregon Mediaid Basic Health Services Program: Calculation of Per Capita Costs Report (San Francisco, CA: Coopers &

Lybrand, May 1, 1991), exhibits 24-A, 24-B; Coopers & Lybrand, San Francisco, CA, unpublished data provided to Office of Technology

Assessment, September 1991.

There are a total of 40 separate basic cavitation Geographic regions:

rate estimates under the plan—a partial and full 1.

cavitation rate for each of four eligibility groups in

each of five geographic regions, as follows: 2.

Eligibility groups: 3.

1.

2.

3.

4.

All Medicaid enrollees eligible under the

demonstration with incomes below 100 per- 4.

5

cent of the Federal poverty level (FPL) except

Portland tri-county area (Clackamas, Multnomah, and Washington Counties).

Linn, Benton, Marion, Polk, and Yamhill

Counties.

Lane County.

Jackson, Josephine, and Douglas Counties.

All other counties.

for general assistance enrollees. Each cavitation rate is broken down into specific

Poverty level medical (PLM) adults with categories of mandatory (i.e., must be capitated) and

incomes between 100 and 133 percent FPL. optional (plans have the option of receiving capiPLM children under age 6 with incomes tated payment) services. Table 4-13 illustrates this

between 100 and 133 percent FPL. breakdown for eligibility group 1 in region 1.

General assistance enrollees. Prospective providers can use tables such as this to
100 ● Evaluation of the Oregon Medicaid Proposal

Table 4-13-Breakdown of Preliminary Cavitation Rates for Providers in the Oregon Medicaid Demonstration

in State Fiscal Year 1993: Rates for Clackamas, Multnomah, and Washington Counties for All Demonstration

Eligibles Under 100 Percent of the Federal Poverty Level Except General Assistancea

Fully capitated health plan covered services Physician care organization covered services

Physician

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Therapeutic abortionb 

. . . . . . . . . . . . . . . . . . . . . . . .

Maternity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Somatic psychiatry. . . . . . . . . . . . . . . . . . . . . . . . . .

Family planningb c 

. . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outpatient

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maternity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Somatic psychiatry. . . . . . . . . . . . . . . . . . . . . ... , .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prescription drug

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Family planningb c 

. . . . . . . . . . . . . . . . . . . . . . . . . . .

Psychiatric b 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inpatient

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Family planningb C ., . . . . . . . . . . . . . . . . . . . . . . . . .

Nursing facility.. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hospice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maternity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dentalb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maternity management . . . . . . . . . . . . . . . . . . . . . . . .

Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Home health service . . . . . . . . . . . . . . . . . . . . . . . . . . .

Physical/occupational therapy . . . . . . . . . . . . . . . . . . .

Transportation (ambulance). . . . . . . . . . . . . . . . . . . . .

Transportation (other)b 

. . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous medicalb 

. . . . . . . . . . . . . . . . . . . . . . . .

Total service costd.... . . . . . . . . . . . . . . . . . . . . . .

Administrative coste. . . . . . . . . . . . . . . . . . . . . . . . . .

Total with administration cost . . . . . . . . . . . . . . . . . .

Maternity/newborn withholdf 

. . . . . . . . . . . . . . . . . . .

$23.13

0.75

8.81

0.14

1.12

33.95

11.80

0.29

0.07

12.16

6.05

0.33

0.18

6.56

28.54

0.01

0.00

0.01

14.02

42.58

14.64

0.19

0.88

0.25

0.26

0.69

0.52

0.73

113.41

7.24

120.65

-8.84

Basic services

Physician

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maternity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outpatient

Professional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maternity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lab and x-ray... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total of mandatory services . . . . . . . . . . . . . . . . . . .

Administrative feeg 

. . . . . . . . . . . . . . . . . . . . . . . . . .

Total with administration fee . . . . . . . . . . . . . . . . . . .

Maternity/newborn withholdf

. . . . . . . . . . . . . . . . . . .

Optional services

Dentalb 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maternity management. . . . . . . . . . . . . . . . . . . . . . . .

Outpatient somatic psychiatryb . . . . . . . . . . . . . . . . . .

Outpatient--facility b

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Physical/occupational therapyb 

. . . . . . . . . . . . . . . . . .

Physician therapeutic abortionb 

. . . . . . . . . . . . . . . . . .

Physician family planningbc 

. . . . . . . . . . . . . . . . . . . . .

physician somatic psychiatryb 

. . . . . . . . . . . . . . . . . . .

Prescription drugs--basicb 

. . . . . . . . . . . . . . . . . . . . . .

Prescription drugs--family planningb c

. . . . . . . . . . . . .

Prescription drugs--psychiatricb 

. . . . . . . . . . . . . . . . . .

Transportation (ambulance)b 

. . . . . . . . . . . . . . . . . . . .

Transportation (other)b 

. . . . . . . . . . . . . . . . . . . . . . . . .

Vision b ....,.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$23.13

8.81

31.94

1.33

0.29

3.52

5,14

37.08

4.00

41.08

-2.30

14,64

0,19

0,07

6.94

0.26

0.75

1,12

0.14

6.05

0.33

0.18

0,69

0.52

0.88

a Rates shown reflect~justments forfunding through line 5870f the prioritized liStand fOrantiCipated managedmre=tings.

blndicates optional services, subject to negotiation regarding inclusion inmntract.

cReflects 6.8 percent r~uction for universal dientaccess to famiiypianning setices.

dTotalbased on theassumption that ail services areinduded in the ca@tation contract.

eA6permnt ad m inist rative cost al~wanceforafl capitatedservices isiflclddforful~~pitatd healthplans.

fT~~~thheldfromthetotal ~@tation rate andaW~~toward afundto support prep~d plans With adispmportionately high share of maternity/newborn

cases.

9Administrativecostforphysician care organiztions is setataftatfee of $4 per enrollee permonth.

SOURCE: Oregon Department of Human Resources, Office of Medical Assistance Programs, Oregon Hea/fh P/arr: Prepaid Hea/th P/arr/?equest for

ApphkationsAddifionalh?formafion (Salem,OR:OMAP, Feb. 7,1992).

estimate the rates they would receive under the duration of a PHP’s contract (78). This would

demonstration. Final rates would be different, how- change under the demonstration in order to allow

ever, because these estimates do not reflect certain greater expenditure control by OMAP in the event of

applicable premium deductions (e.g., high-risk ma- any changes in the benefit package during a contract

ternity and newborn care, stop-loss insurance). cycle. Under the demonstration, cavitation rates

In the current prepaid system in Oregon, capita- would be subject to change at any time during the

tion rates are set annually and are fixed for the contract cycle, either as the result of technical
Chapter 4--Implications for Health Care Providers ● 101

amendments to the list, legislative amendment of the

benefit package, or other unspecified amendments to

the prepaid contracts (174). PHPs would be entitled

to a minimum of 30 to 60 days’ notice59 before the

new rates went into effect, and they would be

allowed to terminate their contracts on 30 days’

notice on the condition that they facilitate full

transfer of all their enrollees to alternative providers

(173, 174). However, the model PCO/FCHP contract

states that financial loss would not be considered

sufficient cause for termination of contract (174),

IMPLICATIONS OF

DEMONSTRATION CHANGES

FOR PROVIDERS

Delivery System Changes

Implementation of prepaid managed care systems

generally involves changes in the distribution of

enrollees among existing providers; limitation of

enrollees’ freedom of choice among practitioners;

changes in provider payment and participation; and

shifts in incentives to over- or underprovide services. In Medicaid to date, mandatory enrollment of

eligibles in prepaid and managed care delivery

systems has been allowed only under waiver authority due to concerns about possible negative effects

some of these changes might have on quality and

accessibility of Medicaid services. Oregon has

operated one of the largest prepaid Medicaid programs in the country for the last 7 years in and

around its metropolitan areas.

Because the demonstration’s predicted costs and

effects depend heavily on the assumption that most

enrollees will be in prepaid managed care, the

capacity of this system to accommodate an estimated 120,000 new eligibles is critical. preliminary

results of a study being conducted by GAO indicate

that the current managed care system in Oregon

appears to have avoided many of the pitfalls of

similar systems in other States (238). However,

GAO has recommended that the proposed demonstration not begin until Oregon has more fully

developed the expanded managed care infrastructure

(e.g., until it has executed provider contracts sufficient to cover projected new enrollees) (238).

Timeline and Plans for Delivery System

Development of the delivery system would be a

gradual process. As of November 1991, OMAP had

entered into preliminary negotiations with prepaid

providers (252). PHP contract negotiations for the

entirety of the proposed prepaid system, however,

are not anticipated to be complete until the end of the

second year of the demonstration (table 4- 11) (177).

The original deadline date for contract applications

was February 7, 1992, but this has been changed to

2 weeks after approval by the Health Care Financing

Administration (HCFA) of the State’s request for

waivers (213). Awards of the first round of contracts,

originally scheduled to occur between May 18 and

June 15, 1992, have been delayed on a month-tomonth basis pending HCFA approval (256).

OMAP requested that all providers interested in

participating submit a nonbinding letter of intent to

participate by February 7, 1992 (256). Based on

letters of intent received as of February 12, 1992,

OMAP estimated a capacity to serve 190,000

enrollees through prepaid plans at program startup

(212). Actual capacity cannot be predicted until

OMAP has reviewed the full applications, accounted

for any duplicate counts of primary care physicians

(e.g., physicians associated with more than one

plan), and negotiated contracts. As of March 17,

1992, OMAP had not yet received any applications

(212). However, many providers who have expressed interest in participating reportedly have their

referral and subcontract mechanisms in place or are

well on their way to establishing them (212).

Underestimation of enrollment increases could

impede OMAP’s ability to enroll the anticipated

proportion of eligibles in PHPs, unless additional

capacity (i.e., more prepaid providers) could be

developed. The State assumes that the geographic

distribution of new eligibles would be the same as

the geographic distribution of current eligibles, with

the demonstration leading toa31 percent increase in

enrollment in each county during the first year

compared with the expected enrollment without the

demonstration (182). OMAP officials claim that

development of additional capacity in the ninecounty area where prepaid plans have already

enrolled the majority of AFDC patients-and where

‘g Thirty days if changes are due to technical amendments; 60 if they are due to legislative changes in the benefit package (174).

IXI ms es~[e is k~ on plans’ indication of the n-r of primaq care physicians that they would have available to serve Medictid enrollees,

using a ratio of one primary care physician per 1,200 enrollees or fraction thereof (175,212).
102 . Evaluation of the Oregon Medicaid Proposal

the bulk of the newly eligible population would

reside-would be less problematic than in some of

the outlying areas where delivery has been strictly

FFS to date (212).

Distribution of PHP Enrollees

by Eligibility Category

PHPs that attract a greater proportion of high-cost

patients would be at a financial disadvantage compared with those that attracted lower cost patients, a

phenomenon known as “adverse selection.” To

help protect PHPs from adverse selection, OMAP

would:

Develop a separate cavitation rate for each of

four eligibility “categories,” to reflect average

differences in cost between patients in each

category (see above) (175);

Require each PHP to accept any enrollee that

selects it, regardless of eligibility category

(175);

Adjust cavitation rates for certain “predictable” events (e.g., pregnancy) (175); and

Provide stop-loss insurance for other costoutlier patients (e.g., in the event of costly

catastrophic conditions that cause costs per

patient to exceed a predetermined threshold)

(177).

At least in the early stages of the demonstration,

the inability of providers to predict the distribution

of their enrollees by eligibility category may affect

PHPs’ ability to budget and subcontract for specific

services, which could in turn have an effect on

beneficiary access and quality of services provided.

The issue of distribution of enrollees across eligibility groups is not unique to Oregon. However,

because existing prepaid providers’ experience is

limited to AFDC enrollees under the current benefit

package, and because proposed cavitation rates are

calculated for nontraditional eligibility categories,

the level of uncertainty for new prepaid providers in

Oregon is likely to be greater than it would be under

a more traditional Medicaid managed care demonstration. To assist providers in anticipating the

distribution of their own enrollment, OMAP has sent

prospective providers lists of anticipated eligibles by

rate category and geographic location (212).

Reimbursement Changes

A major selling point of the demonstration to

providers in the State has been the promise of

enhanced reimbursement (177). There is little question that aggregate Medicaid payments to health care

providers in Oregon would increase under the

proposed demonstration, but whether individual

providers would see a net increase in Medicaid

revenue after costs is unclear. In both the prepaid and

FFS parts of the proposed system, providers are

expected to experience costly increases in administrative responsibilities. They may also be providing

more services, or services to more people. Most

providers in the managed FFS system would not

receive payment rate increases, although expanded

eligibility may reduce some of the existing uncompensated care burden.

Providers in Oregon are likely to experience

changes in their gross Medicaid revenues due to

increases in and redistribution of the eligible population. It can be assumed that, under the proposed

demonstration, some providers who currently see

Medicaid patients would lose these patients to other

providers due to unwillingness or inability to

participate as PHPs or subcontractors. This phenomenon is common to any shift from unrestricted FFS

to prepaid managed care. At the same time, many

providers who currently participate (as well as some

who do not) are likely to maintain or increase their

Medicaid caseload under the demonstration due to

expanded eligibility and redistribution of eligibles

between providers. However, increased caseloads

would only bring increased net revenues if: 1) they

displaced current uncompensated care losses, and/or

2) payment rates under the demonstration were

greater on average than current reimbursement rates.

Case-Managed FFS System

Payment rates for specific services in the casemanaged FFS system would not increase. Most

providers in the case-managed FFS system would

continue to be paid according to prevailing Medicaid

rates, many of which have been frozen or reduced for

the current biennium (see table 4-10).61 The only

reimbursement enhancements in the case-managed

61 F= for ~hy~i~~ ~d ~~other categol-i~ of providem wme fro~n for the 1991-93 biennium. OMAP d~s not intend to ck~e the~ FFs

rates under the demonstration (212). A few categories of providers received CPI (consumer price index) increases in their FFS rates. Hospitals paid on

a DRG basis have seen an increase in reimbursement for inpatient care as a resuh of a recent out-of-court settlement of a lawsuit brought against the

State (see ch. 2). Hospital outpatient reimbursement was reduced from 65 to 59 percent of costs for the 1991-93 biennium. Pharmacies will see a

cost-of-goods update twice monthly, but the dispensing fee has been frozen. Dentists received increases for certain procedures (212).
Chapter 4--Implications for Health Care Providers ● 103

FFS system would be: 1) the additional $3 per

enrollee per month for primary care case managers,

and 2) any additional reimbursement realized as a

result of new coverage for services previously

provided, or patients previously seen, free of charge.

For sole providers in areas with sparse population

and many newly insured persons, expanded eligibility may mean de facto increases in revenue.

OMAP's decision not to extend reimbursement

rate increases to the FFS portion of the delivery

system represents a conscious effort to move more

providers into the prepaid arena (212). If they

succeed in achieving and maintaining a statewide

prepaid delivery system, the lack of payment increases for FFS providers would no longer be an

issue. However, 25 percent of the Medicaid population is anticipated to be under case-managed FFS at

program steady state. This 25 percent would be

relatively concentrated in the more remote rural

counties where OMAP is not aggressively targeting

prepaid contracts. Assuming that the demonstration

would entail a 31 percent increase in enrollment in

each of these counties, lack of reimbursement rate

increases could have negative implications for

provider participation in FFS and, hence, beneficiary

access to care in those areas if providers were not

willing to accept additional Medicaid patients at

prevailing rates. An official of the Oregon Medical

Association recently characterized current FFS reimbursement rates as ‘‘woefully inadequate, ’ and

suggested that the Oregon demonstration would

‘‘penalize’ rural physicians by not extending to

them enhanced reimbursements (30). It is not clear

how much of an incentive the additional $3 case

management fee would be to participation by

PCCMs.

Prepaid System

Estimated cavitation rates appear to be roughly

comparable to those currently offered to prepaid

Medicaid providers (table 4-14). A true comparison

is difficult, however, because the rates reflect a

demographically dissimilar population, a significantly different benefit package, and a new ratesetting methodology. Current cavitation rates for

PCOs, which are based on Medicaid FFS-equivalent

costs for a similar population, range from $30.16 to

$37.00 per month for AFDC clients.62 For the most

comparable eligibility category under the proposed

system (non-general assistance clients with incomes

below 100 percent of the FPL), estimated PCO rates

for basic services63 range from $36.59 to $44.42 per

month ($32.59 to $40.42 per month if one excludes

the $4 administrative allowance)64 (table 4-14).

Current prepaid contractors who plan to participate under the proposed system can make a rough

comparison between current and proposed rates for

certain services and patients (e.g., those services and

patients for which they have previously received

capitated reimbursement). Both new and existing

providers, however, are likely to have greater

difficulty anticipating the costs of other patients

(e.g., general assistance and PLM clients). The

extent to which the new rates would represent

increases in reimbursement to PHPs would depend

on a number of factors, including:

●

●

●

●

The extent to which PHPs are able to cut costs

by curtailing the provision of noncovered

services or through other means,

The extent to which their current uncompensated care load is displaced by newly covered

patients or services,

The extent to which cavitation rates cover

actual costs of patient care, and

The extent to which new rates adequately

compensate for any increased administrative

tasks they must assume under the demonstration.

For subcontractors in the prepaid system (e.g.,

physician specialists, hospitals, providers of ancillary services), higher payment would depend on the

ability of these providers to negotiate such rates with

prepaid plans. There are no floors or other guidelines

for subcontractor rate negotiation. 65 Under the

current managed care system in Oregon, hospitals

that provide outpatient services to Medicaid patients

under subcontract to PCOs have generally been paid

at rates equivalent to those they could expect if they

were paid directly by OMAP (52). This practice,

62 mere is n. administrative allowance for prepaid providers under the current system.

63 See table 4-13 for a description of PCO basic WXVi@S.

64 ~ese fiWes reflwt the ~thhol~nce for tie matefity we reins~nce pool, but tiey do not reflect any applicable stop-loss iIISUHIIICe pmfnillm

deductions.

65 me proposed C.apitation rates reflect newly calculated ‘‘reasonable cost’ for subcontracted services (e.g., hospital services, home health services,

pharmacy services); however, OMAP has not established a policy whereby PHPs would be required to reimburse their subcontractors at these levels.
104 ● Evaluation of the Oregon Medicaid Proposal

Table 4-14--Capitation Rates for Prepaid Health Providers in Oregon:

Current and Proposed Benefit Packagesa

Monthly capitation rates as of October 7, 1991 (AFDC only)a

Fully capitated health plan (FCHP)--Kaiser Permanence, Northwest Region:

$84.16 to $98.54

Physician care organizations (PCOs): b

$30.16 to $37.00

Proposed monthly capitation rates under the demonstration for State fiscal year 1993, including administrative allowance: c

Ranged

Eligibility category: e FCHP PCO

Ail eligibles with incomes under the Federal poverty level (FPL)

except general assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $109.32 to $129.81 $36.59 to $44.42

Poverty level medical (PLM) adults with income

100 to 133% of FPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $603.49 to $701.10 $234.87 to $293.40

PLM children (i.e., less than 6 years of age) with income 100 to

133% of FPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $180.64 to $209.67 $47.16 to $58.78

General assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $259.03 to -$287.34 $52.91 to $63.14

ABBREVIATIONS: AFDC-Aidto Families with Dependent Children; FCHP-fullycapitated health plan; PCO - physician careorganizaton (partially cavitated

health plan).

a Although presented side by s.~e in this table, current and proposed cavitation rates are not directly comparable because they were Cahdatad from different

data sets and represent significantly different benefit packages. There is no administrative allowance in the current system.

b Rates in~~e bsic services only (physician, lab, x-ray, early and periodic screening, diagnosis, and treatment Pm9r@.

c Cavitation rates ~ ~tirnated by @opers & Lybranct using a mixture of private and Medicaid claims databases (see ref. 40). They refl~t FCHP ~ver~

services (including all optional services) and PCO basic services (see table 4-12) for lines 1 through 567 on the prioritized list of health services. The rates

in this table do not reflect applicable premium deductions for: 1) maternity and newborn cases, or 2) stop-loss protection. They do include a 6 percent

administrative allowance for FCHP services and a $4 per enrollee administrative allowance for PCO services.

d Represents range among the five different geographic are= for which OMAp h= ca~ulated ~parate cavitation rates (see text).

SOURCES: State of Oregon, Department of Human Resources, Office of Medical Assistance Programs, Prepaid Hea/th P/an Request for &/ic@ions

A&itional Information (Salem, OR: OMAP, Feb. 7, 1992); Coopers& Lybrand, &sgon MedibaidBasic Health Services Program: Cakwlation of

Per Cap”ta Costs Report(San Francisco, CA: Coopers& Lybrand, May 1, 1991); B. Terhaar, Operations Project Manager, Prioritized Health Care

Systems, Office of Medical Assistance Programs, Oregon Department of Human Resources, Salem, OR, personal communication, Dec. 4, 1991;

L. Read, Director, Prioritized Health Care Systems, Office of Medical Assistance Programs, Oregon Department of Human Resources, Salem,

OR, letter to E.J. Power, Office of T=hnology Assessment, Mar. 4, 1992.

however, is negotiated by the plan and the hospital

rather than the result of a formal policy decision by

OMAP (212).

Another potential issue for PCOs under the

demonstration is the ability of OMAP to measure

savings for noncapitated services due to PCO case

management. Under the proposed plan, PCOs would

receive a percentage of any savings achieved

through reduced utilization of covered noncapitated

hospital outpatient, hospital inpatient, and prescription drug services, measured against predetermined

target costs for an actuarially equivalent FFS population (see above) (177). In other States, the ability

to perpetuate such incentives in partial cavitation

arrangements has been hampered by erosion of the

FFS base against which actual utilization is measured (143). This problem might be of particular

concern in Oregon, because by the time the demonstration is at steady state, the State intends to have all

eligibles enrolled in some form of managed care.

Also, measurement of total savings must be detailed

enough to discount savings from service prioritization. Under the current system, savings are calculated by comparing utilization of broad service

categories. OMAP claims that, although difficult,

such a comparison is actuarially feasible, and that

the primary purpose of such a mechanism-to

provide an incentive for prepaid providers to control

costs—would still be served (212).

Impact of the Prioritized List

Implementation of the prioritized list of services,

by design, is likely to influence the way physicians

and other health care practitioners diagnose and treat

their Medicaid patients. The impact of the list may

differ depending on the delivery system in which the

practitioner operates.

To get a better sense of how clinical practice

might be affected by the list, OTA had several

physicians evaluate the list in light of their own

clinical experience. The contractors’ findings, presented in more detail in chapter 3, include concerns

regarding:
Chapter 4--Implications for Health Care Providers ● 105

The clinical appropriateness of ranking certain

CT pairs either above or below the line,

Dissatisfaction with the use of broadly defined

service categories in the prioritization process,

and

The inadequacy of the list at valuing the relative

effectiveness of specific treatments for certain

patient subpopulations.

If physicians serving Medicaid patients under the

demonstration share these concerns and feel the list

either prevents them from providing appropriate or

necessary care or forces them to provide alternative

treatments they feel are less appropriate, they may

respond by attempting to code claims or encounter

data forms for potentially uncovered conditions into

alternative CT pairs (see ch. 3). If physicians or other

health care providers are unable or unwilling to code

conditions into alternative CT pairs, they might

either deny treatment or choose to absorb the cost of

providing that treatment themselves.

According to the clinical contractor evaluations

and OTA’s own analyses of list coding, there appear

to be many opportunities for alternative coding of

below-the-line conditions into covered CT pairs. If

alternative coding is more extensive than anticipated

in the cost estimates (see ch. 6), savings from

prioritization may not be as great as anticipated.

Noncovered services range from inexpensive treatments such as elastic bandages and splints for strains

and sprains to extremely costly treatments such as

liver transplants for alcoholic cirrhosis of the liver

(see ch. 3).66

List Interpretation and Coding Issues

The ability of providers and OMAP to interpret

coding used in the list has implications for program

evaluation and costs, provider reimbursement and

financial risk, and beneficiary access to specific

services. 67 In completing claims and encounter data

forms, providers would not indicate the CT pair into

which they felt it appropriate to classify a patient.

Forms would be completed and coded much as they

are now, using ICD-9-CM68 diagnostic and CPT-469

procedure codes (212). Based on this information,

OMAP would decide whether or not to pay a claim

or, in the case of encounter data, would classify

encounters as either ‘‘covered’ or ‘‘noncovered’

services for purposes of program evaluation and

determination of stop-loss thresholds or PCO incentive payments (88,212).

Since September 1989, OMAP has been upgrading its claims and data processing capabilities (212).

As of the end of January 1992, however, OMAP

officials had not yet finalized a strategy for processing FFS claims against the list (212). At that time,

they were reportedly considering developing a

computer program that would focus primarily on

below-the-line CT pairs rather than one that would

categorize each paid claim by CT pair (212).

Whether submitting FFS claims or providing

OMAP with detailed encounter data, providers

would need to have an intimate understanding of list

coding. Providers may also need to change the way

they code claims in order to more clearly associate

specific diagnoses with specific treatments. There

are a number of reasons why providers may have

difficulty interpreting the list and coding their claims

or encounter data accordingly.

First, numerous coding duplications on the list

(many of them appropriate, others apparently unintentional) could lead providers to misinterpret the

scope of conditions or treatments included in CT

pairs, which could in turn influence their decision as

to whether or not to treat the patient. The list

contains many ICD-9-CM code duplications, with

some codes appearing in five or more CT pairs.

overall, 291 of 709 CT pairs contain at least one

diagnosis code that is repeated in at least one other

CT pair.

Second, the distinction between primary and

secondary conditions in certain CT pairs is vague

and could be misinterpreted by physicians. For

example, CT pair 708 reads ‘‘end-stage HIV70

disease-medical therapy,” and lists the full range

of medical therapy CPT-4 codes. According to the

66 CoSt ~S~teS for tie dem~~~ti~n ~mme tit a s~ ~fion of ~low-~e.l~e servi~s wotid still be provided, but it is &fCd? tO fLRWSS

whether these estimates are realistic. See ch. 6 for a detailed discussion of how demonstration costs were estimated and how the assumptions may affect

providers in the FFS and prepaid delivery systems.

67 For a gene~ discussion of program evaluation issues, see ch. 8.

~ IntermtioM/ Classification o~Diseases, 9th l?ditiou ClfiCd Modification (316).

69 Cment pI-O~A Terminology (CPT) codes, 4th revision (7a).

m~uman imrnunodeficiency virus.
106 . Evaluation of the Oregon Medicaid Proposal

Oregon Health Services Commission (HSC), the

intent was only to deny treatment for the primary

diagnosis (i.e., to deny payment for azidothymidine

(AZT) or any other approved drug for the treatment

of HIV infection) (1 18). However, physicians might

interpret the CT pair to mean treatment for a number

of HIV-related conditions that are in fact included in

CT pairs above the line.

Third, it remains unclear how OMAP intends to

make noncodable distinctions (e.g., treatable vs.

nontreatable cancer, end-stage HIV disease) when

processing claims. As of late January 1992, both the

HSC and officials within OMAP indicated that they

were considering leaving these distinctions to the

discretion of the physician (77). While such a

strategy would increase physicians’ autonomy in

making these distinctions, it could also decrease

OMAP’s ability to achieve anticipated cost savings

if physicians chose to code these patients liberally

into covered CT pairs.

Finally, hospital claims forms typically contain

multiple diagnosis and treatment codes. To accurately determine which procedures were performed

for which diagnoses-a determination that could

ultimately affect coverage--claims forms and encounter data requirements may have to be refined.

Ambiguities such as these suggest that development of extensive and detailed CT pair assignment

guidelines is at least as important as correcting

specific coding problems on the prioritized list. As

of the end of January 1992, OMAP had just begun

the process of revising the existing FFS provider

guidelines to reflect the new benefit package (77,212).

According to the OMAP official responsible for

coordinating revision efforts, the strategy will be to

focus on services that are not covered and to clarify

potential ambiguities with specific examples (77).71

Differences by Delivery System

Because they face denial of payment on a

claim-by-claim basis, providers in the case-managed

FFS system would be most directly affected by

implementation of the prioritized list. For providers

in the prepaid system, the effect could be dampened

by lack of immediate claims oversight. For example,

in an “independent practice association’ ‘-type plan

that subcontracts with physicians and does not

internally monitor covered vs. noncovered services,

physicians maybe at greater liberty to treat below-theline conditions. On the other hand, some PHPs may

adopt strict internal policies to deny payment for (or

provision of) noncovered services. Whether PHI%

promote or resist such policies could depend on a

number of factors, including: 1) the extent to which

providers believe that cutting below-the-line services can save them money, 2) the extent to which

OMAP monitors line-specific utilization of PHP

enrollees, and 3) providers’ belief that certain

noncovered services are indeed medically necessary

and should be performed.

Kaiser Permanente-Northwest Region, a large

HMO that has indicated an intent to participate

under the demonstration, has indicated that, while it

might adopt policies to deny services for certain

below-the-line conditions (e.g., specific surgical

treatments), it might continue to provide others--

either out of moral obligation or because certain

services (e.g., splints and bandages for sprains

supplied during an office visit) would be practically

impossible to monitor (100). Other PHPs—

especially those that lack the financial resources or

will to absorb costs associated with noncovered

Medicaid services-might deny below-the-line treatments to a greater extent than larger providers.

Potential variability among providers in adherence to the prioritized list as a benefits package

could lead to inequalities in beneficiary access to

services for specific conditions. Indeed, some level

of inequality in access exists already between FFS

and PHP Medicaid patients. Kaiser Permanence

claims that it routinely provides hospice and adult

preventive services to its current Oregon Medicaid

enrollees, even though these are not covered benefits

under the current Medicaid program (100). An

evaluation of cost savings in Oregon’s PHP program

between 1985 and 1989 found PHP enrollees’

overall utilization of hospital (both inpatient and

outpatient) and prescription drug services to be

lower than that for an equivalent FFS population

(41). To term these differences “inequalities”

would be to ignore one of the original goals of the

PHP program: to reduce utilization of unnecessary

and costly services through managed care. Decreased inpatient utilization in the current PHP

system is defined broadly and attributed to better

71 Fore~p]e, tie m~c~-s@c~provider@ de~es might clarifytha~ although a&,gressive treatment fortermimd C~eriS nOt COVer~ a !W.@td

procedure to remove a bowel obstruction ina terminal cancer patient orpalliativechemotherapy would be covered (ifOMAP wem to adopt such a policy).
Chapter 4--Implications for Health Care Providers ● 107

management of care by primary care physicians

(41). Broadly defined differences in beneficiaries’

utilization of services, however, fail to capture

service- and condition-specific differences in access

that could result from inconsistencies in adherence

to the benefit package.

Although the list may have a more direct financial

impact on FFS providers, its implementation could

also affect providers in the prepaid system, who

would be required to submit detailed encounter data

in a format similar to FFS claims (175). Understanding the mechanics of the list would also be important

for PHPs if they wanted to monitor the extent to

which their subcontractors (e.g., hospitals) provide

noncovered services. OMAP has no plans to develop

specific tools to aid prepaid providers in their

internal claims or service management (212). Each

prepaid provider would presumably be responsible

for interpreting and implementing the list within its

own service structure.

Implications of Future Changes

in the Benefit Package

If, in the event of future budgetary constraints, the

coverage line moved above 587, implications for

providers would also be likely to vary by delivery

system. In the FFS system, providers would be

denied direct payment for specific services. In the

prepaid system, the cavitation rates would decrease,

with a corresponding decrease in service liability. If

PHPs were unwilling and unable to make up for

possible rate decreases, either by cutting additional

services or through various forms of crosssubsidization, they might opt out of the program.

Providers in the State have expressed reasonable

satisfaction to date with the benefit package and

proposed cavitation rates at line 587. As in any

prepaid health care environment, however, providers may opt out if they feel the rates are too low. It

is impossible to predict the threshold (either in terms

of the rate or the benefit package) below which

providers would no longer be willing or able to

participate in the Oregon demonstration.

Data Collection Under the Demonstration:

Issues for Providers

Collection of detailed encounter data from PHPs

would be critical to evaluation of the effects of

service prioritization and managed care expansions

on program costs, beneficiary access to care, quality

of care provided, and any relevant health outcomes

measures.

72 It would also help risk-based providers

in their internal financial management by enabling

them to track both patient- and service-specific

utilization and costs. Documenting patient-specific

utilization would enable providers to avail themselves of stop-loss protections offered by the State.

Efforts to track service-specific costs would enable

providers to develop their own cost-containment

strategies.

In late November 1991, OMAP informed potential prepaid providers that they would be required to

submit detailed encounter data to OMAP for purposes of utilization monitoring and program evaluation (175). Encounter data would include the “patient’s name, Medicaid ID number, treating professional, date of service, diagnosis, services provided, and plan payment amount and would have

to be reported-preferably electronically-within

60 days of the date of service (175).

Because the proposed encounter data requirements are essentially the same as information

requirements on current FFS claims forms, new

prepaid providers who currently see patients in the

FFS system would not need to undergo major

adjustments to comply with encounter data collection requirements. For some existing prepaid providers, however, significant adjustment would be required. The inability of PHPs in the existing

managed care system to submit even the most basic

quarterly utilization data for Medicaid enrollees in a

consistent manner (310) is not encouraging. Nonetheless, most current prepaid providers have reportedly accepted the need for these requirements and

are willing to comply (212). At least one large

prepaid provider, however, has requested that OMAP

grant it a waiver from the specified encounter data

reporting requirements under the demonstration.

Kaiser Permanence objects to the requirement because it would entail the development of a new data

collection system and the reporting of confidential

patient information (19).

PHPs are expected to bear the cost of putting the

necessary data collection and utilization review

systems in place. The proposed cavitation rates

(table 4-14) reflect increased administrative costs

associated with data collection and other administrate See ch. 8 for a gener~ discussion of program evaluation issues.
108 ● Evaluation of the Oregon Medicaid Proposal

tive tasks, but OMAP acknowledges that the administrative allowances would probably only be sufficient to cover operational costs (212). OMAP

intends to have staff available to provide technical

assistance to PHPs to aid them in meeting data

collection and other administrative requirements

(177,212).

OMAP also intends to collect information from

primary care case managers and PHPs about what

noncovered services they provide to clients (175).

How they would accomplish this is unclear. If

providers felt that reporting the provision of noncovered services might result in either increases in

the benefit package or increases in their payment

rates, they might feel an incentive to overreport these

services. If, however, providers felt that such reporting might jeopardize their reimbursement in any

way (e.g., reduce cavitation rates or PCO incentive

payments), they might tend to underreport.

Overall Implications

for Provider Participation

To accommodate the almost twofold increase in

Medicaid enrollment under the demonstration, provider participation in both the prepaid and FFS

systems would have to increase. Although it is

impossible to predict with any certainty what

provider participation would be like under the

demonstration, factors that may influence participation deserve examination. These factors, which are

discussed throughout this chapter, are summarized

briefly here for the prepaid and case-managed FFS

delivery systems.

Prepaid System

Key factors in initial participation by prepaid

providers include attractiveness of payment rates,

level of commitment to providing care to poor

populations, capacity for increased caseloads, providers’ perceptions of the appropriateness or feasibility of implementing the prioritized list of services,

and the ability of providers to meet the terms of

prepaid contracts. Adequate long-term participation

would depend on additional factors, including the

ability of prepaid providers to: 1) control costs

through below-the-line exclusions and effective

patient management, 2) comply with the (not unreasonably) stringent standards of performance set

forth by OMAP, and 3) adapt to possible reductions

in cavitation rates mid-cycle. Participation of subcontractors would depend on their ability to negotiate

acceptable arrangements and rates with prepaid

plans.

PCOs in the current system have already established referral and subcontracting arrangements for

basic services; however, the vast majority of these

PCOs would be required to convert to FCHPs at

program startup, entailing development of new

subcontractual arrangements for inpatient and other

care not currently capitated for PCOs. As noted

earlier, OMAP has obtained letters of intent to

participate as FCHPs from many of these plans.

However, the plans’ abilities to shoulder increased

risk for patient care over the long term has yet to be

tested.

Case-Managed FFS System

In the case-managed FFS system, financial and

organizational incentives for provider participation

would not differ as greatly from the current system

as they would for prepaid providers. Furthermore,

the case-managed FFS system would be the primary

mode of service delivery only in the most rural parts

of the State, where the number of providers—

particularly secondary and tertiary care providers—

is already limited. Referral patterns, to the extent

that they exist at all, are ‘fixed’ by default and have

already been at least informally established. For

example, a primary care physician in a sole-hospital

area with only a limited number of geographically

accessible specialists has few options when it comes

to secondary or tertiary care referrals.

Providers in rural areas who have difficulty

maintaining adequate caseloads of charge-paying or

otherwise insured patients are likely to welcome the

opportunity to receive reimbursement for a larger

number of low-income patients. Nonetheless, the

additional responsibilities required of PCCMs (e.g.,

24-hour availability, preauthorization of all care)

could act as disincentives to participation if they are

perceived as burdensome by providers. The wide

geographic dispersion of patients and limited availability of secondary and tertiary care providers may

present an additional challenge to PCCMs in establishing adequate referral networks for newly assigned patients. In addition, rural physicians maybe

less able than their urban counterparts to take on

additional administrative responsibilities because

they are less likely to be able to afford support staff

to assist them in these functions.
Chapter 4--Implications for Health Care Providers . 109

One possible advantage of case-managed over

unrestricted FFS health care delivery is that it can

increase beneficiary access to care by providing a

guaranteed point of contact for patients (17,143), In

several other States where case-managed FFS systems have been implemented, increased access (e.g.,

more specialty care referrals) has also led to

increased per patient costs because these systems

were not as successful in changing physician practice patterns as those that put physicians at risk

(143)0

Experience in other States also indicates that

case-managed FFS and PCO systems have not

always been successful at recruiting providers in

underserved areas (143). A 1987 evaluation of

Medicaid case-managed FFS programs in six States

found that achieving adequate participation by

primary care practitioners was problematic and slow

and had the net effect of limiting the States’ ability

to achieve anticipated case management savings

(17). The shortage of health professionals in rural

areas is a nationwide problem, however, and not one

that the Oregon proposal set out to address.

Understanding the current extent of provider

participation in rural areas of Oregon would be

helpful in assessing the potential impact of the

proposed demonstration in the case-managed FFS

delivery system. Unfortunately, little is known about

the extent to which providers currently participate in

the Medicaid FFS system. 73 An advisory group

established by OMAP to guide case-managed FFS

implementation met for the frost time in early

December (212).

Implementation of the prioritized list may also

present problems in case-managed FFS, at least at

the outset. OMAP has indicated a commitment to

minimizing the “hassle factor” for providers by

keeping as many as possible of the burdens of list

complexity transparent to providers and by working

collaboratively with providers in the case-managed

FFS system (212). However, the difficulties inherent

in implementing the prioritized list of services in the

FFS system may increase the “hassle factor” in

claims payment somewhat during the first year or

two of the demonstration.

Issues for Selected Providers

Hospitals

Under the proposed demonstration, both the

amount and the immediate source of Medicaid

reimbursement are likely to change for the majority

of hospitals. Perhaps the most pronounced change

would be the offset of current uncompensated care

costs due to expanded eligibility. Hospital reimbursement would also change due to addition and

elimination of services from the benefit package,

changes in reimbursement rates, and reductions in

inpatient and outpatient services utilization due to

the expansion of managed care. The net balance of

these changes for hospitals, however, is impossible

to predict at this time.

Many hospitals would shift from State-set DRG

rates to rates negotiated with prepaid providers.

Thirty hospitals74 would receive most of their

payment for inpatient and outpatient care from

FCHPs. An additional31 hospitals in the PCO areas

would negotiate payment for certain outpatient

hospital services rendered to PCO enrollees with the

PCOs, but they would continue to receive the

prevailing payment rates for inpatient services

(either DRG- or cost-based) directly from OMAP.75

Hospitals may find it difficult to anticipate the

magnitude of expected Medicaid revenues for a

number of reasons. First, managed care may reduce

hospital utilization. Indeed, the State has projected

that, purely as a result of managed care incentives,

nonmaternity/newborn-related inpatient hospital costs

would decrease by 25 percent for FCHP enrollees,

13 percent for PCO enrollees, and 9 percent for

case-managed FFS enrollees (178). These projections are based on its reported experience with the

current PHP program and cost studies done by

Coopers & Lybrand. In testimony presented before

Congress in September 1991, the Congressional

Budget Office and GAO questioned the validity of

these estimates (237,238).

73 A ~omprehaS1ve S~dy ofp- C.ae practitioner availabfi~ fi ~ch of the S@te’s 125 health semi~ m~s tis Hendy been completed by the

Oregon OffIee of Health Policy. The results of this study should help determine whether there is sufficient capacity in the system to handle the estimated

120,000 newly eligible Medicaid enrollees.

74 &cludes the ~. ~Sm Fou&tion hospi~, which tie ~~dy ~der fu~ c~i~tion ~qemen~ ~~ Medicaid for patients tXllVkd ill tie

Kaiser-Permanente-Northwest Region HMO.

75 ~rd@ t. o~, appro~~ly one-~d of oupatient s~i~s reimbursement for~o enrokes is subject to negotiation. me req ~~

thirds are paid on an FFS basis by OMAP (212).
110 . Evaluation of the Oregon Medicaid Proposal

Second, although cavitation rates reflect the

‘‘reasonable cost’ of hospital inpatient and outpatient services for covered CT pairs, OMAP has not

established a floor for FCHPs’ hospital reimbursement rates. Hospitals recently succeeded in obtaining increased Medicaid reimbursement from the

State as the result of a lawsuit filed under Boren

Amendment provisions (156,157) (see ch. 2)-a fact

that might put hospitals in a stronger position to

guard themselves against inadequate reimbursement

from PHPs.

As noted earlier in this chapter, financial data

indicate that a significant number of Oregon hospitals--

particularly small rural hospitals-are already in

financial distress. A number of these hospitals are

currently exempt from prospective payment and

instead receive facility-specific, cost-based reimbursement (see table 4-9). Under the demonstration,

some of these hospitals would lose these statutory

protections because, according to State officials, the

statutes have been interpreted as applying only when

payments are made directly by the State and are not

likely to be upheld for hospitals receiving payment

from PHPs (52,134). If the demonstration is approved, payments to these rural hospitals should be

monitored closely.

For hospitals that continue to be reimbursed on a

DRG basis, implementation of the prioritized list

poses an additional reimbursement problem because

DRGs do not adequately distinguish between covered and noncovered services provided during the

course of a single hospital stay. For example, for a

patient who receives treatment for several conditions during the same hospital stay (e.g., intravenous

AZT for HIV infection and intravenous antibiotics

for pneumocyctis carinii pneumonia), it may be

impossible to determine from the hospital claim

form which treatment is being provided for which

diagnosis.

Of particular concern is the ability of the payment

system to distinguish between diagnosis- and treatmentrelated inpatient charges. Oregon has stated that,

under the demonstration, all Medicaid patients are

entitled to a full diagnosis of their condition, even if

treatment for that condition is not covered (177).

Under the current system, however, diagnostic and

treatment charges are bundled into a single diagnosisrelated payment. If a treatment for a covered

condition is incorrectly attributed to a noncovered

condition on the basis of claims coding, payment

may be inappropriately denied. There are a number

of below-the-line conditions where extensive inpatient diagnostic procedures might be required to

confirm the diagnosis (e.g., exploratory surgery or

magnetic resonance imaging (MRI) for certain

cancers). If hospitals were denied payment for these

procedures, the financial consequences could be

serious. As of January 1992, Oregon had not yet

developed policies to address payment of diagnostic

services provided in an inpatient hospital setting

where treatment was also provided for a noncovered

condition (212).

Publicly Funded Primary Care Providers

Publicly funded primary care clinics (e.g., FQHCs,

RHCs, county and local health departments) have

played a major role to date in serving Medicaid and

uninsured patients in Oregon and throughout the

country. Federal, State, and local subsidies have

supported them in this role, and payments from

Medicaid often represent a substantial proportion of

their budgets. If demonstration enrollment increases

took place without any changes in the delivery

system, most of these providers would probably see

increases in their Medicaid revenues due to expanded eligibility. As proposed, however, the demonstration could end up having a negative rather than

a positive financial impact on some of these clinics.

Like other providers, they would be forced either to

assume risk as primary contractors, negotiate with

other prepaid plans as subcontractors, or serve an

increasingly limited number of Medicaid patients in

the FFS system.

A state law passed in 199176 would guarantee a

limited role for publicly funded clinics under the

proposed system by requiring prepaid providers to

subcontract with them for point-of-contact services

for immunizations, sexually transmitted diseases,

and other communicable diseases. Their ability to

participate as full-scope primary care providers,

however, is less certain. Publicly funded providers

are likely to have difficulty meeting requirements for

participation as primary contractors for a number of

reasons, the foremost of which is that they may be

less able than larger providers to assume full or

partial risk for patient care due to limited financial

resources.

Tfj Oregon Semte Bill 760, 1991.
Chapter 4--Implications for Health Care Providers ● 111

Federally Qualified Health Centers and Rural

Health Clinics—Implementation of the proposed

managed care expansions would have significant

implications for FQHCs and RHCs. All 11 FQHCs

(table 4-3) and 14 of the 17 RHCS

77 are in areas where

OMAP has indicated it would implement prepaid

health care delivery (177,197). The 6 FQHCs in

areas where FCHPs would be mandatory represent

a total of 19 individual clinic sites, serving an

estimated 65,586 unduplicated persons (both Medicaid and non-Medicaid) in FY 1989.78 Four of these

FQHCs operate as PCOs in the current managed care

system (see table 4-3), but they would have to

convert to FCHP status in order to maintain primary

contracts under the demonstration. The 5 FQHCs in

areas where PCOs would be implemented represent

7 individual clinic sites that served at least 8,321

unduplicated persons in 1989.79

OBRA-89 (Public Law 101-239) mandated that

FQHCs receive facility-specific cost-based reimbursement from the State for services they provide

to Medicaid patients. Each clinic’s reimbursement

rate is determined by calculating the average cost per

patient encounter across all patients over the course

of a year. RHCs are entitled to the same type of

reimbursement under Public Law 95-210. The

Consolidated Omnibus Reconciliation Act of 1990

(OBRA-90) 80 reinforced OBRA-89 reimbursement

protections by mandating that FQHCs participating

in Medicaid prepaid delivery systems receive the

same payment per encounter to which they are

entitled when paid directly by the State. OBRA-90

also mandated that, whenever States require Medicaid patients to enroll in prepaid plans, at least one of

the plans available in any given area either be an

FQHC or subcontract with an FQHC for the

provision of primary care services.

Under the proposed demonstration, Oregon is

seeking a waiver from cost-based reimbursement

provisions for FQHCs and RHCs and from OBRA90 FQHC guaranteed access provisions (177,257).

These waivers would give the State greater latitude

in choosing prepaid contractors and would enable

OMAP to pay FQHCs and RHCs the same rates that

they would pay other providers under the demonstration. If these waivers are granted, the impact o n

FQHCs and RHCs in prepaid areas would depend on

a number of factors, including:

●

●

●

●

The ability of the clinics to: 1) assume either

full or partial risk for the care of their Medicaid

enrollees, or 2) negotiate successfully with

FCHPs and PCOs in their service area to act as

subcontractors for primary care services;

The extent to which the clinics currently

depend on Medicaid revenues;

The extent to which current sliding-scale patients in the clinics would be newly eligible

under the demonstration;81 and

How OMAP’s cavitation rates or rates negotiated with FCHPs under subcontract compare

with their actual costs.

If unable to obtain prepaid contracts, FQHCs and

RHCs might be able to continue serving Medicaid

patients under subcontract to other prepaid providers. OMAP would encourage but not require prepaid

providers to subcontract with these entities for

services other than immunizations and point-ofcontact services for sexually transmitted and other

communicable diseases (175). However, participation as subcontractors introduces further uncertainties regarding the adequacy of reimbursement,

because the proposed waiver of OBRA-89 and

OBRA-90 provisions would relieve OMAP of its

current obligation to reconcile differences between

subcontractor rates and FQHCs actual costs for

services.

In Oregon’s current prepaid system, 2 of the 11

FQHCs see patients under subcontract to a PCO.

Both are paid according to the PCO’s fee schedule

for all covered services, and both contend that their

average per-encounter reimbursement from the PCO

falls well below their FQHC entitled rate (219,259),

although OMAP has disputed this claim (213). To

comply with Federal law, OMAP intends to reconcile the difference between the amount paid by the

m FoU ~cs me in arm slated for FCHP implementation the r~ aining 10, in areas where OMAP intends to execute prepaid contracts.

78 cl~c-~ COWW He~& ~p~ment &d not r~ofi users ~ 1989 b~a~e it was not d~i~ted a.s an FQHC ~til October 1991 (261).

79 Two of ~ew five FQHCs ~d not repofi users for 1989. Swar &ta were not available for ~CS.

W ~bllc ~w lo~_508.”

8] FQHCS tit receive ~Pmt he~th center ~~my ~ less 1&ely to ~nefit from expand~ e@jbfl@ ~der the demonstration beCaUSe. many

of their patients may not meet the Federal Medicaid residency requirements and thus would not be eligible for coverage (259). See ch. 5 for furthex

discussion of eligibility issues.
112 ● Evaluation of the Oregon Medicaid Proposal

PCO and the amount each clinic would have

received for its services in the FFS system (212,259).

If unable to participate in the prepaid system, the

remaining option for FQHCs and RHCs would be to

serve as PCCMs for clients not enrolled in managed

care plans (estimated to be 15 to 20 percent of clients

in prepaid plan areas and 100 percent of clients in

counties with no prepaid plans). In the PCCM

system, FQHCs would continue to be reimbursed

according to OBRA-89 provisions (257). However,

the Oregon Primary Care Association and some of

its member clinics have expressed concern that,

should HCFA grant Oregon a blanket waiver from

cost-based reimbursement provisions, OMAP could

exercise this waiver in the case-managed FFS

delivery system as well (259,306).

OMAP has suggested that FQHC and RHC

reimbursement would be as high if not higher under

the demonstration (255). If this is the case, then the

only argument for waiving OBRA-89 and OBRA-90

provisions is an administrative one: it would simplify provider payment under the demonstration by

removing the need for facility-specific cost estimates and payment reconciliation. However, facilityspecific rates would still need to be determined for

FFS payment purposes unless a blanket waiver were

granted, and reconciliation could be accomplished

on an annual or semiannual basis to minimize the

administrative burden for OMAP.

The issue of FQHC and RHC reimbursement and

participation under the demonstration is critical

because, if the demonstration ended, these clinics

would need to resume their significant role as safety

net providers. For some clinics, loss of patients to

other prepaid providers under the demonstration

could mean significant losses in Medicaid revenues,

which currently account for over 30 percent of the

total operating budget at some sites (261). If losses

of existing Medicaid patients as well as some

currently indigent patients who would become

eligible under the demonstration bring the operating

volume of these clinics below a viable threshold,

their ability to serve the remaining indigent population (e.g., migrants and individuals with incomes

over 100 percent FPL but without insurance) could

be compromised.

This potential problem could be remedied through

year-end reconciliation by OMAP of differences

between FQHC rates and PHP rates paid to qualifying clinics, as it is in the current system. Alternatively, OMAP could require PHPs themselves to pay

the clinics’ actual costs. In addition, OMAP could

provide PHPs with stronger incentives or requirements to subcontract with publicly funded facilities.

County and Local Health Departments--County

and local health departments have also played a

major role in providing certain services (e.g., eligibility screening, immunizations, health screening,

maternity case management) to the Medicaid and

uninsured population in Oregon (212,252). The

ability of these and other publicly funded facilities

to participate under the demonstration could be

hampered by a number of factors.

First, budgetary retrenchment in the State could

lead to hard dollar losses for county health departments (CHDs) and other State-funded facilities in

the near future. Under Ballot Measure 5,82 Oregon’s

35 CHDs have seen and will probably continue to

see decreases in direct subsidy from the State that

could threaten their overall financial viability (259).

This could further limit their ability and willingness

to assume risk as prepaid providers in the proposed

system.

In the case-managed FFS system, CHDs would be

allowed to participate as PCCMs and be paid

according to OMAP’s prevailing FFS rates, provided they had the appropriate staff (i.e., physicians

and/or nurse practitioners) to assume case management responsibilities. However, CHDs are typically

not staffed or otherwise equipped to provide the full

range of core primary care services required of a

PCCM.

Several other issues may also present barriers to

participation of publicly funded clinics in the

proposed demonstration. First, their historical difficulty in recruiting and retaining physicians could

limit their ability to maintain a stable primary care

physician population, as required in the prepaid

contract. For example, many FQHCs are staffed by

physicians serving their obligations under the National Health Service Corps scholarship program

(273). The attrition rate of these physicians is high,

and FQHCs have difficulty competing with the

salaries and benefits available in other settings

(273).

82 See ch. z for a description of Oregon’s Ballot Measure 5.
Chapter 4--Implications for Health Care Providers ● 113

Second, a few clinics have expressed concern that

the public-private differential in the State capon tort

liability (an overall cap of $200,000 for public

agencies 83 and a $500,000 cap on noneconomic

damages for all other providers) will discourage

private entities from entering into patient care

arrangements with them in the prepaid system

(259,261). Because of Oregon’s joint and several

liability 84 statute, providers not protected by the

$200,000 overall cap could conceivably be vulnerable to unlimited economic liability for malpractice

cases in which they shared responsibility for patient

care with a publicly funded provider. It is not at all

clear how much of an issue this would be under the

proposed demonstration. Multnomah County Health

Department, an existing PCO subject to the $200,000

liability cap, has been able to circumvent this

problem, and it currently has referral arrangements

with several hospitals (both public and private) in its

service area (213,259). At the same time, Clackamas

County Health Department, an FQHC that would

like to participate as a PHP in the proposed system,

claims that the sole hospital in its service area

refuses to enter into arrangements and is citing

liability concerns as the reason (261).

Third, some clinics have expressed concern that,

even if able to negotiate prepaid contracts, they may

be affected by “adverse selection” in spite of the

preventive measures taken by OMAP (259,261).

These clinics fear that they may attract a disproportionate number of ‘‘high-risk’ patients (e.g., migrant farm workers, homeless patients, drug abusers)

within a given eligibility category, either because

patients find it easier to access services in these

settings or because these settings provide services

not available elsewhere (e.g., interpreters) (153,259).

This potential problem could be closely monitored

by both the clinics and OMAP. If stop-loss and other

protections proved inadequate, problems could be

addressed through rate adjustment.

Finally, clinics are concerned that, once enrolled

with a prepaid health plan, patients may still show up

at their doors for care, either because they are

accustomed to accessing services there, because

they feel it is more convenient, or because they have

had difficulty obtaining an appointment with a

physician in their prepaid plan (259,261). Because

publicly funded clinics are required by State and/or

Federal law to see all patients regardless of insurance status or ability to pay, they fear they could be

forced to see these patients but be unable to demand

reimbursement from the patient’s prepaid plan for

services provided (259,261).85 Again, it is not clear

how much of a problem this would be under the

demonstration, but it is an issue that may deserve

some monitoring should the program go into effect.

Alternative Providers of Care

In Oregon’s FFS Medicaid system, enrollees who

prefer nontraditional sources of care have been able

to seek medically necessary care from any provider

recognized by OMAP. Oregon has been more liberal

than most other State Medicaid programs in allowing FFS reimbursement for services of nontraditional providers (see table 4-15). All States are

required to reimburse for the services of doctors of

osteopathy 86 and for pediatric and family nurse

practitioners under Medicaid.87 Under the proposed

demonstration, OMAP would continue direct reimbursement for medical services delivered by these

and other alternative providers in the case-managed

FFS system as long as those services were preauthorized by the PCCMs. In addition, OMAP would allow

nurse practitioners and physician assistants to serve

as PCCMs.

Expansion of physician-controlled managed care

systems, however, would probably result in reduced

opportunities for participation by certain nontraditional providers of care (e.g., chiropractors, naturopaths). This phenomenon is characteristic of managed

care systems generally. Some alternative provider

83 ~C1udeS ~W~, m~cip~, and State facfities (including Oregon Health Sciences University), but nOt fd=~y fid~ c~cs Wfl~Y. For

example, Multnomah County Health Department is an FQHC, but it is subject to the public agency cap by virtue of its county funding status (259).

84 jo~t ~d sevm~ liabill~ refe~ to tie ability of a plaintiff to sue one or more parties for a tort dtie ri$$t of a Pl~~ to ~U~t be ‘tie

compensation from a single entity.

85 F~yp_ ~W1ce5 ~ tie exception. Under tie propo~d demo~tratio~ e~o]]~ wo~d tive urliv~al access tO thCSe Semices and FQHCS

would be paid on an FFS basis for providing them to any Medicaid patient.

86 ~tors ofo~teopa~y ~os) @cup appro~tely5 ~rcmtof tie to~ physici~popfition iII the United States (273). In general, State li~m~

boards recognize the DO degree as equivalent to the MD (aIlopathic) degree.

87 As of July 1, 1990, ~1 S@te5 were ~fi~ to provide dir~t Medicaid reimbur~ment for pediatric and ftily nurse practitioners (Public Law

101-239). Oregon had already exercised its option to do so prior to this time.
114 ● Evaluation of the Oregon Medicaid Proposal

Table 4-15-Coverage of Selected Optional Medicaid Services, Oregon vs. Other States, October 1,1989

Total number of Medicaid programs that

cover service (N = 56) Oregon

Categorically needy All Medicaid Categorically needy All Medicaid

Type of service onlya

eligibles onlya

eligibles

Podiatrist . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 32 — Yes

optometrist . . . . . . . . . . . . . . . . . . . . . . . . . . 16 36 — Yes

Chiropractor. . . . . . . . . . . . . . . . . . . . . . . . . . 8 21 — Yes

Other practitioner . . . . . . . . . . . . . . . . . . . . . 11 30 — Yes

Private duty nursing . . . . . . . . . . . . . . . . . . . 8 20 — Yes

Dental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 34 — Yes

Physical therapy. . . . . . . . . . . . . . . . . . . . . . 10 29 — Yes

Occupational therapy . . . . . . . . . . . . . . . . . . 5 23 — Yes

Speech/language/hearing . . . . . . . . . . . . . . 8 28 — Yes

Case management . . . . . . . . . . . . . . . . . . . . 6 25 No No

Respiratory care . . . . . . . . . . . . . . . . . . . . . . 3 6 — Yes

Personal care . . . . . . . . . . . . . . . . . . . . . . . . 7 19 — Yes

alnd~e~ag~,b~nd,ordiWbl~i~iv~ualSa@famflieSa~chfldrenwhomeetfinan~ale~gibflity requirementsforAidtoFarnilieswith D~~d@Chfldren,

Supplemental Security Income, or an optional State supplementary coverage population.

b ln~~es ~th ~tegoncally ne~y ad ~~~ally n~dy eligibl~. M~i~lly neq eligi~es are ag~, Mind, or disabi~ individuals or families and children

whose income is above the categorically needy eligibility limits but which, after deduction of expenses incurred for medical services covered under the

Medicaid program, falls within limits set by the State Medicaid program, permitting the individuals to become eligible for Medieaid. States are allowed to

establish separate coverage restrictions for medieally needy eligibles.

SOURCE: U.S. Department of Health and Human services, Health Care Finanang Administration, Office of Research and Demonstrations, Program

Statistkx:A.4edkare andMed&”dData Book, 1990, HCFAPub. No. 03314 (Washington, DC: U.S. Government Printing Office, March 1991), table

4-6.

groups have begun to organize themselves in anticipation of the managed care expansions. For example, chiropractors in Oregon have formed an independent practice association and have already entered into subcontracts with one or more of the

current prepaid Medicaid providers. 88 They have

also approached OMAP to discuss the possibility of

becoming a full-fledged PHP (320). Within the

prepaid system, however, participation of and access

to these and other practitioners (both physicians and

nonphysicians) would ultimately depend on the

referral policies and staffing preferences of individual PHPs.

SUMMARY OF CONCLUSIONS

Organizational and Financial Implications

Oregon anticipates that 75 percent of beneficiaries

under the demonstration would receive care on a

prepaid basis, while the remaining 25 percent would

receive case-managed FFS care. Although OMAP

has a good track record in the development and

management of prepaid managed care systems thus

far, with approximately 31 percent of all Medicaid

patients currently enrolled in prepaid plans, achieving the anticipated level of prepaid plan enrollment

and maintainingg it for the duration of the demonstration may be difficult. To qualify and remain viable,

prepaid providers would have to be able to control

costs through below-the-line exclusions and effective patient management, adapt to possible reductions in the benefit package and cavitation rates, and

comply with OMAP’s stringent standards of performance. Although letters of intent to participate

indicate the potential to achieve the anticipated

capacity, OMAP had not received any full applications as of March 1992.

Shifting from FFS to prepaid Medicaid would

result in redistribution of some patients among

providers, with some providers maintaining or

increasing their caseloads and others seeing a

decrease. If the demonstration were put into place,

the effects of this redistribution on the financial

viability of critical providers (e.g., publicly funded

primary care clinics) should be closely monitored.

To encourage providers’ support and participation

in the demonstration, Oregon promised them reimbursement increases. Reimbursement increases would

be focused on prepaid providers. The extent to which

individual providers would see a net increase in

payment relative to costs, however, is unclear.

Proposed cavitation rates, which are based on

estimates of average ‘reasonable costs’ for covered

88 As not~ eulier in ~s c~pter, A of the 15 existing FCOS are capitated for chiropractic services.
Chapter 4--Implications for Health Care Providers . 115

CT pairs, cannot be compared easily with current

rates because they reflect costs of a substantially

different benefit package and a demographically

dissimilar population.

Furthermore, while expansion of prepaid health

care would improve predictability and strengthen

control of overall program costs from the State’s

perspective, providers may have difficulty anticipating their own net Medicaid revenues during the

initial years of the demonstration. Careful tracking

of utilization and costs from program startup would

be essential to long-term provider viability. Providers might require significant technical assistance

from OMAP in these efforts.

Subcontractors in the prepaid system would see

increases relative to prevailing FFS reimbursement

rates only if they were able to negotiate higher rates

with prepaid plans; OMAP has not established a

floor for subcontractor rates under the demonstration.

Provider participation in the case-managed FFS

system, which is expected to serve approximately 25

percent of demonstration eligibles, maybe harder to

increase than that in the prepaid system, since

payment for individual Medicaid services would

remain at prevailing FFS rates. Oregon has indicated

current problems with FFS provider participation in

rural areas of the State, where most FFS delivery

would occur under the demonstration. To help offset

additional case management responsibilities, primary care case managers would receive an additional payment of $3 per enrollee per month. How

much of an incentive this additional payment might

be for participation in rural areas cannot be predicted.

Impact of the Prioritized List

Orienting providers to the list would not be a

trivial undertaking. Diagnostic and procedure codes

used in the list, although familiar to providers in

current practice, are inadequate to make distinctions

between many CT pairs. Detailed, extensive guidelines would be required in order for providers to

accurately and consistently interpret the list. As of

the end of January 1992, OMAP had just begun to

develop new provider guidelines, but their level of

detail is not known.

Because they face denial of payment on a

claim-by-claim basis, providers (both professional

and institutional) in the case-managed FFS system

would feel the financial impact of the prioritized list

more directly and may respond to it behaviorally in

a different reamer than their counterparts in the

prepaid system. Differences in providers’ adherence

to the prioritized list could lead to unequal access to

specific benefits across as well as within the

proposed delivery systems.

Under cavitation, cutting services from the benefit

package would mean reducing prepaid reimbursement rates, presumably in proportion to reductions

in provider service liability. It is difficult to anticipate the threshold below which prepaid providers

would no longer be willing to participate. This

threshold would probably vary depending on the

financial and other characteristics of individual

providers.

Issues for Selected Providers

Publicly funded primary care clinics may find it

difficult to participate in the proposed managed care

system because they may lack the resources necessary to assume full or partial risk for patient care.

Reductions in current Medicaid caseloads could

limit the ability of some of these clinics to maintain

sufficient operating volume. Closing clinics could in

turn endanger access to care for the remaining

medically indigent population (e.g., persons with

incomes just over the poverty level who cannot

qualify for Medicaid). State and Federal Medicaid

officials should ensure that these safety net providers remain financially stable throughout the demonstration. Possible strategies for doing so include

maint aining the Federal reimbursement and patient

freedom of choice protections for rural health clinics

and FQHCs and offering stronger guarantees that

existing publicly funded providers could participate

under the demonstration.

Most hospitals should benefit under the demonstration due to reductions in uncompensated care.

However, billing and payment methods for inpatient

services would need to be amended to permit

distinctions between covered and noncovered services provided during the course of a single hospital

stay. Hospitals that would continue to be paid

according to the current DRG system under the

demonstration (about half of all hospitals in the

State) could face denial of payment for a number of

diagnostic and other covered services for patients

whose principal diagnosis falls below line 587. In
116 ● Evaluation of the Oregon Medicaid Proposal

corollary, OMAP could end up paying for below-the- nontraditional providers of care (e.g., chiropractors

line services to the extent that they are masked by and naturopaths) in the Medicaid system. Physician

“covered” DRGs. OMAP has indicated that it will case managers in both the prepaid and FFS systems

address this problem. may be less likely to allow patients to use alternative

The proposed managed care expansions would sources of care than patients might choose for

probably limit opportunities for participation of themselves under an unrestricted FFS system.
Chapter 5

Implications for Beneficiaries

Contents

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

HOW THE OREGON MEDICAID POPULATION WOULD CHANGE . . . . . . . . . . . . .

Current Eligibility Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rules Under the Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ACCESS TO CARE UNDER THE DEMONSTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Newly Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

How Oregon Medicaid Benefits Would Change Under the Waiver . . . . . . . . . . . . . . . .

Current Oregon Medicaid Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Coverage Under the Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common Medical Conditions Among Oregon Medicaid Beneficiaries . . . . . . . . . . . . .

SUMMARY OF IMPLICATIONS FOR THE

DEMONSTRATION’S PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Benefits and the Prioritized List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Role of the Delivery System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119

119

119

123

128

133

133

133

135

135

141

152

152

152

154

A Critical Evaluation Is Essential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Contents—Continued

Figures

Figure Page

5-1. Current Medicaid Eligibility in Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

5-2. Proposed Demonstration Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

5-3. Oregon Medicaid Demonstration Enrollment Projections . . . . . . . . . . . . . . . . . . . . . . . 131

5-4. Projected Concentration of Medicaid Eligibles in Oregon, FY 1992 . . . . . . . . . . . . . 134

Tables

Table Page

5-1. Mandatory and Optional Eligibility Groups Covered by the

Oregon Medicaid Program, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

5-2. Monthly Income Standards for Medicaid Benefits for a Family of Three

as a Percentage of the Federal Poverty Level, January 1991 . . . . . . . . . . . . . . . . . . . 124

5-3. Oregon Medicaid Program: Estimated Average Length of Eligibility,

Before and After the Proposed Demonstration in a 1-Year Period . . . . . . . . . . . . . . 129

5-4. Oregon Medicaid Enrollment for FY 1991 and Projected for FY 1993,

With and Without the Demonstration, by Eligibility Group . . . . . . . . . . . . . . . . . . . . 130

5-5. Race and Ethnicity of the Oregon Medicaid Population, FY 1990 . . . . . . . . . . . . . . 131

5-6. Projected Oregon Medicaid Enrollment by Age and Sex,

Under the Proposed Demonstration, FY 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

5-7. Proposed New Benefits Under the Oregon Medicaid Demonstration . . . . . . . . . . . . 136

5-8. Oregon Medicaid Coverage of Adult Preventive Services:

Demonstration vs. Current Benefits ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

5-9. Oregon Medicaid Coverage of Ancillary Services

Under the Proposed Demonstration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139

5-10. Examples of Below-the-Line Condition-Treatment Pairs With Limited

Anticipated Impact on Beneficiaries’ Health ● . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

5-11. Examples of Uncovered Condition-Treatment Pairs With Clinical Significance

and No Possible Alternatives for Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

5-12. Examples of Uncovered Condition-Treatment Pairs With Clinical Significance

and Possible Alternatives for Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

5-13. Inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to

the Proposed Demonstration: Most Common Principal Diagnoses, FY 1989 . . . . 146

5-14. Inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to

the Proposed Demonstration: Most Common Principal Diagnoses

for Children Under Age 18, FY 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

5-15. Inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to

the Proposed Demonstration: Most Costly Principal Diagnoses, FY 1989 . . . . . . . 148

5-16. Inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to

the Reposed Demonstration: Most Costly Principal Diagnoses for Children

Under Age 18, FY 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149

5-17. Utilization by Oregon Medicaid Recipients Subject to the

Proposed Demonstration: Most Common Principal Diagnoses, FY 1989 . . . . . . . . 151

5-18. Utilization of Physician Services by Oregon Medicaid Recipients

Subject to the Proposed Demonstration: Most Common Principal Diagnoses

for Children Under Age 18, FY 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Chapter 5

Implications for Beneficiaries

INTRODUCTION

This chapter examines Oregon’s proposed waiver

from the perspective of those who would participate

in the new program. The aim of this analysis is not

a defense or evaluation of the status quo. The focus

here is on how the demonstration might affect

current and, to a lesser extent, new Medicaid

participants compared with the existing program.

The first part of the chapter analyzes in detail the

effects of the State’s proposed new eligibility rules

and describes how the makeup of Oregon’s Medicaid population would change under the demonstration. The second part examines key elements of

access to care, focusing on the prioritized list, its

effect on benefits, and particularly, the implications

of withdrawing funding for ‘below-the-line’ conditiontreatment (CT’) pairs. It also presents available data

that help assess how often current Oregon Medicaid

participants might experience an uncovered condition. The final part of the chapter reviews the overall

implications for beneficiaries of expanding eligibility, establishing Medicaid benefits based on the

prioritized list of health services, and reforming the

delivery system.

HOW THE OREGON MEDICAID

POPULATION WOULD CHANGE

Oregon proposes to extend Medicaid eligibility to

all of its poor population. This reform is significant

not only because it broadly expands participation in

the Oregon Medicaid program (by more than 20

percent in the first year alone), but also because it

eliminates the historic categorical approach to Medicaid eligibility. Oregon’s demonstration, if approved,

would be the first to use Federal matching funds to

make Medicaid available to all the poor regardless

of age, marital status, family relationship, or pregnancy. Oregon’s proposal seeks to cover not only

people in traditional assistance categories (e.g., poor

single women with children) but other groups as

well, including single men, childless couples, and

two-parent families whose incomes are within the

Federal poverty level (FPL).

This section will review the details of current

Oregon Medicaid eligibility requirements, compare

them with eligibility rules under the proposed

waiver, and assess the implications of the new

waiver rules for current Medicaid participants.

Current Eligibility Requirements

Eligibility for the current Oregon Medicaid program is determined by federally defined mandatory

and optional categories of the poor as well as

State-determined income standards for participation. Recent congressional mandates to expand

coverage of pregnant women and children have

weakened the link between Medicaid and the Aid to

Families with Dependent Children (AFDC) cash

welfare program (see ch. 2). Still, the rules of access

to Medicaid, throughout the country, remain focused

on children, pregnant women, and recipients of

either AFDC or Supplemental Security Income

(SSI) cash assistance. Single men and childless

couples, regardless of how poor or how medically

vulnerable, are denied access to Medicaid unless

they are also elderly or disabled.

Mandatory Groups

The Federal Government mandates coverage of

certain groups and allows coverage of a number of

optional categories. The federally mandated coverage groups include (see table 5-1) (301):

●

●

●

AFDC participants-single-parent families

who receive AFDC cash assistance or who have

been terminated from AFDC cash assistance

because of increased earnings or hours of

employment within the last 12 months; l

Unemployed-parent families-families whose

principal breadwinner is recently unemployed

and who meet AFDC income and asset requirements;

Poverty level medical (PLM) women and

children2—pregnant women and children up to

1 APDC is a Federal-State program that provides cash assistance to needy children and/or their caretaker relatives when there is deprivation of a child

due to the absence, incapacity, or unemployment of a parent.

2 ~cpoveW level me~c~” (pLM) i5 he tem USd by the Oregon Medicaid program to describe thk ETOUp of PreWnt women and Young ctil~eW

which was mandated Medicaid coverage under the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-239).

–119–
Table 5-1--Mandatory and Optional Eligibility Groups Covered by the Oregon Medicaid Program, 1991

Federally mandated groups Optional groups covered by Oregon Optional groups not covered by Oregon

Families and children

Single-parent families receiving Aid to Families with

Dependent Children (AFDC) cash assistance.

Families terminated from AFDC cash assistance

because of increased earnings or hours of employment (limited to 12 months).

Unemployed parent families who meet the State

AFDC income requirements.

Children for whom adoption assistance or foster care

maintenance payments are made.

Pregnant women and children up to age 6 whose

family income is Iess than 133 percent of the Federal

poverty level (FPL).

All children born after September 30, 1983 whose

family income is less than 100 percent of the FPL.

Other groups

Aged, blind, or disabled individuals receiving Supplemental Security Income (SSI) or other more restrictive criteria established by the State under the 209(b)

option.

Certain severely disabled individuals terminated from

SSI because of earnings from employment.

Medicare recipients with family incomes under 100

percent of the FPL (coverage limited to payment of

Medicare premiums, coinsurance, and deductibles).

Working disabled individuals under 200 percent of

Families and children

. Medically needy: pregnant women and children

under age 18.

Other groups

●

●

●

●

Individuals in nursing facilities who would be eligible

for SSI if they lived at home.

individuals in nursing facilities who are eligible for

Medicaid because income Is less than 300 percent of

SSI.

Individuals receiving home and community-based

services under a waiver (Oregon covers Aged and

Disabled under Senior and Disabled Services Division and Mental Health and Developmental Disabilities Services Division waivers).

Aged, blind, or disabled individuals receiving only

optional State supplements (Oregon covers individuals receiving Oregon Supplemental Income Program

payments).

Medically needy elderly (65 or older), blind, or

disabled.

Medically unemployable adults who receive general

assistance (not eligible for Federal funding).

Families and children

●

●

●

●

●

Children between 18 and 21 years old in AFDC

families.

Pregnant women and children up to age 1 between

133 percent and 185 percent FPL.

Children aged 9 to 21 of two-parent families whose

income is below AFDC standards but who do not

otherwise qualify for AFDC.

Medically needy children between the ages of 18 and

21.

Medically needy adults who are not pregnant, aged,

blind, or disabled.

Other groups

. Aged, blind, or disabled individuals under 100 percent of the FPL who are not otherwise eligible for

Medicaid.

. Disabled children underage 19 who are cared for at

home in lieu of institutional care but whose family

income is above the eligibility limits of SSI.

the FPL (coverage limited to payment of Medicare

Part A hospital insurance premiums).

SOURCE: Oreaon Department of Human Resources. Office of Madical &istance Prowams, Salem, OR. “Medicaid and the State of Oregon Medical Assistance Programs,” (OMAP3061 ), January,

1997 and M. Waid, “Addendum: A Brief Summary of the Madicaid Prografi,” H~a/th Q’re t%am”ng F/etiew1990 Annual Supplement, Baltimore, MD,-Dscembar, 1990.
Chapter 5--Implications for Beneficiaries . 121

●

●

age 6 whose family income is less than 133

percent of the FPL and all children up to age 19,

born after September 30, 1983, whose family

income is less than 100 percent of the FPL;

Foster care children--children for whom

adoption assistance or foster care maintenance

payments are made under Title IV-E of the

Social Security Act; and

Certain aged, blind, and disabled individuals.

Optional Groups

Of the eligibility options allowed under Federal

Medicaid rules, Oregon covers medically needy

pregnant women and children under age 18 and

certain groups of the elderly, blind, and disabled (see

table 5-1) (168). 3 States have the option to offer

Medicaid to the medically needy when their family

income and resources lie above the AFDC need

standards if they also meet the categorical requirements of the program (e.g., an absent parent or

disability). 4 Each State has the right to set its own

medically needy eligibility standards as long as they

do not exceed 133.33 percent of the maximum

AFDC assistance thresholds for similarly sized

families. Through a spend-down provision, individuals with incomes above the medically needy

standard also may become eligible if their medical

expenses are high enough to reduce their countable

income below the medically needy maximum.

Oregon also provides a “general assistance”

program of limited health care benefits (without

Federal funding) to medically unemployable adults

who would not be disabled long enough to qualify

for Social Security benefits (168).5

Although Federal Medicaid options permit coverage, the current Oregon program does not cover

AFDC children between 18 and 21 years of age;

pregnant women and infants under age 1 with family

incomes between 133 and 185 percent of the FPL;

children aged 9 to 21 of two-parent families whose

incomes meet income eligibility standards but who

are categorically ineligible (often referred to as

“Ribicoff children’’); 6 and the medically needy,

ages 18 and older, other than those described above

(168).

Oregon Income Standards for Medicaid

Eligibility

In 1991, the FPL was $928 per month for a family

of three.7 Figure 5-1 shows the monthly income

levels required to obtain Medicaid in Oregon.

Income criteria vary widely with the applicant’s

demographic characteristics and can even differ

among individuals within the same family. Pregnant

women, infants, and young children (under age 6)

are eligible if their family incomes are under 133

percent of the FPL. Children from age 6 to 8 must

live in families with incomes under 100 percent of

the FPL to be eligible for benefits.8 Children 9 to 17

years old who meet AFDC categorical requirements

are limited by the medically needy monthly income

standard of $613 for a family of three (66 percent of

the FPL).9 Young people overage 18 and nonelderly

adults (unless pregnant) must meet AFDC categorical requirements and are subject to the most sbin3 In July 1991, budgetary constraints led the Oregon State legislature to eliminate coverage of nonpregnant medically needy AFDC adults and curtail

medkallyneedy coverage of the aged, blind, and disabled. Benefits for the latter groups now include only: 1) prescription drugs provided in a pharmacy,

and 2) mental health and alcohol/drug treatment semices provided by community mental health and alcohol/drug programs (171). Although 36 States

had medically needy programs in 1990, it is not ~own how many were as restrictive as Oregon’s (4). Medicaid regulations require that States which

cover the medically needy must at least provide a minimum level of services, including premtid and delivery services for pregnant womeu ambulatory

services for children under 18, and home health services to those individuals entitled to skilled nursing facility services. State plans that include services

in mental health institutions, or in intermediate care facilities for the mentally retarded, must offer a broader range of services to the medically needy.

4$ ~CategonC~y ~~y~’ refers t. &o= Who Me M~Caid.eligible b~ause hey below to ce~categories of poor people, such ~ those Who are

a member of a family with dependent children where one parent is absen~ incapacitated, or unemployed.

5 The general assistance recipients are not entitled to Medicaid-funded hospital care but are eligible for outpatient and prescription drug benefits.

6 ‘CRibi~fi c~&m>’ we -~for fo~~ s~tor A~ Ribkoff, the sponsor of legislation authorizing coverage for this group.

7 The 1991 FPL is used here because it was the poverty guideline that was in place at the tie Oregon submitted the waiver application. The 1992

FPLis$11,570, or $964 per mon~ for a family of three in the contiguous 48 States (57 FR 5456). The Federal Government has established separate

poverty levels for both Alaska and Hawaii ($14,460 and $13,310, respectively) because of their unique economic conditions.

8 The Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) mandated that State Medicaid programs cover all children under age 19

who were born after September 30, 1983 and whose family income is less than 100 percent of the FPL. By the year 2002, coverage of all children under

age 19 will be universal (270). At presen~ only & to 8-year-olds are affected.

9 Children and pregnant women can also qualifjJ for medically needy coverage by ‘‘spending down’ to the required net income level if they also

meet a mandatory asset test. Oregon’s asset limits for the medically needy are $2,000 for the first household member, $3,000 for two, and $50 for each

additional household member (252).

328-308 0 - 92 - 5
122 ● Evaluation of the Oregon Medicaid Proposal

Figure 5-l-Current Medicaid Eligibility in Oregon (Monthly Income Levels for a Family of Three in 1991)

185$40 of

poverty ----+

($1,717)

133!40 of

poverty ~

($1,235)

Federal

poverty

level ------+

($928)

SSI

standard —>

Medically _.__+

needy standard

($613)

AFDC +

payment

standard

($460)

I

. . . . . . . . .

. . . . . . . . .

---------r

ITAged, Pregnan

blind, women

and and

disabled infants

. . . . . . . . .

. . . . . . . . .

Under

age

6

. . . . . . . . .

Age

6 to 8 a

Young children

Children Adults

]ver age

8

a

Single and

!

“unemployed

parent” families

Children Adults

over age

81

Other twoparent families

Single

adutts

and

childless

couples

Current Medicaid program

~ ] Categories ourrentiyoovered by Oregon

~T? Optional categories not revered by Oregon but allowed by Federal statute

KEY: SS1 - Supplemental Security Income; AFDC - Aid to Families with Dependent Children

NOTE: This is a$implified presentation of eligibility. Income thresholds are net of allowable deductions including childcare expenses, work relatsd expenses,

and certain work hwentive disregards. Medicalty needy groups can “spend down” to eligibility by incurring meckal expenses. Assets also enter into

eiigitility. Not all eligibility groups are shown. Oregon&es, for example, cover some older children in intact families, such as those in foster care and

institutions. Eiderfy, blind, and disabled with incomes under poverty can obtain Medicaid and Medicare copayments and deductibles.

a All Chitiren under age 19 ad born afier ~ptem~r 30, 19~ must ~ ~versd if family in~me is be[ow poverty; ages shown are ~ of October 1991.

SOURCE: Oregon Department of Human Resources, Office of Medical Assistance Programs, Saiem, OR, The Oregon Medicaid Demom?tn?tion Waiver

A#cation, submitted to the Heaith Care Finandng Administration Aug. 16,1991.

gent income criteria of all: the AFDC monthly AFDC and Medicaid eligibility are complex and

income standard of $460 for a family of three (less appear to be understood in great detail by few (59).

than 50 percent of the FPL). Recent entrants into the The above description of Oregon’s income criteria is

workforce are allowed certain financial work incen- by necessity simplistic and masks a few critical

tives (see below). details. For example, does the Medicaid applicant

Counting Income and Resources—But how are have a household member who works, and for how

income and resources defined? State and Federal long has that person worked? Does the applicant

rules on how to count income and resources for have any assets? Does the individual own a car or a
Chapter 5--Implications for Beneficiaries ● 123

home? Are there deductible child-care expenses? All

of these questions and others determine what is

called ‘‘countable’ income. The net result is that in

some cases, families with gross incomes greater

than the reported income eligibility standards can

gain access to Medicaid. In fact, in 16 States,

families with a recently employed worker and

incomes greater than the FPL are eligible for

Medicaid benefits (270).10

To be eligible for AFDC payments and automatically eligible for Medicaid, a family must pass both

a gross income test and a ‘‘countable’ income test.

Gross monthly income cannot exceed 185 percent of

the State’s AFDC need standard (see table 5-2).

Families with no other income than their AFDC cash

assistance payment must have countable income that

is less than the State’s AFDC need standard. For

others, countable income must be less than the

State’s need standard after allowing for child-care

costs up to $160 per child and a standard allowance

of $75 per month. In addition, during the frost year

on a job, AFDC recipients are allowed a workincentive bonus based on the length of employment

(i.e., the bonus varies depending on whether the

working family member has been employed less

than 4 months, between 5 and 12 months, or more

than 12 months) (266).11 12

The same rules governing income counting apply

to PLM women and young children, except that

these mandatory coverage groups are subject to

higher net income thresholds (i.e., 100 or 133

percent of the FPL).

Oregon vs. OtherStates—in 1991, only 17 States

had higher AFDC income standards than Oregon’s

(270). Very few State AFDC need standards approach the FPL and many fall short of 50 percent of

the Federal poverty guideline (see table 5-2) (148,270).

In many cases, States have failed to adjust the AFDC

income standards for inflation and, consequently,

the average income threshold as a percentage of

poverty has been eroded substantially, from 71

percent in 1975 to 45 percent in January 1991

(146,148).13 AFDC monthly eligibility thresholds in

1991 for a family of three ranged from a low of $124

in Alabama to a high of $694 in California (270).14 15

As of July 1991, 28 States had higher income

eligibility limits for pregnant women and infants

than Oregon did (i.e., between 140 and 185 percent

of the FPL) (148).16 A 1989 survey of State

Medicaid programs found that 34 States covered

“Ribicoff children,” many through age 21 (138).17

Oregon does not cover these children (see above).

Rules Under the Waiver18

All legal residents of Oregon, with family incomes less than the Federal poverty guideline,

would be eligible for Medicaid under the proposed

‘“ The 16 States are Alaska, Califorti Comecticu6 Hawaii, Kentucky, Maine, Massachusetts, Michig~ Minnesota, New Hampshire, New Yorlq

Rhode Island, UtalL Vermon~ WashingtorL and Wisconsin.

‘1 -the f~t 4 months of a job, the bon~ is * to the f~t $30 of -ed income plus one-third of additional earnings after the child-care and

standard dcxiuctions are taken. For the remaking 8 months, the bonus is $30. There is no work incentive bonus after 12 months, but a $75 standard

deduction is allowed.

12 ~spi~ the= work fientiv~, longitudinal Medicaid data show that few people who leave the AFDC welfare program get the Winsitiond Wctid

benefits they are entitled to receive (59).

13 While the Consumer Price Index rose an estimated 245 percent from July 1970 to January 1991, the AFDC income eligibility standard increased

only 134 percent (270).

14 Th=e &ome standards pertain to eligibility levels for the first 4 months of AFDC participation and assume work expenses of $90 per month ~d

no child-care expenses. Eligibility levels after the f~st 4 months of coverage are considerably more stringent. The percentage presented in the text are

based on the 1990 poverty level of $10,560 for a family of three.

IS The eligibility thresholds in Alaska is even higher (i.e., $891), but this is not comparable to the thresholds in the contiguous 48 Stites.

16 The 28 ~ ~~ ~~~, ~orni~ co~ticu~ De]aWWq Dis~ct of Col@iq ~olj~, ~w~, Iow& Ku, Kenmc@, =,

MarylanL Massachusetts, MichigaqMinnesota, “ Mississippi New Jersey, New Mexico, New York North Cam@ Rhode Ida@ South Carol@

Tennessee, Vermont, WashingtorU West Virgin& and Wisconsin.

17 me M me haAhw, Cdiforx@ Connecticut District of Columbi4 Florida, Georgiq Hawaii, Illinois, Iow% Kansas, Kentucky, -e,

Maryland, Massachusetts, Michigaq hfinnesow Mississippi, Missouri, Nebraskq New Jersey, New Yor& North Camlin& North DakotiL Ohio,

OklahoW Pennsylvania South Care@ Tennessee, Texas, Utz@ Vermont Virginia and Wisconsin. The majority of thes: States cover Ribicoff

children through age 21.

18 ~d~cl-iption of eligibility rules is drawn from &gon’s waiver application urdess OthtXWkC noted.
124 . Evaluation of the Oregon Medicaid Proposal

Table 5-2-Monthly Income Standards for Medicaid Benefits for a Family of Three as a Percentage of

the Federal Poverty Level, January 1991° b

AFDCC need AFDC effective Eligibility Level Medically needy

State standard first 4 months after 12 months standard

Alabama. . . . . . . . . . . . . . . . . . . . . . . . . .

Alaska . . . . . . . . . . . . . . . . . . . . . . . . . . .

Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . .

Arkansas . . . . . . . . . . . . . . . . . . . . . . . . .

California . . . . . . . . . . . . . . . . . . . . . . . . .

Colorado . . . . . . . . . . . . . . . . . . . . . . . . .

Connecticut . . . . . . . . . . . . . . . . . . . . . . .

Delaware . . . . . . . . . . . . . . . . . . . . . . . . .

District of Columbia . . . . . . . . . . . . . . . . .

Florida . . . . . . . . . . . . . . . . . . . . . . . . . . .

Georgia . . . . . . . . . . . . . . . . . . . . . . . . . .

Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . .

Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indiana . . . . . . . . . . . . . . . . . . . . . . . . . . .

Iowa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kansas . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kentucky . . . . . . . . . . . . . . . . . . . . . . . . .

Louisiana . . . . . . . . . . . . . . . . . . . . . . . . .

Maine . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maryland . . . . . . . . . . . . . . . . . . . . . . . . .

Massachusetts . . . . . . . . . . . . . . . . . . . .

Michigan . . . . . . . . . . . . . . . . . . . . . . . . . .

Minnesota . . . . . . . . . . . . . . . . . . . . . . . .

Mississippi . . . . . . . . . . . . . . . . . . . . . . .

Missouri . . . . . . . . . . . . . . . . . . . . . . . . . .

Montana . . . . . . . . . . . . . . . . . . . . . . . . . .

Nebraska .. .. .. .. .. ... ... ..’......

Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . .

New Hampshire. . . . . . . . . . . . . . . . . . .

New Jersey . . . . . . . . . . . . . . . . . . . . . . .

New Mexico . . . . . . . . . . . . . . . . . . . . . . .

New York . . . . . . . . . . . . . . . . . . . . . . . . .

North Carolina . . . . . . . . . . . . . . . . . . . .

North Dakota . . . . . . . . . . . . . . . . . . . . .

Ohio . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Oklahoma . . . . . . . . . . . . . . . . . . . . . . . . .

Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pennsylvania . . . . . . . . . . . . . . . . . . . . . .

Rhode Island . . . . . . . . . . . . . . . . . . . . .

South Carolina.. . . . . . . . . . . . . . . . . . . .

South Dakota . . . . . . . . . . . . . . . . . . . . . .

Tennessee . . . . . . . . . . . . . . . . . . . . . . . .

Texas . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Vermont . . . . . . . . . . . . . . . . . . . . . . . . .

Virginia . . . . . . . . . . . . . . . . . . . . . . . . . .

Washington . . . . . . . . . . . . . . . . . . . . . . .

West Virginia . . . . . . . . . . . . . . . . . . . . . .

Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . .

Wyoming . . . . . . . . . . . . . . . . . . . . . . . . .

Average . . . . . . . . . . . . . . . . . . . . . . . .

13.4%

76.8

31.6

22.0

74.8

45.4

62.6

36.4

46.1

31.7

45.7

59.2

33.9

39.5

31.0

45.9

41.3

56.7

20.5

70.2

43.7

62.4

63.1

57.3

39.6

31.5

39.9

39.2

35.5

55.6

45.7

33.4

62.2

29.8

43.2

36.0

50.7

47.8

45.4

59.7

47.4

41.5

44.4

19.8

57.8

73.1

31.3

57.2

26.8

55.8

38.8

45.1 83 58 56

NOTE:NA-Notappliiable;the Statedoesnothaveamedicaliyneedyprogrmn.

aTh~e~~ulatiO~ mumewoAexpenseSof$Wpermonth andnochild+areexpenses.Thecalwlations arealSokmdona1990povertylevelof$10,419

($868 permonth)forafamilyofthree, and a1991minimumwagesalaryof$7,904 ($659 permonth)

b[nmmelevelat~i~ Medicaid eliaibiiitv ends.

cAF~.Akjto Famflim Mth Depeidenichfldren,

SOURCE: U.S. Congress,Houseof Representatives, Committeeon Waysand Means, OvertiewotEntit/emerrtProgmns: f9!Jl(GreenBook)Bac@round

Materia/andDataonPrograms WithintheJutisdictionoftheGomrnittee on WaysandMssns,(Washington, DC: U.S.Government PrintingOffice,

May7,1991) and National Governors’ Association, MCHupdate, OBRA-86/87/89 Summary Status: MedlcaidCoverage @Wonsfor Pregnant

146menandChiidren, Washington, DC, July 1991.
Chapter 5--Implications for Beneficiaries ● 125

waiver (see figure 5-2).19 20 In addition, pregnant

women and children up to age 6 with gross family

incomes below 133 percent of the FPL would

continue to be Medicaid-eligible.21

The waiver eligibility categories would be: 1)

AFDC, 2) PLM pregnant women and children with

family incomes between 100 and 133 percent of the

FPL, 3) new eligibles, and 4) general assistance

recipients.

Simplified Rules

Oregon’s waiver application outlines streamlined

eligibility rules for all demonstration participants

except those who receive AFDC cash assistance.

Under Oregon’s proposed rules, income calculations

for non-AFDC demonstration participants would

differ in a number of important ways:

●

●

●

●

Gross vs. net income--Medicaid applicants

would be subject to a gross income test instead

of the current net income assessment. Standard

deductions and work incentives, such as essential work and child-care expenses, would not be

considered in counting income.

Retroactive eligibility-Federal requirements

to provide retroactive benefits up to 3 months

prior to the date of application for Medicaid

benefits would be waived.

Whose income counts?—Federal rules limiting ‘‘countable income’ to that of the applicant, or a parent or spouse, would be waived to

allow consideration of the incomes of other

household members. Under the waiver, the

definition of a family unit would be expanded

to include unmarried cohabiting couples who

have at least one joint child under age 19 or an

unborn child.

Assets test—The resources (or assets) of demonstration applicants would not be considered. 22

● Medically needy—Medicaid applicants with

medical expenses would no longer be able to

“spend down” to become eligible under the

medically needy program. In fact, the current

medically needy program for pregnant women

and children under age 18 would be eliminated

altogether under the waiver.

These changes are expected to greatly simplify

Medicaid eligibility primarily because they reduce

the considerable amount of personal documentation

now required. Under existing rules, proof of up to 4

months income and detailed expenses as well as

evidence of family assets may be necessary to

determine eligibility. It is well established that the

Medicaid eligibility procedural requirements are

often a significant barrier to coverage. In 1986,

nationwide, 62 percent of rejected Medicaid applications were due to ‘failure to comply with procedural

requirements” (246).

Yet Oregon’s proposed simplified procedures

would not apply to a large proportion of demonstration participants. AFDC recipients, who are projected to make up 63 percent of demonstration

enrollment in the first year of the waiver and as much

as half the population in the final demonstration

year, would continue to be subject to current AFDC

rules so that they could receive cash benefits (see

below for other enrollment data). Thus, although

waiver rules would significant.ly improve Medicaid

eligibility processing in Oregon, the program’s

remaining link with AFDC means a continued need

for detailed personal income, expense, and other

demographic information.

Implications for Current Medicaid Participants

In addition to the great majority of poor, uninsured Oregonians who would gain access to Medicaid benefits under the waiver, almost all current

Medicaid recipients would be able to participate in

the demonstration. However, the simplified eligibil19 B-use my m@ant and SeaSOMI workers are undocumented aliens, they are currently ineligible for Medicaid benefits ~d W would not &

able to participate in the demonstration. The waiver rules maintain the current policy that Medicaid applicants be citizens or legal aliens who can

demonstrate that they intend to reside in Oregon (173). There would be no required length of residency for migrant workers during the demonstration

(as is current policy) (252). There were approximately 128,564 migrant and seasonal farmworkers in Oregon in 1989 (296); it is not known what

Ppofion were undocumented aliens,

2fJ me ag~, b~d, disabl@ and fOSt~~eC~&enWO~d be exempt from the demonstration until ~tokr 1993 (as- the Health CareF”lnancing

Administration’s approval to phase in this population). Their eligibility wotid continue to be determined under current rules until that time and they

would continue to qualify for Medicaid and receive services under existing rules (177).

21 ~e~t wom~ with incomes ~tw~n 100 and 133 percent of the FPL would have coverage until 60 dayS postpartum (as iS C~nt pmctice).

~ me tibus Budget RWonciliation Act of 1986 gave States the option to omit the assets teSt Wkn determin@ Medicaid eligibility for PLM

women and children. All but five States, including OregoL have done so. The five States that have not are California Illinois, Iow& North Dako@ and

Texas (148).
126 . Evaluation of the Oregon Medicaid Proposal

Figure 5-2-Proposed Demonstration Eligibility (Monthly Income Levels for a Family of Three In 1991)

185% of

poverty ------+

($1,717)

133% of

poverty ~

($1,235)

Federal

poverty

level ~

($928)

SSI

standard .—>

Medically .->

needy standard

($613)

AFDC --+

payment

standard

($460)

. . . . . . . . .

. . . . . . . . . .

Aged,

blind,

disabled

● ☛☛ ☛ II****

I ● ● ● ● )B ● ● ● ● I

● ☛☛ ☛ ☛ ☛☛☛☛ ● ☛☛☛ ☛ ● ☛☛☛☛☛☛☛☛☛☛☛☛☛ ☛

● ☛☛ ☛ b ● * * * ● *** * ● ************* *

● * * * b ● * * * ● *** * ● ************* *

● * * * 4 ● * * * , t ● * * * b ● ************ *

● * * * 4 ● * * * ● 4 4 * ● ************ *

● * * * ● ************ *

● * * *

● * * * 4 ● * * * **** b ● * * *

● * * * * ● * * * ● * * * h ● * * *

**** 9 ● * * * ● * * * b **** ● *** *

● * * * 4 ● * * * ● * * * t ● * * * ● *** *

● * * *

i

● * * * ● * * *

● * * * 4*** ● * * * ● * * * ● *** * #

● ☛☛ ☛ 4 ● * * * b ● * * * ● *** *

● * * * a ● * * * b ● * * * ● **4 *

● * * *

i

} ● * 4 * ● *** *

I I I I

Pregnant

women

and

infants

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

● ☛☛☛☛☛☛☛ ☛

Under Age Children Adults Children Adults

age 6 to 8 over age over age

6 8 8

Young children single and Other two1 I I

“unemployed

I

parent families

parent” families

Single

adults

and

childless

couples

Current Medicaid program

~] Categories currently covered by Oregon

~T~ Optional categories not covered by Oregon but allowed by Federal statute

Demonstration eligibility

~] Currently eligible

~~~ Newly eligible (allowed by Federal statute)

[~] Newly eligible (requiring Federal waiver)

KEY: SS1 - Sumdemental Security Income; AFDC. Aid to Families with Dependent Children.

NOTE: This is a-simplified representation of eligibility. See text for further explanation.

a AJl ~i~ren un~ a~ 19 and ~rn aft~ ~pt~~r 30, 1 ~ must bS ~ver~ if f~ily i~me is below poverty; ~es shOWIl are ~ Of October 1991.

SOURCE: Oregon Department of Human Resources, Office of Medical Assistance Programs, Salem, OR, The Oregon MedicaW Demonstfatlon Waiver

App/icat/on, submitted to the Health Care Financing Administration Aug. 16,1991.
Chapter 5--Implications for Beneficiaries ● 127

ity rules do eliminate some individuals who could

have Medicaid benefits without the new requirements. The most vulnerable groups appear to be

PLM women and children.

PLM Women and Children-For PLM eligibles,

countable income sources would be the same as for

the AFDC program, although none of the income

deductions used in calculating AFDC eligibility,

such as essential work and child-care expenses,

would be allowed.

There is some uncertainty surrounding the estimates of the number of individuals who would be

affected by this change in rules. The State estimates

that only 215 currently eligible individuals (less

than 1 percent) would not meet the income standards

of the demonstration each year based on a recent

l-day survey of all its eligibility offices (253). On

the other hand, one county health provider of

Medicaid services, the Clackamas County Public

Health Division, has tracked PLM applications over

a 12-day period and reports that more than 9 percent

of its currently qualified PLM candidates would not

be eligible for Medicaid under the simplified waiver

rules (114).23 Most of the Clackamas County cases

would be disqualified because they would be unable

to use the $90 monthly earned income disregard.

Whether the Clackamas County experience would

be typical for all PLM applicants during the

demonstration is not known. Clackamas County has

an active Medicaid eligibility outreach program on

the site of its health clinic. In contrast, at present,

most other PLM applicants must go to a county

welfare office to obtain Medicaid benefits. Oregon

plans for eligibility processing during the demonstration mirror Clackamas County’s program in that

they include a special outreach effort to avoid any

welfare-related stigma of Medicaid benefits (177).

The Oregon Medicaid Program plans to enroll

Medicaid participants in community settings other

than welfare offices, such as schools, churches, and

elsewhere. If the State is successful at reaching out

to a community that has no present relationship with

the welfare system, the outcome of eligibility

processing under the waiver may be similar to

Clackamas County’s current experience.

Given that the Clackamas County survey period

was significantly longer than the State’s survey (12

days vs. 1 day) and that the State intends to

implement extensive outreach during the demonstration, it is likely that the actual denial rate of

currently eligible PLM women and children would

be greater than the State’s current estimate of less

than 1 percent.

Retroactive Benefits-Although AFDC recipients would continue to be able to receive retroactive

benefits for 3 months, coverage for new eligibles

would commence on the date of request.24 The

number of people who would be affected and the

scope of the related debt has not been well established. The State has estimated that only 154 PLM

participants received retroactive coverage in 1991

(253). Continuing retroactive coverage would entail

a significant burden of paperwork and could markedly increase the cost of bringing uninsured individuals into the Medicaid program. There are some who

are concerned, however, that eliminating retroactive

coverage may lead providers to delay treating

patients until they can present a valid Medicaid card

(221).

Medically Needy--The State has not estimated

how many medically needy recipients would lose

coverage under the waiver.25 Because Oregon’s

medically needy standard is only 66 percent of the

FPL, many of the current medically needy who use

the spend-down provision to become eligible are

likely to have incomes under the waiver’s 100

percent FPL income limit.

Asset Test—While an asset test would not be used

for new eligibles, this should have little effect on

current Medicaid participants. PLMs are already

exempt from asset test requirements and AFDC

recipients would continue, under the waiver, to be

subject to the current asset test.

23 me ~ac- cou~ pLM de~ rate includes 10 of 109 individ@s who appfi~ for M~caid coverage during the period January 2-17, 1992

and were determined to be eligible. Of this group, eight were pregnant women and two were children under age 6. Some of these individuals applied

for coverage as part of a family unit.

M A rq~ by RxImal statute, there would be a AfI-daY maximum limit between the application date and final deterrnination of eligibility ~itle

42, pm 435, sec.91 1].

X The State did examine 1 month’s eligibility files and found31 individuals who became eligible for the medically needy program by spending down

from family incomes above the FPL (252). Oregon reports, however, that it is unable to use this experience to develop an estimate for a 1 year period

because some people may be spending down for several consecutive months. The medically needy are required to apply for coverage on a monthly basis.
128 ● Evaluation of the Oregon Medicaid Proposal

Continuity of Coverage—A long-held criticism

of the Medicaid program has been that the constant

turnover of participants hurts continuity of care,

increases administrative expense, and discourages

provider participation. Because eligibility hinges on

personal characteristics that are often transient, such

as pregnancy, marital status, and the size of medical

bills compared with income, Medicaid participants

become eligible and then ineligible with disruptive

frequency (102). Yet, it is not clear from Federal

statutory eligibility criteria whether Medicaid is

intended to principally serve as a permanent source

of assistance or as a safety net for those experiencing

temporary hardships (239).

Oregon studies have shown that continuous Medicaid coverage is relatively brief for many program

participants. A 1989 survey of Oregon AFDC

recipients found that more than 45 percent had

continuous coverage ranging from only 1 to 11

months. A 1990 report revealed that, despite guaranteed continuous coverage of pregnant women up to

60 days postpartum, the average length of uninterrupted Medicaid coverage for PLM pregnant women

and children was only 6 months ( 159). It appears that

many PLM women enroll in the Medicaid program

late in their pregnancy.

National statistics indicate similar findings. One

study, using the National Longitudinal Survey,

reported that half of all AFDC recipients are

continuously covered for 1 year or less and only 18

percent remain on AFDC for more than 5 years

(154). An analysis of the Survey of Income and

Program Participation showed that other groups of

Medicaid participants, such as pregnant women and

young children, are even more likely to have

short-term coverage (239).

Short and colleagues argue that the Oregon

approach of using poverty as a criterion for eligibility, instead of more narrowly defined categorical

criteria, would open the Medicaid program to many

more people on a short-term basis. This is because

periods of poverty are often short-term and associated with intermittent participation in the labor force

(15,154). Persistent turnover of Oregon’s Medicaid

population could be particularly troublesome to

managed care providers who would be more subject

to the administrative and clinical problems associated with the interruption of care when eligibility is

terminated (239). On the other hand, Oregon’s

apparently successful managed care experience

indicates that the State may be able to help new

Medicaid managed care providers deal with these

difficulties (238).

Table 5-3 shows the projected average length of

eligibility for demonstration participants during the

course of a l-year period. Oregon’s waiver rules

guarantee 6-month periods of continuous coverage

(for all but AFDC participants) and may decrease the

turnover of the Medicaid population. While AFDC

eligibles would continue to be subject to current

rules, those who lose AFDC benefits should be able

to transfer to demonstration-only eligibility without

a break in Medicaid coverage (252). PLM women

and children, with family incomes below 100

percent of the FPL should also be able to transfer to

demonstration-only eligibility. The State expects

demonstration-only eligibles to have continuous

Medicaid benefits longer than any other eligibility

groups.

Enrollment 2627

The Oregon Medicaid population is projected to

increase dramatically and its makeup would change

considerably under the proposed waiver. In the first

year of the demonstration (i.e., fiscal year (FY)

1993), the change in eligibility rules is forecast to

increase the average monthly number of Medicaid

enrollees by more than 20 percent, from 214,364 to

258,464 (see table 5-4). By the fifth and final year of

the waiver, Oregon forecasts a total average enrollment of 368,700, including 120,600 beneficiaries

who would not be eligible under current rules (see

figure 5-3).28 29

u ~~ent ~~ present~ in this swtion are drawn from two sources: 1) the Oregon waiver application and 2) ~ublished &tii provided to tie

Office of Technology Assessment by the Oregon Medical Assistance l%ograms (OMAP) ot%ce. ‘I’he reader should note that OMAP data include

enrollment figures for two eligibility groups, the medically needy participants in the Oregon Supplemental Income Program and QualifM Medicare

Beneficiaries, that are not included in the waiver statistics. Both groups are relatively small and would not be part of the demonstration until the phase-in

of the disabled and elderly populations.

~ ~~ent data are presented on a fiscal year basis. Oregon’s fiscal year runs from July 1 tiOUgh Jwe 30.

2S u~ess ~~cat~ othe~w, this review of enrowent data focuses on average monthly data rather than counts of the total number of unduplicated

Medicaid beneficiaries. Because many beneficiaries have Medicaid benefits fora short period of time, annual unduplicated counts are significantly higher

than monthly averages. Unduplicated counts show the considerable volume of individuals flowing through the Medicaid program, but they are less useful

than average data for describing the program’s caseload.
Chapter 5--Implications for Beneficiaries ● 129

Table 5-3-Oregon Medicaid Program: Estimated Average Length of Eligibility,

Before and After the Proposed Demonstration in a l-Year Period

Average length of eligibility

(in months)a

Before the After the

Eligibility category demonstration demonstration

AFDC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5

c

6.5

PLM children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 4.8

PLM adults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 3.9

General assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 4.3

Demonstration only

Newly eligible families . . . . . . . . . . . . . . . . . . . . . . . NA 10.5

Newly eligible singles . . . . . . . . . . . . . . . . . . . . . . . . NA 9.9

Newly eligible childless couples . . . . . . . . . . . . . . . . NA 9.9

KEY: NA - not applicable; AFDC. Aid to Families with Dependent Children; PLM = poverty level medical.

a Eligibility is descri~ in terms of person-months. individuals Can appear in more than one eli9i~lity ~tego~.

b “Before the demonstration” data are based on actual FY 1989 experience.

c Shows adjustment for I gag welfare reform rules that was expected to result in increased length of eligibility for the

AFDC program.

SOURCE: Coopers & Lybrand, CWgon MedicAd Basic Health Sernkes Program: Calculation of Per Capita Cost

Report, (San Franeiseo, CA: Coopers & Lybrand, May 1, 1991) and Oregon Department of Human

Resources, Office of Medical Assistance Programs, Salem, OR, Uregon Hea/th P/an: Offerers Conferences

Questions and Answers, (Salem, OR: OMAP, Feb. 18, 1992).

This section will describe and compare the current

and projected program enrollment.

Current Enrollment

The average monthly Medicaid enrollment in FY

1991 was 185,709 (see table 5-4). Close to 71

percent of the participants were poor women and

children who enrolled either as PLM or AFDC

program participants. About 7,600 (4.3 percent) of

the AFDC eligibility group became eligible through

the medically needy program, which has since been

significantly scaled back to include only pregnant

women and children under age 18 (252). 30 T h e

elderly, blind, disabled, and foster care children

made up the remainder of the population in 1991.

Race and Ethnicity of the Current Medicaid

Population-Data on race/ethnicity are shown in

table 5-5. Minorities make up a small proportion of

Oregon Medicaid participants, reflecting their distribution in the statewide population (see ch. 2).

Oregon Medicaid participants are predominately

white (84.3 percent), The largest minority groups

among Medicaid participants are blacks (6.2 percent) and American Indians/Alaskan Natives (5.2

percent).

The Poor Without Access to Medicaid—Although more than 282,000 Oregonians were eligible

for Medicaid some time during FY 1991, many of

Oregon’s poor were uninsured.31 In FY 1990, more

than 101,000 Oregonians whose family incomes

were below the FPL, or about 29 percent of the

State’s poor population, had neither Medicaid,

Medicare, nor private health insurance coverage

(184). They are the target population of the proposed

demonstration project. The proportion of Oregon’s

poor without health insurance is lower than that of

the Nation overall; 35.7 percent of the U.S. population living in poverty were uninsured in 1989 (265).

Impact of the Waiver on Enrollment

The average monthly number of Medicaid participants in the demonstration is projected to be 197,500

in FY 1993 (see table 5-4). More than 302,000 poor

Oregonians would take part in the demonstration for

some period during its frost year.

Oregon’s demonstration enrollment projections

assume that, although there are more than 101,000

uninsured poor Oregonians, only about 40 percent of

the target population of new eligibles would actually

enroll in the first year. On average, about 72 percent

29 ~c Stite ~xFts to~ Me&Caid ~mol~at to ~ sqg,s~ in tie last yew of tie w~ver if its ~date to e~loyers to provide health irlSuran03

is fully implemented.

M ~~ou~ ~c ~~~y ~~y ~uSt meet tie ~~gon~ ~fiements of fie~pmg~ (e.g., an absent parent) to be eligible for Meditid

benefits, they are not eligible for AFDC cash assistance because their family incomes are too high See the earlier discussion regarding eligibility rules.

31 Note tit ~~ou@ zgz,~ ~egon residents r=eived M~caid ben#lts in ~ 1~1, my were efigible for ody a brief period during tie y~,
Table 5-4--Oregon Medicaid Enrollment for FY 1991 and Projected for FY 1993, With and Without the Demonstration, by Eligibility Group

FY 1991 enrollment Projected FY 1993 withoutS627 Projected FY 1993 withS627

Average Percent

eligibles of

per month total

18,877

22,037

7,409

2,931

550

51,804

115,113

5,312

10,880

131,305

10.2Y0

11.9

4.0

1.6

0.3

27.9

62.0%

2.9

5.9

70.7

28,019

35,249

10,526

5,738

1,504

81,036

189,085

14,905

40,389

244,380

22,161

26,465

7,620

3,934

784

60,964

124,900

6,100

19,700

150,700

10.3%

12.3

3.6

1.8

0,4

28.4

58.3%

2.8

9.2

70.3

28,019

35,249

10,526

5,738

1,504

81,036

189,085

14,905

40,389

244,380

22,161

26,465

7,620

3,934

784

60,964

124,900

6,100

19,700

150,700

8.6%

10.2

2.9

1.5

0.3

23.6

48.3 %

2.4

7.6

58.3

New Medicaid eligibles

Categorical.. . . . . . . . . . . . . . . . . . . . . . . NA NA — NA NA 8,114 7,100 2.7%

Noncategorical . . . . . . . . . . . . . . . . . . . . NA

—

NA — NA NA 44,848 37,000 14.3

General assistance. . . . . . . . . . . . . . . .

—

4,506 2,600 1.4 4,679 2,700 1.3 4,679 2,700 1.0

Total new eligibles . . . . . . . . . . . . . . 4,506 2,600 1.4 4,679 2,700 1.3 57,642 46,800 18.1

Total demonstration enrollment. . . . . NA NA — NA NA — 302,022 197,500 76.4

Total Medicaid enrollment . . . . . . . . . . 282,844 185,709 100.0% 325,416 214,364 100.0% 383,058 258,464 100.0%

KEY: NA. Not applicable; OSIP - Oregon Supplemental Income Program; AFDC. Aid to Families with Dependent Children; FY. fiscal year.

NOTE: Percentages may not add to exactty 100.0 due to rounding error.

a me state inte~ t. ~k the Hea]th Care ~nan~ng Adminbtration (HCFA) f~ an $m~dment to the waiver tO i~pmte th~ ~igibility groups into the demonstration in oCtObW 1993.

b Th=e el~i~lity grouP were omitted from oregon’s waiver application.

c w4.3 Perant or 7,m r~pients, qualified for AFDC through the mdtilv n+ P~ram (252).

d OrWon ~nsi~rs’the gener~ ~~tam ~Plation t. ~ a ~IM#’ eligibility gr~p un~r the w~verh- it is n~ eligible fw F~era[ matding payments under current t’tde$.

SOURCE: Oregon Department of Human Resources, Offi@ of Medical Assistance Programs, Salem, OR, unpublished enrollment data, 1991.
Chapter 5--Implications for Beneficiaries ● 131

Figure %3-Oregon Medicaid Demonstration

Enrollment Projectionsa

Table 5-5-Race and Ethnicity of the Oregon Medicaid

Population, FY 1990

Thousands

3oo--

4

200 - . - . . ----- . -- . -----, ------ . . . . . . . . . . . . . . . . . . . . . . . .

120.6

1oo- - . . . . . . . . . . . . . . . . . . . . . . . . -----------------------------

81.1

I I

Year 1 Year 2 Year 3 Year 4 Year 5

FY 1993 FY 1994 FY 1995 FY 1996 FY 1997

+ New eligibles I

~ Total demonstration enrollment

---- Total program enrollment

Medicaid demonstration enrollment,

SOURCE: Oregon Department of Human Resources, office of Medical

Asistanee Programs, Salem, OR, The Gegon hfedicaid Demorrstration Waiver Apph’cxdjon, submitted to the Health Care

Financing Administration Aug. 16, 1991.

of people potentially eligible for the Oregon Medicaid program have enrolled in the past. The waiver

projections assume the same overall participation

rate of current eligibles once the demonstration is

phased in.

Oregon expects that in the waiver’s first year more

than three-quarters of the demonstration population

would be individuals and families who could qualify

for Medicaid benefits under current rules, principally through the AFDC program. Later on, current

eligibles would make up a smaller proportion of the

demonstration, approximately 59 percent.32

New Eligibiles--New eligibles, who would not

qualify for Medicaid under current rules, are forecast

to total 46,800 in FY 1993. By the final year of the

waiver, 59 percent of potentially new eligibles are

expected to enroll in the demonstration, a total of

Race/ethnicity Total Percent

Total number of eligibles . . . . . . . . . 227,198 100.0%

White, not of Hispanic origin . . . . 191,546 84.3

Black, not of Hispanic origin . . . . . 13,977 6.2

American Indian or Alaskan

Native . . . . . . . . . . . . . . . . . . . . . . . 11,921 5.2

Asian or Pacific Islander. . . . . . . . 3,972 1.7

Hispanic . . . . . . . . . . . . . . . . . . . . . 5,084 2.2

Unknown . . . . . . . . . . . . . . . . . . . . 698 0.3

NOTE: Percentages may not add to exactly 100.0 due to rounding error.

SOURCE: U.S. Department of Health and Human Services, Health Care

Financing Administration, HCFA 2082 data from the StatMca/

Report on hiedkal Care: Eljgjbles, Rec@Ms, Payments and

Servkxs, Section D (2). Eligibles for Medical Care by Age,

Race/Ethniaty, and Sex (Baltimore, MD: Dee. 24, 1990).

120,600. 33 Most of the new eligibles are “noncategorical’ ‘ and would not meet the current demographic restrictions of the Medicaid program. They

are principally single adults, childless couples, and

two-parent families.

Table 5-6 illustrates how the newly eligible population differs from current Medicaid participants.

The new eligibles are primarily a group that has been

ignored by congressional efforts to expand Medicaid

eligibility. More than half of new eligibles are

expected to be male and 63 percent would be adults

over the age of 24 years. In contrast, males make up

only 41 percent of the current eligibles who would

participate in the waiver and adults over 24 years

make up less than 21 percent. (In addition, most of

the currently eligible males are children.) Although

children under age 18 would make up 17 percent of

the new eligibles, they are already scheduled to be

phased in (slowly) to the Medicaid population.

Where Does the Oregon Demonstration Population Live?—Figure 5-4 shows Oregon’s expected

distribution of Medicaid eligibles by county in the

first year of the proposed waiver. FY 1991 data

indicate that 65 percent of Oregon’s Medicaid

participants live in the State’s eight metropolitan

counties (182).34 The remaining Medicaid population is dispersed among 25 nonmetropolitan counties.

32 H tie employer ~&te is implement~, current eligibles would make up a projected 63 percent of total demomtration emolbmt.

33 H tie employer ~date is fully implemented, new eligibles are expected to total %,@(l iII the kt year of tie ~vm.

34 A me~ow~~ ~ou~ is defm~ by tie U.S. office of -Wement and Budget ss one tit ticlud~ either: 1) a city of at l-t 50,000 residents,

or 2) an urbanized area with at least 50,000 people tbat is itself part of a group of counties with at least 100,000 total residents.
Table 5-6-Projected Oregon Medicaid Enrollment by Age and Sex, Under the Proposed Demonstration, FY 1993

Total Medicaid population Current eligibles/group subject to the waiver Current eligibles/group not subject to the waiver

Percent Percent Percent

Age Males Females Total of total Males Females Total of total Males Females Total of total

&. . . . . . . . . . . . . . 34,221 32,899 67,121 26.5% 32,108 30,849 62,957 41.870 1,600 1,537 3,137 1 .2%

6-14 . . . . . . . . . . . . 21,823 21,285 43,108 17.0 16,925 16,458 33,383 22.2 2,566 2,495 5,062 2.6

15-18 . . . . . . . . . . . 3,749 8,013 11,764 4.6 2,329 5,842 8,171 5.4 498 1,249 1,748 1.0

19-24 . . . . . . . . . . . 9,248 17,248 26,496 10.4 3,598 11,393 14,990 9.9 556 1,761 2,317 4.8

25-34 . . . . . . . . . . . 11,103 26,286 37,390 14.7 4,441 16,909 21,350 14.2 1,234 4,699 5,934 12.2

35-54 . . . . . . . . . . . 11,341 22,034 33,375 13.2 2,292 7,337 9,629 6.4 2,557 8,188 10,745 22.1

55-64 . . . . . . . . . . . 5,876 6,625 12,499 4.9 79 140 219 .1 1,915 3,404 5,318 10.9

65 and over . . . . . . 5,808 16,184 21,992 8.7 0 0 0 0.0 5,804 16,181 21,985 45.2

Total . . . . . . . . . 103,169 150,575 253,745 100.0 61,771 88,929 150,700 100.0 16,731 39,515 56,246 100.0

New eligibles General assistance

Percent Percent

Age Males Females Total of total Males Females Total of total

4 . . . . . . . . . . . . . .

6-14 . . . . . . . . . . . .

15-18 . . . . . . . . . . .

19-24 . . . . . . . . . . .

25-34 . . . . . . . . . . .

35-54 . . . . . . . . . . .

55-64 . . . . . . . . . . .

65 and over . . . . . .

Total . . . . . . . . .

513

2,332

922

4,936

5,091

5,733

3,635

0

23.162

513

2,332

922

3,969

4,410

5,907

2,885

0

20.937

1,027

4,663

1,845

8,905

9,501

11,640

6,519

0

44.100

2.3%

10.6

4.2

20.2

21.5

26.4

14.8

0.0

100.0

0 0

0 0

0 0

158 125

337 268

759 602

247 196

4 3

1.505 1.195

0

0

0

284

605

1,361

7

2.700

0.0%

0.0

0.0

10.5

22.4

50.4

16.4

0.3

100.0

SOURCE: Oregon Department of Human Resources, Office of Medical Assistance Progrsms, Salem, OR, unpublished enrollment data, 1991.
Chapter 5--Implications for Beneficiaries ● 133

ACCESS TO CARE UNDER

THE DEMONSTRATION

Access has been defined as “those dimensions

which describe the potential and actual entry of a

given population group to the health care delivery

system’ (2). Would Oregon’s demonstration enable

its participants to gain greater access to health care

services than they have at present? Two key

components to this answer are the number of people

covered and the health services for which they are

covered. As noted in the previous sections on

eligibility and enrollment, the numbers clearly show

that this proposal makes significant inroads into

resolving the dilemma of insuring the uninsured

poor. The role of benefits is examined below after a

brief review of why Oregon’s proposal may be so

valuable to the State’s uninsured poor. To examine

the potential implications of the waiver’s change in

benefits for current Medicaid eligibles, an analysis

of common diagnoses that would not be covered

under the waiver is also provided.

The Newly Insured 35

Although much of this chapter focuses on current

Medicaid beneficiaries, it is important to review the

significance of Oregon’s initiative for the uninsured

poor. While there are limited data regarding differences in health outcomes between uninsured and

insured persons, a growing body of research documents that people without health insurance are less

likely to seek medical care and, if they do, are often

more seriously ill than the insured (88, 124,263,303).

People without health care coverage are also likely

to be treated less aggressively than the insured

(88,319). The eventual effects can be unnecessary

deaths, more serious illness, and possible higher

overall costs of health care.

A recent study of more than half a million hospital

admissions found that uninsured people had a 44 to

124 percent higher risk of in-hospital mortality than

did insured people (89). In addition, uninsured

patients were sometimes treated less aggressively

and had shorter lengths of stay in the hospital. Other

studies have examined differences in how aggressively insured versus uninsured patients with AIDS,

lung cancer, and cardiovascular disease were treated

(86,87,319).

The uninsured population’s access to primary care

is also poor relative to others. Recent findings from

the National Medical Expenditure Survey (NMES)

indicate that public insurance, such as Medicaid,

improves access to care; at each income level, the

nonelderly with public insurance were about 20

percent more likely to use health services than the

uninsured nonelderly (124).36 This disparity was

found even among those who reported that they were

only in fair or poor health.

Having a usual source of care is an important

factor in predicting the use of health services (2).

NMES findings show that only 65 percent of the

uninsured population had a usual source of medical

care in 1987, compared with 87 percent of those with

any Medicaid or similar public coverage (297). In

addition, the benefits of free care have been shown

to be particularly important for low-income people

who have specific conditions with well-established

treatments (e.g., hypertension) (24). NMES data

further indicate that Medicaid coverage made a

significant difference in the use of preventive care by

preschool children. For low-income preschoolers

who would be uninsured without Medicaid coverage, a full year of Medicaid benefits was found to

increase the probability of having any well-child

visits by 17 percentage points (240).

It is apparent that, despite the restriction of coverage to medically necessary treatments above line

588, low-income uninsured Oregonians stand to

gain considerably under the proposed demonstration.

How Oregon Medicaid Benefits Would

Change Under the Waiver

One of the most controversial aspects of the

Oregon waiver proposal is its change in the scope of

health benefits for Medicaid participants. Under the

waiver, benefits would not be based on traditional

health service categories, such as hospital care,

physician services, prescription drugs, etc. Instead,

35 The OffkX of Technology Assessment is currently conducting a study e~ the relationships between technology, health insurance, and the

health care system. An interim document examining the literature on the relationship between health insurance status and health outcome will be

published in summer 1992. The full report is scheduled for publication in spring 1993.

~ The N~o~ M~c~ &Wn&~e Smey ww Wnductd in 198’7 and provides nationally representative estimates of hdth care Use fOr the U.S.

civilian noninstitutionaked population (124).
134 ● Evaluation of the Oregon Medicaid Proposal

Figure 5-4-Projected Concentration of Medicaid Eligibles in Oregon, FY 1992 (under the demonstration)

Columbia

d

Washington

/

“-+ I w ‘U’’;mm /

Sherman Hood River ,

t

Tillamook*m

Lincol

Ben

1 bos I M I I I I I I-y’d

&

Malheur

?’

f’

Isx2 10,000 or more recipients u I I I 1] 5,000-9,999 recipients

El 1 ,000+99 recipients m Fewer that 1,000 recipients

SOURCE: Oregon Department of Human Resourees, Office of Medieal Assistance Programs, Salem, OR, Tbe OregorI Medicaid Demonstration Wa’ver

Application, submitted to the Health Care Finandng Administration Aug. 16,1991.

coverage would be defined in new terms: the CT

pairs formulated by the Oregon Health Services

Commission (HSC).37 The HSC’s list of 709 CT

pairs is intended to include all primary and acute

medical care.38 The waiver proposal restricts covered health services to those falling above line 588

of the list, as well as diagnostic, ancillary, and some

mental health and chemical dependency services.39

Unlike any existing private or public health

insurance benefit package, Oregon’s Medicaid proposal does not contain a core set of basic health

benefits, nor does it guarantee any essential benefits

during the course of the 5-year demonstration. At the

outset, coverage would be clearly defined by the first

587 CT pairs. Medical and surgical treatments that

fall below line 587 would not be covered. But if at

37s= ch. 3 for MI analysis of the list and the methodology used to develop it.

3S M~@h~th ~C&micsldePndeV s~ic~wo~dbe ~Orpo~t~ into b list by &@~ 193. until that time, they would be provided under

current rules. It is not yet known how the addition of these services would affect coverage of benefits related to physical health.

~ Some ~th -ices would continue to be subjeet to prior authorhtion.
Chapter 5--Implications for Beneficiaries ● 135

any time during the course of the waiver there are not

enough funds to cover the related costs, benefits

would be cut, in descending order of priority, until

the necessary savings have been achieved.40 There is

no statutorily established line on the list beyond

which coverage could not be dropped.

Under current rules, budget shortfalls can and

have led to unexpected cuts in optional benefits and

optional eligibility groups (254). However, mandatory Medicaid benefits (see below) as well as

mandatory eligibility groups are protected from

budget shortfalls.

This section describes current Federal and Oregon

Medicaid benefit rules, compares them with coverage given implementation of the list, and assesses

the implications of the change in benefits for current

Medicaid participants.

Current Oregon Medicaid Benefits

Federal Medicaid rules permit each State to define

its own benefit package within broad guidelines. All

States are required to offer a core package of

mandatory services that includes basic hospital,

ambulatory, long-term care, and ancillary services

(see chapter 2 for a complete list). States must also

pay for coinsurance for Medicare participants with

family incomes under 100 percent of the FPL.

Although Medicaid law authorizes Federal matching funds for necessary medical services, it does not

require coverage of all medically necessary services.

Federal law defines a service as medically necessary:

. . . if it is reasonably calculated to prevent, diagnose,

correct, cure, alleviate, or prevent the worsening of

conditions that endanger life, cause suffering or pain,

result in illness or infirmity, threaten to cause or

aggravate a handicap, or cause physical deformity or

malfunction, and if there is no other equally effective

(although more conservative or less costly) course of

treatment available or suitable for the recipient

requesting the service (36).

States are required to provide services that are

sufficient in amount, duration, and scope to reasonably achieve their purpose (266). Although Medicaid

programs may place limits on services, they may not

arbitrarily deny or reduce coverage of a required

service solely because of the diagnosis, type of

illness, or condition.

Oregon currently covers a wide range of optional

Medicaid benefits, such as prescription drugs, physical and occupational therapy, certain organ transplants, and services of other licensed practitioners

(such as chiropractors, psychologists, and podiatrists) (168). (See chapter 2 for a complete list.)

Although Federal statute allows it, Oregon does not

cover adult dental services, hospice services, screening services for adults, or Christian Science nurse

services (168,301).

Oregon’s ability to finance optional benefits is

currently in question due to Ballot Measure 5, a

statewide referendum passed in November 1990.

Measure 5 calls for a rollback of local property taxes

earmarked for schools and requires the State’s

general fired to replace any revenue lost by public

schools due to these limits (250). Significant budget

reductions in nonschool State services will be

required. As a consequence, in July 1991, the State

eliminated coverage of all medically needy groups

except pregnant women and children, eliminated

coverage of adult emergency dental care, and

curtailed benefits for the medically needy aged,

blind, and disabled (259). State officials are currently evaluating how to further reduce the Medicaid

budget and are considering a number of potential

cutbacks, including dropping every optional adult

service, cutting provider reimbursement, and adding

a client copayment requirement (200).

Coverage Under the Waiver

New Benefits

The list introduces several important new benefits

for adult Medicaid participants, including preventive health services, dental care, numerous organ

transplants, and comfort and hospice care for the

terminally ill (see table 5-7).41 Because Medicaid

coverage of children is already quite extensive, the

waiver would add little to their benefit package. In

fact, all of the new demonstration benefits, except

40 s= ch. G for an analysis of program expenditures and cost kSUeS.

41 Cwmt B&dicaid p~cipan~ who are enrolled in the Kaiser F’ ermanente medical care program already receive preventive health services and

hospice care (1(M).

42 Most of the new demo~~fion bentilts are also currently available to 18- to 20-year-olds if provided within the Context of the Mly and Ptiodic

Screening, Diagnosis, and Treatrmmt @PSDT) program. See below for more information on EPSDT.
136 . Evaluation of the Oregon Medicaid Proposal

Table 5-7—Proposed New Benefits Under the Oregon Medicaid Demonstration

Type of service Condition-treatment pair(s) Affected population

Preventive services . . . . . . . . . . . . . . . . . . . . . . . . . 167 Adults

Comfort and hospice care . . . . . . . . . . . . . . . . . . . . 164 Terminally ill

Organ transplants, including heart, liver,

bone marrow, and pancreas/kidneya b c

. . . . . . . 209,214,249,294,307,31 1,365,366-368,523-4 Adults

Dental care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,166,398,479,548-50 Adults

Tissue expanders . . . . . . . . . . . . . . . . . . . . . . . . . . 49,115,136,205,258,171 ,215 Adults

Hyperbaric oxygen pressurization . . . . . . . . . . . . . 77,133 Adults

NOTE: Akt to Families with Dependent Chikfren and poverty level medical children under age 18 are already eligible for all the above services except

comforfiospice care.

a Although h~r~ung and l[ver~dney t~nsplan~ are ~rrently cover~ for chi~ren, It iS not dear whether they would be covered under the WdVer. The

hearVlung transplant CPT-4 code does not appear on the list. There is no CPT-4 code for Iivevlddney transplants.

b Tran@ant r~~pien~ ~u~ meet @&t m~~[ AigIbilIty ~te~, IJnder~rrent policy al] tran@ants, ex@@ th~e prov”kied on an emergency bi$, r~Uire

prior approval and must be provided in a transplant center that provides quality care (OMAP, 1990). Emergency transplants are subject to post-transplant

review to confirm that the patient and the transplant center met stat-set eligibility and medical criteria at the time of the transplant. This policy Is likely to

continue under the waiver.

C Llvertrans#an~ would not ~ av~labieto ~nef~iades with a~holicdr~oslst Bone marrow transplan~ WOUH not bS covered fornon-Hodgldns Iymphoma.

SOURCE: Oregon Health Services Commission, Salem, OR, Prioritlzatlon of Health Services: A Report to the Governor and Legislature, 1991.

comfort and hospice care, are currently available to

children under age 18.42

Preventive Services for Adults—The list incorporates the guidelines of the U.S. Preventive Services

Task Force in CT pair 167 (see table 5-8).43 It is clear

that this represents a significant expansion in

coverage for adults. Although State Medicaid programs have the option to cover adult screening

services, Oregon has not covered them except for

selected procedures (i.e., immunizations, Pap

smears, and mammograms).

Because many adults would be eligible for

Medicaid benefits for less than a year, it is not clear

how much they could gain from this expansion in

coverage. Quick access to appointments and actual

receipt of preventive services would be essential if

there is to be any clinical benefits from early disease

detection. If transfer out of Medicaid equates with

transfer into an employer-sponsored health plan,

there may be more potential for following up any

condition that was identified during a Medicaidfunded screening exam.

Adult Dental Care-Coverage of dental care also

makes an important addition to Oregon’s Medicaid

benefits. In July 1991, due to fiscal constraints, the

Oregon State legislature discontinued finding for

adult dental care (254).44 Up until that time, adults

were able to receive emergency dental services, and

available data indicate that those services were

widely utilized (42). In fact, the data show that,

despite Oregon’s intent to restrict dental coverage to

emergency care only, a significant volume of dental

care was funded by the Oregon Medicaid program

until the dental benefit was eliminated (42).

Organ Transplants for Adults—Under current

policy, children are eligible for a wide range of organ

and tissue transplants, including bone marrow,

cornea, heart, heart/lung, kidney, liver, liver/kidney,

and pancreas/kidney transplants (168). Adult transplant coverage is restricted to kidney and cornea

transplants. The waiver would provide additional

funding for bone marrow, heart, pancreas/kidney,

and liver transplants for adults.45 46 Given the

success of organ transplants in treating many indi4Z Most of ~new demo~~on bentil~ are also currently available to 18- to 20-year-olds if provided within the context of bmly -d p~odic

Screening, Diagnosis, and Treatment (B.PSDT) program. See below for more information on EPSDT.

43 ne U,S. ~Wentive services ‘Ihsk Force was a 20-member, nonfederal panel charged in 1984 by the Assistant Secretary for Health with reviewing

the scientiilc evidence in support of clinical preventive services and developing age-and sex-specific recommendations for their delivery (123) The guide

was presented to the U.S. Departnxmt of Health and Human Services in 1989.

44 ~n~ semices ~ funded in all but four State M~tid p~~~ (287).

M T_lat raipien~ m~t -t Stict medi~ eligibili~ criteria. Undercurrent rides, all mnsplants, ~~pt tiOse p~vided on an ~e%~cy b~~~

require prior approval and must be performed in a transplant center that provides quality care (165). Emergency transplants are subject to post-transplant

review to confii that the patient and hansplant center met OMAP eligibility and medical criteria at the time of the transplant (212). This policy is likely

to continue under the waiver.

u Bone marrow transplants would not be covered for children or adults with non-Hodgkins lymphoma. The HSC is currently considering whether

to recommend to the State legislature that the list be modi.fkd to cover bone marrow transplants for non-Hodgkins lymphoma (244). If the commission

move to take such actiou the modifkation would be subject to the final approval of the State legislature (or its Emergency Board).
Chapter 5--Implications for Beneficiaries ● 137

Table 5-8--Oregon Medicaid Coverage of Adult Preventive Services: Demonstration vs. Current Benefits

Current Oregon Medicaid coverage for

Adult preventive services benefits under the demonstration a adults during preventive visits b

Screening:

History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No

Physical exam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No

Brief mental status exam. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No

Lab/diagnostic procedures c

Nonfasting total blood cholesterol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No

Mammogram d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

Papsmear e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

For high-risk groupsf

Fasting plasma glucose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rubella antibodies g 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

VDRL/RPR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Urinalysis for bacteriuria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chlamydial testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gonorrhea culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Counseling/testing for HIV infection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tuberculin skin test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Electrocardiogram. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fecal occult blood/colonoscopy ‘ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fecal occult blood/sigmoidoscopy ‘ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bone mineral content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Counseling:

Diet/exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Substance use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For high-risk groupsf

Sharing/using unsterilized needles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sexual practice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Injury prevention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For high-risk groupsf

Back conditioning exercises .....,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fails in the elderly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prevention of childhood injury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dental health... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other primary preventive measures

For high-risk groups f

Skin protection from ultraviolet light . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discussion of hemoglobin testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discussion of aspirin therapy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discussion of estrogen replacement therapy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

No

Immunizations:

Tetanus-diphtheria booster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

For high-risk groupsf

Hepatitis-B vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

Measles-mumps-rubella vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

Pneu mococcal vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

Influenza vaccine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes

KEY: VDRURPR.Venereal Disease Research Laboratory/Rapid PIasmaReagin; i-UV. human immunodeficiency virus.

aThefrquew. ~ftheindi~dual preventivese~~~ is left toclini~ld~etion unl~othe~~ noted in otherfootnotes.

bSho~mverageforaduh~forser~@~pro~&inthemntefiofapreventivem~~inevis~.Aflofthese~c=~st~areWver~~enprov~~fordiwnost~

ratherthan screening purposes. Notealsothatchildrencurrentlyhavecomprehensive preventiveservicesccwerage underthe EariyandPeriodic Screening,

Diagnosis, and Treatment(EPSDT) benefit.

cA~~~rato~ anddiagnostic pr~~ures are ~t~ver~aspartof routine healthex~for ~uIts, tiththeexception ofpapsmearsand m~mOg~mS.

dEveVlto 2years forwomen beginning atage500r age 35 for those atincreased risk.

eEvety 1 to3years.

fcrit~a for high.fl~kgroups aredet~l~in’’Gu~etoCfln~l Prevenflve Servjms:Re@ofthe U.S.Preven~ve~~~sT~kFor~w (Seeref 123).

9Suggest~ontyforadutts,ag~ 19t039.

hsuggest~on~fma~~s, a9~@to64.

SOURCE: Office ofTechnology k@essmenL1992.
138 . Evaluation of the Oregon Medicaid Proposal

viduals, this is an important expansion in coverage

(31,32,64,210,218,262).

Liver transplants for alcoholic cirrhosis (CT pair

690) would not be covered despite success rates

similar to as those for nonalcoholic liver failure (CT

pair 366) (294,299).47 It is important to note that,

after considering available outcomes data, the

Health Care Financing Administration (HCFA)

approved Medicare payment for liver transplants for

alcoholic cirrhosis in 1991 (294; 56 FR 15006). It is

especially troublesome that the well-established and

effective medical therapy (e.g., prescription medications, special diet) for alcoholic cirrhosis (31 1) is

missing from the list altogether.

While current policy covers heart/lung and liver/

kidney transplants for children, it is not clear

whether these transplants would be covered under

the waiver. Neither joint transplant type appears

separately on the list.

Comfort and Hospice Care—The list indicates

that the demonstration would allow Medicaid funding of hospice care in Oregon for the first time.

Because the details of the hospice program are

currently under development, the scope of the

benefit is not yet known. Covered comfort care

services presumably would include at least pain

medication and pain management devices, in-home

and day care services, and medical equipment and

supplies (e.g., beds, wheelchairs, bedside commodes, etc.).

Hyperbaric Oxygen Pressurization--This costly

treatment is currently covered only for children. It

can be lifesaving for individuals seriously exposed

to carbon monoxide fumes (e.g., in a house free) (45).

It is also an important treatment for some anaerobic

infections (e.g., gangrene), decompression sickness,

and other conditions.

Tissue Expanders—Tissue expanders, also referred to as temporary inflatable devices, are widely

used in reconstructive surgery and are currently

covered for Oregon Medicaid children. The principal advantage of this technology is that it allows the

use of adjacent tissue in restoring a congenital or

acquired deformity (201). Tissue expanders are used

throughout the body in all age groups, particularly in

breast reconstruction, head and neck reconstruction,

and correction of defects in the scalp and extremities

(133).

Coverage of Diagnostic and Ancillary Services

The State intends that every Medicaid participant

receive all “services and tests required to identify,

within reason, the patient’s condition to be treated’

(emphasis added) (193). While this policy pertains

to all patients, even those who are ultimately

diagnosed with a below-the-line condition, it is not

clear what limits would be placed on diagnostic

procedures.

There is reason to be concerned about access to

some diagnostic procedures provided in a hospital

setting. Although OMAP intends to do so, it has not

yet developed a mechanism for paying for inpatient

diagnostic care for CT pairs below line 587 (212).

This is a critical matter, because Oregon hospital

reimbursement is based on diagnosis-related groups

(DRGs) and does not allow diagnostic or any other

type of inpatient service to be “carved out” for

payment purposes. Without a change in current

hospital billing and payment rules, patients with an

uncovered condition might not receive (or the

hospital might not be paid for) related inpatient

diagnostic services. A significant proportion of

demonstration participants may be affected since,

for many, inpatient care would be provided on a

subcontracted or fee-for-service (FFS) basis.

There is a similar incongruity between practical

billing matters and the coverage of some ancillary

services. In this case, the effect may be to enable

access to uncovered services. Ancillary services,

such as physical therapy, prescription drugs, and

medical supplies and equipment, are not included on

the list, but they would be fully covered if associated

with a covered CT pair and found to be medically

necessary based on Oregon’s usual Medicaid rules.

(See table 5-9 for a list of covered ancillary services.)

However, it is not clear whether the State would be

able to fully restrict the coverage of certain ancillary

services to those associated with CT pairs 1 through

587. Pharmacies, for example, may not have the

means to easily identify which CT pair relates to a

47 me HSC fi currently considering whether to recommend to the State legidature that the list be modi.fkd to cover liver transplants for alcoholic

einilosis (244). If the Commission moves to take such actiou the mod.ifkation would be subjeet to the fd approval of the State legislature (or its

Emergeney Board).
Chapter 5--Implications for Beneficiaries . 139

prescription presented by a Medicaid patient participating in the demonstration.%

Early and Periodic Screening, Diagnosis, and

Treatment (EPSDT)

The EPSDT program was broadened considerably

and has been described as the most expansive

preventive services program for children in the

country (267). The Omnibus Budget Reconciliation

Act of 1989 (OBRA-89) amendments dramatically

expanded Medicaid coverage of children and adolescents by essentially eliminating any State Medicaid

limitations on diagnosis or treatment for any health

condition identified during the course of an EPSDT

screen as long as the services are within the limits of

Federal Medicaid guidelines and are deemed medically necessary (271 ,272).

Coverage of children’s preventive services would

not change under the proposed demonstration, but

the Federal mandate to treat all conditions identified

during the course of an EPSDT screening visit

would be restricted to CT pairs 1 through 587. It is

difficult to say whether this threatens an important

gain for children’s health under the Medicaid

program. There are no reliable data describing

access to EPSDT services among Oregon’s Medicaid children. Nor is it known to what extent these

children are screened by an EPSDT provider and

then actually receive followup treatment. Some

common medically necessary pediatric services

would not be covered under the waiver, but most are

acute conditions that are not the focus of EPSDT

screens (see utilization data below).

Uncovered Conditions4950

A CT pair’s low rank on the prioritized list is

intended to reflect lower relative importance but not

necessarily complete ineffectiveness. Consequently,

it should not be surprising that some below-the-line

CT pairs include conditions with effective therapies.

Nevertheless, most uncovered CT pairs do not have

significant clinical implications (see table 5-10).

Table 5-9-Oregon Medicaid Coverage of Ancillary

Services Under the Proposed Demonstration

Anesthesia services

Case management services, i.e., services that are designed

to obtain health care services necessary to maintain an optimal

level of physical and emotional development and health.

Examples of case management services include: maternity

case management that involves management of non medical

services which address social, economic, and nutritional

factors; and targeted case management for at-risk/vulnerable

children, individuals with catastrophic illness or injury such as

AIDS or cancer, Individuals with developmental disorders, and

individuals with chronic mental illness.

Home health services, i.e., skilled nursing; home health aide

services; speech, occupational, or physical therapy; and

equipment and supplies provided through a certified home

health agency.

Laboratory services

Medical supplies and equipment prescribed by a practitioner

(e.g., prosthetic devices, wheelchairs, respirators, ventilators,

apnea monitors, diabetic testing strips, ostomy supplies,

oxygen and related equipment, and ophthalmic materials).

Nutritional counseling (e.g., diabetic counseling, counseling

for improved pregnancy outcomes).

Personal care services (e.g., health care aide services)

Physical, occupational, speech, language, hearing, and

vision therapy

Prescription drugs (to include outpatient, inpatient, intravenous, and enteral therapy and limited over-the-counter drugs)

Private duty nursing services

Radiology and Imaging services

Transportation, meals, Iodging, and day care necessary for

recipients to access revered services

SOURCE: Oregon Department of Human Resources, Office of Medical

Assistance Programs, Salem, OR, The Oregon Medicaid Demonstration Waker Application, submitted to the Health Care

Financing Administration Aug. 16, 1991.

In fact, some below-the-line CT pairs clearly

reflect treatments that are generally considered

ineffective or would make little difference to exclude from coverage given current clinical practice.

This is particularly true of three neonatal-related CT

pairs: intraventricular and subarachnoid hemorrhage

of fetus or neonate (CT pair 687), extremely

premature (under 23 weeks gestation) and low-birthweight (under 500 grams) infants (CT pair 708), and

@ OMAP and COOpmS & Lybr~d (which perf’ormd many of the fwncial analyses for the State) have recognized the dfilc~ty iII detex how

pharmacy claims would be handled relative to the prioritized list. They increased the demonstration’s projected list-related costs by 5 percent to account

for this problem (see ch. 6),

49 ~S a~ysis is based on the latest available version of Oregon’s list of prioritized health semices. It is OTA’S understanding tit tie Oregon H~ti

Services Commission is preparing to vote on a number of changes to the list. The relevant list changes are noted in footnotes below.

~ III addition to tie refer~ms noted in the tex~ much of the analysis related to uncovered conditions is W on contract work prepared fOr ow

by D. Asch J. Pattoni A. Giardino, and M.A. Schuster (see refs. 14,80,235).
140 ● Evaluation of the Oregon Medicaid Proposal

Table 5-10-Examples of Below-the-Line Condition-Treatment (CT) Pairs With Limited

Anticipated impact on Beneficiaries’ Health

CT pair Description Comments Referencea

606

610

639

646

649

671

681

687

695

708

709

Hepatorenal syndrome--medical therapy

Cancer of Iiver and intrahepatic bile ducts--liver

transplant

Herpes simplex without complications--medical

therapy

Lymphedema--medical therapy, other

operation on lymph channel

Diaper or napkin rash-medical therapy

Preventive services for adults with questionable

or no proven effectiveness--medical therapy

Gallstones without cholecystitis--medical

therapy, cholecystectomy

Intraventricular hemorrhage and subarachnoid

hemorrhage of fetus or neonate-medical

therapy

Acute upper respiratory infection and common

cold-medical therapy

Extremely low birth weight (under 500 gm) and

under 23 week gestation-life support

Anencephalous and similar anomalies and

reduction deformities of the brain-life

support

Treatment is usually ineffective

Treatment is usually ineffective

Treatment is often ineffective

Treatment is usually ineffective

Treatment advice can be offered during the

diagnostic visit; complications can be treated

using other CT pairs

Services are not effective; benefit is not covered

under the current program

Inappropriate treatment

“Empty” CT pair b

Self-limited condition; advice regarding relief of

symptoms can be provided during the

diagnostic visit

“Empty” CT pair b

“Empty” CT pair b

(Punukoilu, 1990) (208)

(Trans. Proceedings,

1991) (299)

(Hurst 1988; Edwards,

1991) (56,99)

(Hurst, 1988) (99)

(USPSTF, 1989) (123)

(Hurst, 1988) (99)

(Ehrenhaft, 1991) (57)

(Hurst, 1988) (99)

(Ehrenhaft, 1991) (57)

(Ehrenhaft, 1991) (57)

a SSe referen~s 56, 57, 99, 123, 20S, and 299 for full UtatiOflS.

b me term ~~em~y~~ is “~~ h-et. ~wfi~ CT pair9 that are not [ike~ to -r,-e the ~mpan~ng text for further explanation of the rehtSd CT pairS.

SOURCE: Office of Technology Assessment, 1992.

anencephalous and similar anomalies and reduction

deformities of the brain (CT pair 709).51

Extreme prematurity and very low birth weight

are very rare; only an estimated five infants (regardless of insurance status) who have both characteristics are born in Oregon each year (57). Similarly,

very few anencephalic infants (13 in 1989) are

delivered annually in Oregon. Extremely premature

and underweight infants and anencephalic infants

are not viable, and medical treatment, other than

comfort care, is typically not provided. Most physicians agree that a very short gestation with delivery

at less than 23 weeks makes any birth virtually

nonviable (215). Although the exact time at which

the fetus becomes viable is not known, before 23

weeks of gestation the skin is gelatinous and the

kidneys and several other organs are not developed

sufficiently to sustain life (57,58,215). In fact, these

infants are usually not admitted to Oregon’s neonatal intensive care units. As a result, their low priority

on the list should have little, if any, effect on

provided services or cost of care.

Intraventricular hemorrhages are fairly common

among very premature and low-birth-weight infants.

Each year, these hemorrhages affect an estimated

110 low-birth-weight (under 1500 grams) infants

cared for in Oregon’s neonatal intensive care units

(NICUs) (215). Of these, about 45 infants might

suffer severe life-threatening hemorrhages that are

often accompanied by stroke, seizures, and shock. If

extensive brain damage occurs, there is little medicine can offer to improve the diagnosis. Since there

is no therapy for the intraventricular hemorrhage per

se, the neonatologist’s principal goal is to stabilize

51 It is bpo~t to note that iftie waiver is approv~, the State intends to eventually request an amendment to include the disabled population. NOW,

under current waiver rub, all infants with birth weights of less than 1200 grams would be exempt from the demonstration. This is a result of Social

Security Administration (SSA) regulations tbat define as disabled any infants of this size, at least until their first birthday (CFR 416.924b). Infants who

are at least 4 weeks premature and weigh at least 1,200 grams but less than 2,000 grams we similarly considered disabled by 55A regulations.
Chapter 5-Implications for Beneficiaries . 141

the infant. Typically, the infant would be maintained

on life support equipment while his or her condition

is watched. Infants’ treatment in the NICU continues

after a hemorrhage much the same as before the

hemorrhage occurred. Most importantly, all the

comorbidities that these extremely premature infants experience are covered by CT pairs much

higher on the list (e.g., CT pair 22). Consequently,

the demonstration is not likely to have any impact on

the care or cost of treating these infants.

There are also a number of clinically valuable

below-the-line CT pairs that are not now covered by

the Medicaid program. For these, implementation of

the waiver would make no difference at all. Examples include bone marrow transplants for adults with

non-Hodgkin’s lymphoma (CT pair 691),52 liver

transplant for alcoholic cirrhosis of the liver (CT pair

690), breast reconstruction for mastectomy patients

(CT pair 600), and infertility services (CT pairs 598,

602, 603, and 696) (113,274,285,299).

But, at least 25 of the below-the-line CT pairs

represent medical conditions that are currently

covered and in the absence of treatment have serious

clinical consequences .53 Ten include conditions that

have no above-the-line alternative treatments; 15

involve diagnoses in CT pairs that could possibly be

upcoded by a physician to a covered CT pair (see

tables 5-11 and 5-12). Five below-the-line CT pairs

include currently covered life-threatening diagnoses

for which there are effective treatments for at least a

subset of those who are affected; these include

impetigo herpetiformis (CT pair 591),54 myasthenia

gravis (CT pair 593),55 Schmidt’s syndrome (CT

pair 640), viral pneumonia (CT pair 669), and bone

marrow transplant for children with non-Hodgkin’s

lymphoma (CT’ pair 691) (113,131,233,294,311).

Treatment for some uncovered conditions, such as

trigeminal nerve disorders (CT pair 592) and chronic

pancreatitis (CT pair 703), can mean relief of

disabling pain for some of the affected patients

(10,31 1). Treatment of other uncovered conditions

can be completely curative for some of those

affected, for example CT pair 615—focal surgery for

generalized convulsive or partial epilepsy (67298,311).

While there is no effective treatment for CT pair 609,

amyotrophic lateral sclerosis (ALS), patients with

this disease live longer and better lives when the

complications of the disease are managed (311).56

One below-the-line CT pair (678), removal of

viral warts, can be an important preventive measure

against cervical and anal cancer (317).57 But treatment of condyloma acuminatum, a type of viral wart,

would not be covered unless located on the cervix

(CT pair 171), even though it commonly affects

males and in women can be found on the vaginal

wall or external genitalia as well as the cervix.

Condyloma acuminatum often results from the

human papillomavirus (HPV), a common sexually

transmitted disease that is associated with cervical

and anal cancer (317). I-WV has been found to be

common among certain groups of adolescents (271,272).

There are some excluded CT pairs that although

cosmetic can have important psychologic and social

implications. For example, some dermatologic diseases included in CT pair 675 can cause significant

psychologic and social disability and can be fully or

partially responsive to therapy (206).

Common Medical Conditions Among

Oregon Medicaid Beneficiaries

How often would serious treatable below-the-line

conditions actually occur among those in the demonstration population? Although the State has not

projected the frequency of uncovered conditions

under the demonstration, this may be answered in

52 It should be not~ tit children would lose coverage for bone marrow transplants for non-Hodgkin’s lymphom.a.

53 Given av~~ble da~ it is not possible to es~te the number of individuals who might be affected by these uncovered CT p~. However, W

the below sectio~ “Common Medical Conditions Among Oregon Medicaid Beneficiaries,” for an analysis of recent Oregon Medicaid beneficiaries’

most frequent below-theline diagnoses.

w ~Ptigo ~WMomis is a me condition @t CWI affect Prewnt women. Whether a physician would interpret it ss a covered condition b~x

the patient is pregnant would depend on the level of detail and direction included in the provider guidelines that are ultimately developed by the Oregon

Medicaid pm-.

55 me HSC is sch~ul~ to vote on whethm to move treatment of myastheti gravis (CT pair 593) above the line to between CT pfi 159 ~d 1~.

S6 It is not cl- w~ch -~~tiom of~~ ~tend~ @ be ~clud~ ~ ~pfi G@l. ~y of tie most common conditions rehItd tO ~,

including respiratory failure, bacterial pneurno@ bed sores, and phlebitis, are in above-the-line CT pairs. Whether a physician would feel free to treat

these complications may depend on the level of detail and direction included in the provider guidelines that are ultimately developed by the Oregon

Medicaid pm-.

57 me HSC is ~h~ul~ to vo~ on rel~e@ CT p~ 171 (dysp~ia of cerv~ ~d ~rvic~ CXUC~OIIM in si~) to include W genital W-, hchd@

condyloma acuminatum.
Table 5-11—Examples of Uncovered Condition-Treatment (CT) Pairs With Clinical Significance

and No Possible Alternatives for Coveragea b

CT pair Description Affected population Commentsc

592

593

600

615

640

660

675

678

690

691

Trigeminal nerve disorder--medical and

surgical treatment

Myasthenia gravis--medical therapy,

thymectomy d

Absence of breast after mastectomy as

treatment for neoplast--breast

reconstruction

Generalized convulsive or partial epilepsy

without mention of impairment of

Consciousness--focal surgery

Testicular and polyglandular dysfunctionmedical therapy

Internal infections and other bacterial food

poisoning-medical therapy

Vitiligo, congenital pigmentary anomalies of

skin--medical therapy

Viral warts--medical therapy, cryosurgeryf

Alcoholic cirrhosis of liver-liver transplantg

Non-Hodgkin’s lymphoma--bone marrow

transplant (5-6 loci match)h

Adults

Children and adults

Women

Children and adults

Adults

Children and adults

Children and adults

Children and adults

Adults

Adults

Some patients experience painful and frequent attacks that do not respond to medication and require

transection of the nerve for relief, while other patients will have an occasional attack that is effectively

treated with medications (31 1).

Medical therapy (i.e., prescription medications and plasmapheresis) and thymectomy are often effective for

this potentially fatal disorder (31 1).

This cosmetic procedure may be of great psychological importance for some patients (285). Treatment is

not now covered under Medicaid.

chemotherapy (more than on-halt fail to respond) (1 13). About on~third of these patients are able to

sustain a p~o~ed disease-free period with bone.mahw transplantation. .

NOTE: The above are examples of CT pairs that OTA considers to be of particular clinical significance. Individual clinicians might select others as well.

a The @egon H~[th ~~~ ~mml=i~ ~ ~~ul~ to vote on a number of changes to the pri~tiz~ list. The potential chang~ aff~ting this table are detailed in the footnotes bbw,

b In ~itim t. the referem= not~ in t~ a~ve ~mmn~, much ~ th~ ta~e ~ ako H on Wntract work prepared for OTA (~ refs. 14,80, 235).

c Numbers in parenth~es are references. See reference list at the end of this ~port.

d The HSC is S&~LJM to vote on moving this CT pair above the Iifle.

e The H* is ~~1~ ~ vote on adding a new abov~th~ine CT p~r for d~o~ers of fluid, el~tro[yte, and add base balance (lC~~M ~ 276). This WOUH dbw therapy fOr the

dehydration sometimes experienced by patients in this CT pair.

f The H= ~ ~~ul~ to vote on relabeling this CT p~rto ind~e on~ n~enital warts and al= CT @r 171 (dy@asia of ce~x and cetical cardnoma in titu) tO iflcklde ali genital WarfS

including condyioma accuminatum.

9 The HSC is currently considering whether to recommend to the State legislature that the list be modified to cover liver transplants for alcoholic arrhosis (ref. 244). If the Commission moves

to take such action, the modification would be subject to the final approval of the State legislature (or its Emergency Board).

h The Hsc is ~rren~ ~n~riW ~het~r to rmmmend to the state legi~ature that the list bS modified to cover bone marrow tm~p~an~ for non-Hodgtins lymphoma (ref. 244). ~ the

Commbsion moves to take such action, the modification would be subject to the final approval of the State legislature (or its Emergency Board).

SOURCE: Office of Technobgy ksessment, 1992.
Table 5-12-Examples of Uncovered Condition-Treatment (CT) Pairs With Clinical Significance

and Possible Alternatives for Coveragea b

CT pair Description Affected population Commentsc

591 Impetigo herpetiformis and subcorneal pustular Pregnant women,

dermatosis--medical therapy adults

609 Amyotrophic lateral sclerosis (ALS)--medical Adults

therapy

619 Congenital anomalies of the ear without Children

impairment of hearing- otoplasty, repair

and amputation

635 Disorders of function of stomach and other Adults

functional digestive disorder--medical

therapy

643 Chronic bronchitis--medical therapy

656 Candidiasis--medical therapy

Children and adults

Children and adults

663 Acute tonsillitis-medical therapy and acute Children and adults

670 pharyngitis and laryngitis and other

diseases of vocal cords-medical therapyd

667 Aseptic meningitis-medical therapy Children and adults

Impetigo herpetiformis is a rare condition that can affect pregnant women (and more rarely) other adults

(131). It can be fatal, but recent literature suggests that there maybe treatment options available.

Whether a physician would interpret it as a covered condition when the patient is pregnant would

depend on the level of detail and direction included in the provider guidelines that are ultimately

developed by the Oregon Medicaid program. Subcorneal pustular dermatosis is a rare disease that may

occur in association with immunologic disorders (51). It is a recurrent problem that may respond, at least

temporarily, to drug treatment. Such uncommon and diagnostically difficult conditions could possible

be treated by using a covered CT pair (e.g., CT pair 224) that includes bullous dermatoses.

While there is no effective treatment for the direct effects of ALS, patients with this disease live Ionger and

better Iives when the complications of the disease are managed (31 1). It appears that respirator support

of ALS patients may be covered in CT pair 69 (respiratory failure) or CT pair 112 (adult respiratory

distress syndrome). Other common conditions among ALS patients (e.g., pneumonia bedsores, and

phlebitis) are in above-the-line CT pairs.

Severe malformations of the outer ear occur rarely but can result in very disfiguring malformations (e.g., an

extra ear) (27). Coverage for surgery for an ear malformation associated with other defects (e.g., cleft

palate) might be possible.

This CT pair includes postsurgical peptic ulcer patients who develop complications. Without treatment,

these patients may have abdominal pain, difficulty eating, poor nutritional status, and possibly shorter

life expectancies than if treatment was available (31 1). Treatment generally involves medications and

dietary counseling (some patients require additional surgery) (233). Some patients could possibly be

covered for treatment under CT pair 152 (ulcers, gastritis, and duodenitis).

Chronic bronchitis is a common disease that lies on a continuum with other lung diseases including

emphysema (CT pair 306) and asthma (CT pair 151 ). Treatment reduces symptoms (cough and

shortness of breath) and exacerbations of the illness. Without treatment, many more patients would be

expected to have serious acute exacerbations (9). It would be easy for physicians to facilitate coverage

of patients with chronic bronchitis by using alternative diagnostic codes in related higher ranked CT

pairs.

Treatment for candidiasis is imperative in patients such as those with HIV infection or others who are

undergoing chemotherapy for cancer (46,205). Immunocom promised patients would be covered in CT

pair 255. However, it is not dear what evidence of immunocompromised status would be required to

ensure coverage. This issue is especially important for HIV-positive patients whose HIV status has not

been confirmed.

These CT pairs include many minor or self-limited conditions but also include abscesses and cellulitis, which

require treatment to prevent serious systemic infections (311). In addition, it is unclear whether the

common clinical practice of prescribing antibiotics for patients presenting with sore throat while awaiting

diagnostic results of throat culture (for possible strep infection) could be continued.

Most viral infections included in this CT pair are self-limited and require no treatment (16). They can,

however, cause pain or discomfort warranting use of non-steroidal anti-inflammatory drugs or mild

narcotics (e.g., codeine). In rare cases, these infections can cause serious destabilization that can

require intravenous fluids and cardiopulmonary support (99). Until a definitive diagnosis is made,

patients are often provisionally treated for bacterial meningitis for several days while awaiting culture

results. It is unclear whether such treatment would be covered.

(continued on nextpqe)
Table 5-12—Examples of Uncovered Condition-Treatment (CT) Pairs With Clinical Significance

and Possible Alternatives for Coveragea b--Continued

CT pair Description Affected population Commentsc

668

669

688

693

702

703

Infectious mononucleosis--medical therapy

d

Other nonfatal viral infections-medical

therapy d

Cancer of various sites with distant metasteses

where treatment will not result in a 10

percent 5-year survival--medical and

surgical treatment

Congenital cystic lung, severe--lung resection

End-stage HIV disease-medical therapy

Chronic pancreatitis--surgical treatment (703)

Adolescents and

young adults

Children and adults

Children and adults

Infants

Children and adults

Adults

Infectious mononucleosis is generally a self-limited disease that requires no specific therapy (1 6). When

a patient’s throat is so sore that fluid intake is inadequate, however, intravenous fluids and

hospitalization may be required. Whether such supportive measures to prevent dehydration and

malnutrition would be covered is unclear. Treatments for some, but not all of the complications

associated with infectious mononucleosis, might be covered by using above-the-line CT pairs. These

complications include respiratory distress, thrombocytopenia, hemolytic anemia, and necrologic

complications.

One condition included in this CT pair, viral pneumonia can be life-threatening especially for children who

were born prematurely or children with congenital heart disease (1 6). There is no specific treatment for

viral pneumonia but some children need hospitalization for intravenous fluids, oxygen, or even assisted

ventilation (16). Newborns and children with congenital heart problems may possibly be treated by

using an above-the-line CT pair.

In practice, it is difficult to determine when a patient is at this stage of cancer. Many patients would probably

be treated for secondary illnesses that appear above the line (e.g., bacterial pneumonia).

Mild to moderate forms of this condition appearinCTpair212. It is clinically difficult to distinguish the

degrees of severity of the cystic lung, however, and clinicians would have wide latitude in determining

whether to treat a patient (27).

It is unclear why end-stage HIV disease, but not end stages of other diseases (e.g., heart failure), has been

listed separately toward the bottom of the list. In practice, it is difficult to determine when a patient is in

the end stage of HIV disease. There are numerous opportunities for finding coverage to treat patients,

including: CT pair 156 (HIV disease), CT pair 255 (opportunistic infections in immunocompromised

hosts), CT pair 238 (pneumocystis carinii pneumonia), and CT pair 257 (cancer of skin, treatable

[excluding malignant melanoma]).

The Predominant manifestation of chronic pancreatitis is pain (31 1). Medical therapy, which is covered in

CTpair317, is often ineffective for patients with severe pain (307). A common cause of pancreatic pain

is pseudocyst, which is covered in CT pair 370. This CT pair includes a smaller subset of patients with

chronic pain who would benefit from removal of all or part of their pancreas (10). -

NOTE: The above are examples of CT pairs that OTA considers to be of particular clinical significance. Individual clinicians might select others as well.

a The ~won ~alth ~~as ~mission is~edul~to vote on a number of techni~l changes to the prioritiz~ list. The potenti~ chang~ ~fecting this tab[e are detailed in the fodrlotes

b ~’”itim t. the r~erem not~ in the above commen~, mudl of this ta~e is a~ow on contract work prepared for the OTA (S8S refs. 14,60, 235).

c Num~rs in parentheses are references (see reference list at the end Of this report).

d The HSC is ~~u~ t. ~te on ~iW a new abov~th~line CT @r for diso~rs of fluid, el~rolfie, and acid ~~knce (lC~~M code 276). This WOUld allow therapy for the

dehydration sometimes experienced by patients in this CT pair.

SOURCE: Office of Technobgy -ssmen~ 1992.
Chapter 5--Implications for Beneficiaries ● 145

part by examining the most common diagnoses

among current Oregon Medicaid beneficiaries. To

pursue this question, OTA asked the Oregon Medicaid program’s actuarial consultant, Coopers &

Lybrand, to provide frequency rankings of the most

common principal diagnoses among current Oregon

Medicaid beneficiaries who would be subject to the

waiver. These data are described below and are

based on actual Oregon Medicaid claims paid in FY

1989.58

Data Limitations

There are clear obstacles to identifying current

utilization of services. In recent years, more than half

of the Oregon AFDC population (approximately

51,500 AFDC recipients in FY 1989) have been

enrolled in mandatory health maintenance organization (HMO) or physician care organization (PCO)

prepaid health plans (169). Since historical utilization data is typically drawn from FFS care claims

processing data, limited information is available to

describe how this population uses health services.59

No utilization data are currently available for the

HMO enrollees, and only inpatient utilization records can be analyzed for PCO members. This

analysis examines the use of services by PLM

women and children, AFDC recipients who receive

FFS care, and general assistance adults.60 While all

these Medicaid participants would be subject to the

rules of the waiver, using this FFS database to

project the dynamics of a managed care system is

obviously problematic.

Common Principal Diagnoses Related to

Inpatient Hospital Services

The most common inpatient principal diagnoses

in FY 1989 are ranked in tables 5-13 and 5-14.6162

Given that current Medicaid eligibility rules favor

pregnant women and young mothers, it is not

surprising to find that more than 72 percent of

hospital stays among current participants (who

would be subject to the waiver) were for newborns

or pregnancy-related conditions.

A significant number of discharges (i.e., 181 for

all ages and 150 for children) among the most

frequent conditions were primarily for diagnostic

and observational services and would be covered

under the waiver.

63 These include stays for abdominal pain, convulsions, lack of expected normal

physiological development, pyrexia of unknown

origin (i.e., fever), and miscellaneous respiratory

abnormalities.

Also relatively common were hospitalizations

related to diagnoses that are currently missing from

the CT pair list; these include 124 hospital stays for

volume depletion (e.g., dehydration and blood loss)

and nonspecific urinary tract infections.64 65 These

conditions are not included in the list because of

their lack of specificity. Nonetheless, they are very

frequently coded conditions, and it is not clear how

they would be handled during the demonstration.

Inpatient Care Below Line 587-Six of the most

frequent principal diagnoses (or diagnostic categories) would not be reimbursable, given current

coding practices, because they relate to CT pairs

below line 587 (see table 5-13). An estimated 407

discharges relate to these low priority conditions; the

vast majority were pediatric cases. More than 40

percent of these below-the-line hospital stays were

58 @egon’5 fiscal year extends from JulY throu@ June.

w The U.S. ~ne~ ~oun~offlce is currently conducting an in-depth review of access to managed care services by Oregon’s Medictidrecipients.

60 Coverage for hospi~ inpatient care for general assistance recipients WaS eliminated in AP~ 1989.

61 Fquency of ~@ow5 WU ~li~ by co~ting tie ~lat~ number of hospi~ discharg~. hlewbo~ pregnancy-relatti, and some other diag130StiC

codes were aggregated into larger diagnostic groups to allow analysis of a wider range of diagnoses. See tables 5-13 and 5-14 for fkrt.her details.

62 AEI tiportant caveat is necessary before exarnin@ these datm the total discharges reported here represent the number of cases assigned to the

specific International Classification of Diseases, 9th Edition, Clim”cal Modification (ICD-9-CIU) codes appearing in tables 5-13 and 5-14. They do nor

show the total number of cases that would fall into each CT pair because most CT pairs include more than one diagnostic code. Nor do they reflect any

utilization by HMO enrollees. Thus the data probably underestinwte the number of related discharges that would not be covered during the demonstration.

See ch. 3 for a more detailed description of CT pairs and the prioritizcxi list.

63 Di~ostic ~rvices are COVeUXI under a hypothetical CT pair O that doesn’t actually SPPMI On tie list. ‘‘CT pair O“ is a designation used to allow

reimbursement of diagnostic savices for inconclusive diagnoses (98).

64 me HSC is s~h~~~ t. vote on adding a new above~eline CT pair betw~n CT pairs 15A and 155 for disorders of fluid, ekctrolyte, and acid

base balance (ICD-9-CM 276) that would allow therapy for dehydration.

65 ~o~r Comon diWosis, ~ef &p~eSSIVe ~ction ~~-9-~ 309.()), was also miss~ b~awe rnenti h~th conditions have not yet been

incorporated into the list.
146 ● Evaluation of the Oregon Medicaid Proposal

Table 5-1 3-inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to the Proposed Demonstration:

Most Common Principal Diagnoses, FY 1989a

Estimated

Rank by CT ICD-9-CM number of Percent of

frequency pair(s) diagnosis code Description of principal diagnosis discharges total

1

2

3

4

5

5

6

7

8

9

10

11

12

13

14

15

16

17

18

18

19

20

21

22

23

21

21

21

21

16

1

21

643

19,106

1

10

107

0

5

0

— f

13,537

14

669

660

695

588

A

669

-J

d

650

—e

574.00,.10

486

V31.0

493.90,.91

774.6,770.8

466.0,.1

633.1

558.9

780.3,.6

540.9

789.0

276.5

614.3,9

590.10

309.0

079.9

008.8

465.9

722.10

599.0

480.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-. . . . . - -.. -- - . Single liveborn

Pregnancy, childbirth, specified complications

Pregnancy, childbirth, normal delivery

Complications of pregnancy, without delivery

Calculus of gallbladder with cholecysitis

Pneumonia, organism unspecified

Twin birth

Asthma, unspecified

Conditions of the perinatal period

Acute bronchitis and bronchiolitis

Tubal pregnancy

Other and unspecified noninfectious gastroenteritis and colitis

General symptoms (convulsions, pyrexia)

Acute appendicitis

Abdominal pain

Volume depletion

Pelvic disease

Acute pyelonephritis, without lesion of renal medulary necrosis

Brief depressive reaction

Unspecified viral infection

Intestinal infection due to other organism, not elsewhere classified

Acute upper respiratory infection

Displacement of lumbar intervertebral disc, without myelopathy

Urinary tract infection, site unspecified

Pneumonia, viral

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,511

7,651

1,698

869

189

189

172

164

152

147

109

102

95

94

86

83

74

70

56

56

52

48

47

41

40

20,895

32.54

28.91

6.42

3.28

0.71

0.71

0.65

0.62

0.57

0.56

0.41

0.39

0.36

0,36

0.33

0.31

0.28

0.26

0.21

0.21

0.20

0.18

0.18

0.15

0.15

78.95

KEY: CT - condition-treatment; ICD-9ZM - International Classification of Diseases, 9th Edition, Clinical Modification; FY = fisoal year.

NOTE: “CT O“ is used to designate inconclusive diagnoses to allow reimbursement for diagnostic services.

a ficl~es Ka~er Permanence Medicaid enrollees.

b Only 87 percent of d~ms were available for analysis; total discharges were estimated to refl~t 100 Pement.

c lnd~~ -s: V30.0, V30.00, V30.01, V30.1.

d lnd~es -s: 641.21,642.31,642.41, 642.51,642,91, 6~.21 ,645.01,646,61,647.61 ,64.21, 6~.81 , 6~.91 ,651.01,652.21,652.81 ,653.41,654.21,

656.01,656.11,656.31, 656.41,656.01,656.11, 658.21,660.01,660.11, 660.31,660.41,661.01, 661.10, 661.21,661.31,662.21, 663.11,663.21,663.31,

664.01, 664.11,664.21, 664.31,665.41, 665.51, 666.12,669.51, 669.81,670.04.

e lnd~es cocks: 642.43, 643.03, 643.13, 644.03, 644.13, 646.63, 648.83, 648.93.

f Th~e m&s are missing from the list.

SOURCE: Coopers & Lybrand, San Francisco, CA, unpublished data drawn from paid Oregon Medicaid claims, 1991.

for nonspecific asthma diagnoses that under the

demonstration would be coded into CT pair 643.

More specific asthma codes appear in the much

higher priority asthma CT pair 151. Presumably,

under the demonstration, providers could assign

such hospital stays to covered CT pairs by providing

more specific codes in the patient’s medical record.

(It is important to point out that the frequent use

of nonspecific codes for asthma and other common

diagnoses is not unique to Oregon physicians (232).)

Low-priority viral infections led to 107 discharges, which would be coded into CT pair 669 (see

table 5-14). Various viral pneumonias accounted for

61 pediatric hospitalizations that would not be

reimbursable under the waiver. Most children with

viral pneumonia recover uneventfully, although the

course of the illness maybe prolonged, especially in

infants (16). There is no specific treatment for viral

pneumonia, but some children need hospitalization

for intravenous fluids, oxygen, or even assisted

ventilation (16). In many cases, patients are given

antibiotics if bacterial pneumonia is suspected.

During the demonstration, it is not clear whether

children with these diagnoses would receive medically necessary treatment. Estimated hospital payments for these diagnoses totaled $123,811 in FY

1989 (see tables 5-15 and 5-16).

Fifty-two discharges were for nonclassified intestinal infections (i.e., ICD-9-CM code 008.8) which

relate to CT pair 660. Forty-three of these were for

children under age 18. There appears to be no

opportunity to upcode such diagnoses to more
Chapter 5--Implications for Beneficiaries ● 147

Table 5-14-inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to the Proposed Demonstration:

Most Common Principal Diagnoses for Children Under Age 18, FY 1989a

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

21 A

21 A

19am,lm A

21 V31.0

21 650

1 486

1 466.0,.1

643 493.90,.91

0 780.3,780.6,786.09

107

21

A

669g

5

669

695

660

146

0

151

8

-1

9

1

-J

558.9

276.5

480.1,.9

540.0,.9

079.9

465.9

008.8

750.5

783.4

493.00,493.01

464.4

599.00

376.01

485

V58.I

Single Iiveborn

Pregnancy, childbirth, specified complications

Conditions of the perinatal period

Twin birth

Pregnancy, childbirth, normal delivery

Pneumonia, organism unspecified

Acute bronchitis and bronchiolitis

Asthma unspecified

General symptoms (other respiratory problems, convulsions,

pyrexia)

Other and unspecified noninfectious gastroenteritis and colitis

Complications of pregnancy, without delivery

Volume depletion

Pneumonia, viral

Acute appendicitis

Unspecified viral Infection

Acute upper respiratory infection, unspecified site

Intestinal infection due to other organism, not elsewhere classified

Congenital hypertrophic pyloris stenosis

Lack of expected normal physiological development

Extrinsic asthma

Croup

Urinary tract infection, site unspecified

Orbital cellulitis

Bronchopneumonia, organism unspecified

Maintenance chemotherapy

8,568

592

247g

168

159

151

128

117

114g

74

74

67

6 1

g

61

4 6

g

4 6

g

#19

40

36

32

31

30

2 4

g

22

22

67.59

4.67

1.95

1.33

1.25

1.19

1.01

0.92

0.90

0.58

0.58

0.53

0.48

0.48

0.36

0.36

0.34

0.32

0.28

0.25

0.25

0.24

0.19

0.17

0.17

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,974 87.09

KEY: CT - condition-treatment; ICD-9-CM - International Classification of Diseases, 9th Edition, Clinical Modification; FY - fiscal year.

NOTE: “CT O“ is used to designate inconclusive diagnoses to allow reimbursement for diagnostic services.

a fidudes Kaiggr Permanence Medicaid f3nr0119S9.

b hUSS aW Wta were missing from some ciaims, discharge totals for some ICD-9-CM codes may differ from those in table 5-13.

C ~~ 87 ~mnt of d~ms were available for analysis; total discharges Were estimat~ to ref~~t 1 ~ pement.

d 1~~9 ~~: V30.0, v30.~, v~.ol , v~.1 .

e l~u~~ ~9: 642.41,64,4.21,64501, 647.61, 84&21, 652.21,653.41,654.21, 6=.31, 658.11,6~.11, ~0.31 , 661.11,661.21, 661.31,662.21, 883.11,

663.31, 664.01,664.11, 664.21,664.31,665.51, 666.12,669.51, 670.04.

f lnd~es CO&S: 765.1, 768.5, 769, 770.1, 770.6, 770.8, 771.8, 774.2, 774.6.

9 Dmarge totals maybe greater than those in table %13 because additional ICD-9-CM diagnoses occurred in the under age 18 population.

h Indudgs codes: 644.03,644.13, 646.63.

i ~e9e ~= are missing from the list.

j Maintenance chemotherapy is considered an ancillary serviee and would be covered for all treatable cancers under the waiver.

SOURCE: Coopers & Lybrand, San Francisco, CA, unpublished data drawn from paid Oregon Medti’d claims, 1991.

specific codes that might appear above the line. Most

of these infections are self-limited gastrointestinal

illnesses that do not require treatment (311).66

However, all such infections can sometimes require

therapy for dehydration and some patients with

certain infections need to be treated. Some high-risk

patients with nontyphi salmonella infections (e.g.,

very young infants, patients with malignancy or

hemoglobinopathy), for example, should be treated

with antibiotics (125,314). Failure to treat in such

cases would require not following the recommendations of the American Academy of Pediatrics

(3).

Forty-eight hospital stays were for acute upper

respiratory infections; all but two were for children.

These discharges are in CT pair 695. It is not clear

whether more specific coding would reassign these

cases to higher priority CT pairs.

CT pair 588, the first below the line, includes 47

adult discharges for displacement of lumbar intervertebral disc without myelopathy. It is not
Table 5-15--Inpatient Hospital Utilization by Oregon Medicaid Recipients Subject to the Proposed Demonstration:

Most Costly Principal Diagnoses, FY 1989 b

Estimated

Rank by CT ICD-9-CM number of Total paid Percent of

cost pair(s) diagnosis code Description of principal diagnosis discharges b ($thousands) c total costs

— d

—e

650

574.00,.01,.10

V31.0, V32.O —f

2

486

540.0,.9

493.90,.91

633.1

466.0,.1

518.81

722.10

789.0

276.5

745.5

558.9

998.5

590.10

480.1

572.8

626.2

309.0

780.3

Single Iiveborn

Pregnancy, childbirth, specified complications

Pregnancy, childbirth, normal delivery

Calculus of gallbladder with cholecystitis

Twin birth

Complications of pregnancy, without delivery

Conditions of the perinatal period

Pneumonia, organism unspecified

Acute appendicitis

Asthma unspecified

Tubal pregnancy

Acute bronchitis and bronchiolitis

Respiratory failure

Displacement of lumbar intervertebral disc without myelopathy

Abdominal pain

Volume depletion

Congenital ostium secundum type atrial septal defect

Other and unspecified noninfectious gastroenteritis and colitis

Postoperative infection

Acute pyelonephritis, without lesion of renal medullary necrosis

Pneumonia viral

Other sequelae of chronic liver disease

Excessive or frequent menstruation

Brief depressive reaction

General symptoms (convulsions)

8,611

7,385

1,698

179

634

203

189

118

164

109

141

6

47

86

83

9

102

36

70

40

1

31

56

63

$7,714,830

6,847,130

1,188,689

561,105

505,685

438,476

387,722

299,254

245,585

199,523

175,506

166,350

145,833

113,875

110,534

108,338

104,652

95,499

94,605

94,343

93,925

82,959

72,044

69,716

67,938

26.00

23.07

4.01

1.89

1.70

1.48

1.31

1.01

0.83

0.67

0.59

0.56

0.49

0.38

0.37

0.37

0.35

0.32

0.32

0.32

0.32

0.28

0.24

0.23

0.23

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,261 $19,984,196 67.34

KEY: KEY: CT - condition-treatment; ICD-9-CM - International Classification of Diseases. 9th Edition, Clinical Modification; FY = fiscal year.

NOTE: “CT O“ is used to designate inconclusive diagnoses to allow reimbursement for di~nostic services.

a adu~ K~~r Permanence Medicaid enrobes.

b Most ~s~ diagno~s based on total CISMIS pdd by Medicaid.

c ~ly 87 pe~nt of dam were a~i~ble for analysis; total d.bcharges Were 8StimStSd to refl~t 1 ~ ~~nt.

d lndu~s -:V30.0, V30.00, V30.01, V30.1.

e lndu~ -s: 641.11, Ml .21,642 .31,642.41,642.51, 642.91,644,21,64501, 647.61,84.21,64381,651 .01,652 .21,653.41,654.21, 656.11,656.31,656.41, 656.51,658.11,658.21,

660.01, 660.11,660.31, 660.41,661.01, 661.11,661.21,661.31, 662.21,663.11,663.31, 664.01,664.11, 664.21, 664.31,665.51,666.12, 669.51, 670.04.

f lnd~~ codss: 644.03,646.63, ~.93.

g Includes codss: 765.1, 769,770.1, 770.8,774.6.

h Th=e ~es are missing from the list.

SOURCE: Coopers & Lybrand, San Francisco, CA, unpublished data drawn from pdd Oregon Medicdd claims, 1991.
Table 5-16--lnpatient Hospital Utilization by Oregon Medicaid Recipients Subject to the Proposed Demonstration:

Most Costly Principal Diagnoses for Children Under Age 18, FY 1989 b

Estimated Estimated

Rank by CT ICD-9-CM number of total paid Percent of

cost pair(s) diagnosis code Description of principal diagnosis discharges c d ($thousands) c d total rests

Single liveborn

Conditions of the perinatal period

Twin birth

Pregnancy, childbirth, specified complications

Pneumonia organism unspecified

Congenital anomalies of cardiac septal closure

Asthma, unspecified

Other diseases of the lung, respiratory failure

Acute bronchitis and bronchiolitis

Acute appendicitis

Pneumonia viral

Pregnancy, childbirth, normal delivery

General symptoms (convulsions, pyrexia)

Volume depletion

Other sequelae of chronic liver disease

Congenital hypertrophic pyloric stenosis

Cystic fibrosis

Other and unspecified noninfectious gastroentiritis and colitis

Fracture of other and unspecified parts of femur

Congenital anomalies of diaphragm

Lack of expected normal physiological development

Unspecified viral infections

Acute upper respiratory infection, unspecified site

Intestinal infection due to other organism, not elsewhere classified

Other specified congenital anomalies

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,568

254

174

494

151

30

136

3

128

61

61

159

83

67

1

40

1

74

21

2

36

46

46

43

1

10,680

$7,602,903

546,594

496,490

425,371

222,561

203,707

145,810

133,964

132,708

124,671

123,811

105,506

88,453

86,426

82,959

67,866

64,325

61,246

51,436

50,107

45,567

44,657

40,425

35,594

35,297

$11,018,454

53.56

3.85

3.50

3.00

1.57

1.43

1.03

0.94

0.93

0.88

0.87

0.74

0.62

0.61

0.58

0.48

0.45

0.43

0.36

0.35

0.32

0.31

0.28

0.25

0.25

77.59

KEY: KEY: CT - condition-treatment; ICD-942M - International Classification of Diseases, 9th Edition, Clinical Modification; FY - fiscal year.

NOTE: “CT O“ is used to designate inconclusive diagnoses to allow reimbursement for diagnostic services.

a fiduk Kaiger Permanence Medicaid enroiiees.

b M~t ~~ d~gnosis based on total claims paid by Medicaid.

c ~ly 87 ~rmnt of d~~ were available for analysis; total discharges were estimated to refIwt 100 Perc~t.

d *UW age ~ta were ~i=ing fmm ~me claim, di~harge and dollar totals for ~me IcD-9ZM cedes may differ from those in table 5-15.

e lndu~s codes: v30.0, V30.00, V30.01, V30.1.

f lnd~es CO&S: 765.1,765.18, 768.5, 769, 770.1,770.6,770.8, 771.2,771.8, 774.2,774.6.

9 Includes a)des: V31 .0, V32.O.

h lndu~s ~s: 642.41,644.21,645.01, 652.21,653.41,654.21, 6!56.31, 660.11,660.31,663.31, 664.01,664.11, 664.21, 664.31,669.51.

i These codes are missing from the list.

SOURCE: hopers & Lybrand, San Francisco, CA, unpublished data drawn from paid Oregon Medicaid dairns, 1991.
150 ● Evaluation of the Oregon Medicaid Proposal

known what proportion of these patients received

medical or surgical treatment. While neither would

be covered by the waiver, treatment for this condition is often ineffective (44).

Common Principal Diagnoses Related to

Physician Services

Tables 5-17 and 5-18 show a frequency ranking of

the most common principal diagnoses related to FFS

physician visits in FY 1989.67 These data include all

FFS physician visits, by Oregon Medicaid participants who would be subject to the waiver, regardless

of site (e.g., doctor’s office or hospital). Almost 12

percent of visits were for routine infant exams, child

health checks, or immunizations; another 8 percent

were for maternity-related or newborn care. Coverage for all such care would not change during the

demonstration.

A few of the most common diagnoses related to

physician services are missing from the prioritized

list. Three are nonspecific codes (i.e., vaginitis/

vulvovaginitis, urinary tract infection, and unspecified fetal growth retardation) that may be used less

often under the demonstration as providers become

more sophisticated in their coding practices. A third,

impetigo, accounted for 912 pediatric physician

visits in FY 1989. Impetigo is a self-limited and

contagious condition common among children that

if treated can prevent spread to other children (16).

Physician Services Below Line 587—Under current coding practices, a number of the most common

principal diagnoses fall into CT pairs below line

587. Although treatment for these conditions is not

reimbursable under the waiver, the visit or visits to

establish the diagnosis would be fully covered. The

proportion of these visits that are diagnostic is not

known. It is likely that many of the reported visits for

self-limited conditions, such as acute respiratory

infections and acute pharyngitis, are essentially

diagnostic encounters that typically do not require

followup treatment. Denying payment for any related treatment for these diagnoses is not likely to

change the volume of related physician visits or have

any significant clinical consequences. For those

cases that become more serious, such as a cold that

develops into acute bronchitis, a return visit to the

physician and treatment would be covered.

Not surprisingly, acute pharyngitis (i.e., sore

throat), tonsillitis, and colds and respiratory infections (CT pairs 670, 663, and 695 respectively) are

particularly common especially among children.

The vast majority of the 23,283 related FFS physician visits in FY 1989 were pediatric. Under the

waiver, symptomatic care (e.g., acetaminophen,

gargle, etc.) could be recommended and would not

require prescription medication. In rare instances,

when a patient’s throat is so sore that fluid intake is

inadequate, intravenous fluids and hospitalization

may be required. Current waiver rules do not make

clear whether such supportive measures to prevent

dehydration and malnutrition would be reimbursable. Dehydration (ICD-9-CM code 276.5) is missing

from the list altogether.

In addition, it is uncertain whether the common

clinical practice of prescribing antibiotics for patients with sore throat while awaiting results of

throat culture (for possible strep infection) could be

continued. Whether a change in this practice would

compromise the ultimate health outcome continues

to be debated in the clinical literature.

Conjunctivitis (CT pair 627) and oral candidiasis

were fairly common pediatric conditions in FY

1989; together they accounted for 1,848 physician

visits among patients under age 18. Oral candidiasis

(commonly referred to as “thrush” in infants)

would be included in CT pair 658 unless it was found

to be related to an immunosuppressive condition

such as HIV infection (CT pair 255). Yet, despite the

immediate need for treatment for HIV-infected

patients (46,205), it is not clear whether waiver rules

would allow payment for treating affected patients

whose HIV status is suspected to be positive but is

not yet confirmed.

A number of nonspecific below-the-line diagnoses would probably be coded differently under the

waiver. For example, nonspecific codes for asthma

and bronchitis (CT pair 643) are frequently used by

Oregon physicians serving Medicaid patients. Almost 2,900 FFS physician visits in FY 1989 were for

~ ‘nMtotal visits reported tirepnxent the nurnberof physician encmmters assigned to the specific KID-9-CM codes appming in these tables. ‘lhey

do not show the total number of cases that would fall into each CT pair because most CT pairs include more than one diagnostic code. Nor do they reflect

any utilization by HMO orPCO auullecs. Thus the data probably tirestunare ‘ the number of related physician visits that would not be covered during

b dunonstmtion.
Chapter 5--Implications for Beneficiaries ● 151

Table 5-17-Utilization by Oregon Medicaid Recipients Subject to the Proposed Demonstration:

Most Common Principal Diagnoses, FY 1989a

Estimated Estimated

Rank by CT ICD-9-CM number of percent of

frequency pair(s) diagnosis code Description of principal diagnosis Visits b

totalb

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

Total

143’

354

695

21

354

143,167

21

670

22,708 C

21

643

0

1

107

391 c

643

669C

163

1

695

21

0

171,678

482,572’

663

—d

534C

19

167

0

537

362

292

1

171

0

167

V20.2

382,.9

465,.9

V30.O

381,.0,.01,.1,.4

V06.1 ,.3c

V22,.1

462

765.1

V22.2

490

789,0

466,.0,

558.9

692.9

599.0

493.9

079.9

V25.4,.9

486

460

650

784.0

078.1

473.9

463

616.10

477.9

774.6

V72.9

780.3

625.9

779.3

770.7

487.1

662.1

782.1

V72.3

Routine infant or child health check

Suppurative and unspecified otitis media

Acute upper respiratory infections; multiple or unspecified site

Single Iiveborn

Nonsupportive otitls media and Eustachian tube disorder

Immunizations; diphtheria-tetanus-pertussis (DTP)

Supervision of pregnancy

Acute pharyngitis

Other preterm infants

Pregnant state; incidental

Bronchitis, not specified as acute or chronic

Abdominal pain

Acute bronchitis and bronchiolitis

Other and unspecified noninfectious gastroenteritis and colitls

Dermatitis; unspecified cause

Urinary tract infection; site not specified

Asthma unspecified

Unspecified viral infection

Contraceptive management

Pneumonia, organism unspecified

Acute nasopharyngitis

Pregnancy, childbirth; normal delivery

Headache

Viral warts

Unspecified sinusitis

Acute tonsillitis

Vaginitis and vulvovaginitis, unspecified

Allergic rhinitis; unspecified cause

Conditions In the perinatal period

Unspecified examination

General symptoms (convulsions)

Unspecified symptoms associated with female genital organs

Feeding problems in newborn

Chronic respiratory disease arising In the perinatal period

Influenza, with other respiratory manifestations

Dysplasia of cervix

Rash and other nonspecified skin eruption

Gynecological examination

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,412

20,166

12,192

8,818

8,110

7,921

7,691

6,818

6,531

5,639

5,031

4,842

4,308

3,699

3,609

2,912

2,891

2,812

2,749

2,403

2,279

2,232

2,192

2,123

2,039

1,994

1,965

1,887

1,613

1,527

1,475

1,458

1,379

1,368

1,361

1,349

1,342

1,312

186.449

9.77

5.41

3.27

2.37

2.18

2.13

2.06

1.83

1.75

1.51

1.35

1.30

1.16

0.99

0.97

0.78

0.78

0.75

0.74

0.65

0.61

0.60

0.59

0.57

0.55

0.54

0.53

0.51

0.43

0.41

0.40

0.39

0,37

0.37

0.37

0.36

0.36

0.35

49.69

KEY: CT - condition-treatment; ICD-9-CM - International Classification of Diseases, 9th Edition, Clinical Modification; FY - fiscal year.

a ~~uAS M~icajd rgd@ents enrolled in health maintenance and physician care Organizations.

b Only 77 percent of claims were available for analysis; total visits were estimated to reflect 100 per-nt.

c Most closely assodated CT pair(s).

d M~sing from the list.

SOURCE: Coopers & Lybrand, San Francism, CA, unpublished data drawn from paid Oregon Medtid ddms, 1991.

nonspecific asthma. Specific asthma codes are bronchitis could have serious clinical consequences.

ranked high in CT pair 151. Untreated patients may experience various sympNonspecific bronchitis accounted for more than toms, including coughing and shortness of breath,

5,000 FFS physician visits in FY 1989. How many and are likely to have frequent and more prolonged

of these cases were actually acute or chronic is not acute episodes of illness (9). Without treatment,

known. Actual acute bronchitis cases would be many more chronic bronchitis patients would be

coded in CT pair 1. Although chronic bronchitis expected to require hospitalization for acute exacerbations of symptoms. remains in CT pair 643, such cases could often be

redefined and coded into related higher ranked CT There are no above-the-line alternative codes for

pairs (e.g., emphysema (CT pair 306) and asthma the common nonspecific viral infections (ICD-9-

(CT pair 151) (14). If not, failure to treat chronic CM code 079.9 in CT pair 669) that accounted for
152 ● Evaluation of the Oregon Medicaid Proposal

2,812 physician visits in FY 1989 (2,395 among

children). The low priority assigned to most nonfatal

viral infections is appropriate, however, since related diagnostic costs would be covered, effective

treatments are not available, and the conditions are

self-limited (31 1). Viral pneumonia is an important

exception; in some cases it can be life-threatening

without treatment (230,3 11).

SUMMARY OF IMPLICATIONS

FOR THE DEMONSTRATION’S

PARTICIPANTS

Eligibility

Expanding Medicaid coverage to include all

poor Oregonians who currently lack health coverage is a tremendous breakthrough for this

population in terms of access and perhaps health

outcome as well. The available literature make clear

that having health insurance, including Medicaid

coverage, can have a substantial effect on whether

one receives health services.

Streamlining Medicaid eligibility processing

would also be a considerable accomplishment of

the proposed waiver, but the new rules disqualify

some pregnant women and young children. This

is a needless side effect of the waiver proposal and

could be remedied by lifting the eligibility threshold

for this group.

Benefits and the Prioritized List

The implications of the proposed changes in

Medicaid benefits clearly depend on the individual

beneficiary. Current eligibles would both gain

and lose some clinically important services; their

bottom line is essentially a personal one based on

individual health needs. Can we say that overall the

health of Oregon’s poor would improve or diminish

with the proposed changes in Medicaid benefits?

Certainly the newly insured would be in a better

position to gain access to care. But the potential

effect of the prioritized list on Oregon’s current

Medicaid population is very difficult to project.

Given that Medicaid benefits are typically shortterm and that any evaluation effort is likely to be

based on limited baseline data, it may never be

possible to clearly identify how this aspect of the

demonstration affected its participants’ access to

services or, ultimately, their health.

Some of the financial barriers to early prenatal

care could be eliminated by the demonstration. The

new eligibility rules enable poor women to have

Medicaid benefits before they become pregnant. An

effective prenatal outreach program would be key to

realizing the potential of the demonstration to

actually reduce infant mortality and the number of

low-birth-weight babies among the State’s poor.

Expanding Medicaid coverage to include all poor

children would be an important achievement that

accelerates Congress’s recent efforts to bring them

into the Medicaid program. It creates the potential to

improve children’s access to routine pediatric care,

to increase immunization rates, and expedite early

intervention for potentially serious and chronic

conditions. Whether these goals are achieved must

be monitored.

Providing benefits for adult preventive services

would also markedly improve Oregon’s Medicaid

program. Would it noticeably enhance the health

status of the Oregon poor? In the short term, the

answer is likely to be negative, unless participants

are aggressively encouraged to obtain preventive

care and have the long-term coverage necessary to

take advantage of any clinical benefits from early

disease detection.

Making organ transplants available to adults may

certainly save some lives, but the number of

participants who would be affected would be small.

Providing dental care is sure to enhance many adult

beneficiaries’ health although the consequences of

going without dental treatment are less dire than

forgoing treatment for some below-the-line conditions (e.g., Schmidt’s syndrome in CT pair 640).

It is not surprising to find that some below-theline CT pairs include conditions with effective

therapies, since low rank on the prioritized list is

intended to reflect lower relative importance but not

necessarily complete ineffectiveness. Nonetheless,

most uncovered CT pairs do not have significant

clinical implications and clearly reflect treatment

that is generally considered ineffective or would

make little difference to exclude from coverage.

Yet there is some evidence that some individuals

could be harmed by the demonstration. Recent

utilization data show that some below-the-line

conditions would occur among the waiver population rather frequently and may have serious

consequences. If, for example, infants with viral
Chapter 5--Implications for Beneficiaries . 153

Table 5-18—Utilization of Physician Services by Oregon Medicaid Recipients Subject to the Proposed

Demonstration: Most Common Principal Diagnoses for Children Under Age 18, FY 1989a

Estimated Estimated

Rank by CT ICD-9-CM number of percent of

frequency pair(s) diagnosis code Description of principal diagnosis visits b c total

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

143,167

22,708

670

19,22,106,292

643

107

1

391

151,643

669

695

0

1

663

0

482,572

362

A

171,678

0

649

534

627

0

1 — f

255,658

— f

434

V06.1,.3

765.1

462

—0

490

558.9

466,.0,

692.9

493,.9

079.9

460

780.3,.6

486

463

789.0

473.9

779.3

599.0

078.1

782.1

691.0

477.9

372.30

783.4

487.1

684

112.0

764.9

132.0

Routine infant or child health check

Suppurative and unspecified otitis media

Acute upper respiratory infection; multiple or unspecified site

Single Iiveborn

Nonsuppurative otitis media and Eustachian tube disorder

Immunizations; diphtheria-tetanus-pertussis (DTP)

Other preterm infants

Acute pharyngitis

Conditions of the perinatal period

Bronchitis, not specified as acute or chronic

Other and unspecified noninfectious gastroenteritis and colitis

Acute bronchitis and bronchiolitis

Dermatitis; unspecified cause

Asthma unspecified

Unspecified viral infection

Acute nasopharyngitis

General symptoms (convulsions, pyrexia)

Pneumonia, organism unspecified

Acute tonsillitis

Abdominal pain

Unspecified sinusitis

Feeding problems in newborn

Urinary tract infection; site not specified

Viral warts

Rash and other nonspecific skin eruption

Diaper or napkin rash

Allergic rhinitis, cause unspecified

Conjunctivitis, unspecified

Lack of expected normal physiological development

Influenza with other respiratory manifestations

Impetigo

Candidiasis of mouth

Fetal growth retardation, unspecified

Pediculus capitis

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,243

20,261 d

10,548

8,822

8,70@

7,862

6,468

5,091

4,925

3,206

2,971

2,801

2,770

2,690

2,395

2,108

1,982

1,874

1,645

1,579

1,448

1,375

1,216

1,108

1,081

1,058

1,049

1,016

994

992

912

832

814

777

149,621

15.32

8.56

4.46

3.73

3.68

3.32

2.73

2.15

2.08

1.36

1.26

1.18

1.17

1.14

1.01

0.89

0.84

0.79

0.70

0.67

0.61

0.58

0.51

0.47

0.46

0.45

0.44

0.43

0.42

0.39

0.39

0.35

0.34

0.33

63.23

KEY: CT - condition-treatment; ICD-9-CM - International Classification of D&ases, 9th Edition, Clinical Modification; FY - fiscal year.

NOTE: “CT O“ is used to designate inconclusive diagnoses to allow reimbursement for diagnostic services.

a Excludes Medicaid beneficiaries enrolled in an HMO or PCO.

b Only 77 percent of claims were available for analysis; total visits were estimated to refleet 100 percent.

c -we age ~ta were missing from some claims, visit totaki for some ICD-9-CM mctea may differ from those in table 5-17.

d ~sit totals maybe greater than those in table ~17 ~use a~itional diagnoses oecurr~ in the under age 18 population.

e lndu~s -s: 770.7,770.8,769,774.6.

f Th~e -s are missing from the list.

SOURCE: Coopers & Lybrand, San Francisco, CA, unpublished data drawn from paid Oregon Medicaid dahns, 1991.

pneumonia are denied care during the demonstration, the result could be tragic. Would hospitals deny

the admission or provide the care without compensation?

Other below-the-line CT pairs are less common,

but at least five include currently covered life-saving

treatments for conditions that have no above-theline alternative.68 If effective therapies are available, providers might treat patients with an

uncovered potentially fatal disorder, but the lack

of a guarantee is worrisome for these individuals.

In the FFS sector, providers may “upcode” uncovered CT pairs if covered alternatives exist; prepaid

providers may absorb the costs of uncovered treatments if they find it cost-effective to do so.

It is especially troublesome that the demonstration’s participants would not be guaranteed

a minimum package of basic benefits. If a budget

@ ~me~Tp~ ~clude impetigo herpetiforrnis, myasfheniagravis, Schmidt’s syndrome, viral pneumonia and bone marrow &tlI@antS fOrChif&~

with non-Hodgkin’s lymphoma. (Bone marrow transplants for non-Hodgkin’s lymphoma are not currently covered for adults.)

328-308 0 - 92 - 6
154 . Evaluation of the Oregon Medicaid Proposal

shortfall eliminates coverage for some treatments

above CT pair 588, the chances grow that individuals could be harmed from the demonstration. This

concern is heightened by OTA’s conclusion that the

waiver’s costs may be underestimated (see ch. 6).

The Role of the Delivery System

How the delivery system is organized is key to

whether demonstration participants would receive

the benefits to which they would be entitled.

Changes in access to primary care would depend,

above all else, on provider participation in the

demonstration. Oregon’s proposal would affect Medicaid beneficiaries’ access to almost all health services. In addition to restricting covered services to

those falling above CT pair 588, it would lock in

most participants to one or a group of health care

providers. It is these providers who would play a

critical role in each participant’s access to basic

primary care as well as the most specialized tertiary

level services.

Participants’ usual source of care is certain to

differ with implementation of the demonstration,

as the uninsured population is brought into the

system and many more current eligibles are

assigned a managed care provider. Having a

specific provider has been associated with greater

use of preventive and other health services (2,111231).

The response of Oregon Medicaid providers to the

new system will be critical. Proponents of Medicaid

managed care suggest that it can increase provider

participation and improve access to more efficient

and effective services (149). Critics of Medicaid

managed care argue that it creates strong incentives

for underservice. In the case of Oregon, however, the

U.S. General Accounting Office has reported that

the State has, in its current system, “instituted

financial safeguards to prevent financial incentives

that would lead to inappropriate reduction in service

delivery and quality” (238). As managed care

providers are at financial risk for enrollees’ use of

health services, they should be motivated to encourage preventive care and early access to primary care.

But if the rather short-term nature of Medicaid

enrollment dissuades Oregon providers from considering the long-term as well as short-term needs of

participants, the program may fall short of its goals.

Access to hospital services would change for

many of the demonstration participants. The vast

majority of Oregon’s Medicaid participants currently receive FFS inpatient care. Ultimately, 55

percent of the waiver population maybe enrolled in

fully capitated health plans (FCHP) that cover

hospital as well as physician services. The State

anticipates that, compared with FFS care, expanded

FCHP enrollment would yield a 25 percent managed

care-related savings in Medicaid expenditures for

hospital care, presumably as a result of improved

access to primary care and fewer unnecessary

hospitalizations (177) (see ch. 6). Hospital stays for

below-the-line CT pairs should also decline. Any

increase in access to hospital care (e.g., for adult

organ transplants) related to implementation of

the list should be small for current beneficiaries,

although there should be substantial improvement in access to inpatient care for those newly

covered under the demonstration.

A Critical Evaluation Is Essential 69

Would Oregon Medicaid participants get the care

they need? Would they have to bear an excessive

burden in waiting time to get an appointment or

travel time to get care? Would there be a sufficient

number of Medicaid providers of all necessary

types? Unfortunately, there is very little information

to rely on to help project the course of the

demonstration. It is not yet known how many

providers will participate in the Oregon health plan.

Nor can we estimate the extent to which participating FCHPs, FFS physicians, hospitals, and others

would be willing to provide uncovered services that

they deem to be clinically important. These unanswered questions underline the importance of a

comprehensive evaluation of Oregon’s demonstration should the waiver be granted.

@ See ch. fl for a discussion of eviduation issues.
Chapter 6

Demonstration Program Costs
Contents

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

CALCULATING DEMONSTRATION COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Overall Demonstration Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Per Capita Service Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FACTORS AFFECTING COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Caseload Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .

Utilization Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assumptions Relating to CT Pair Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Delivery System Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Program-Specific Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assumptions Affecting Nonprogram Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IMPLICATIONS FOR BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY OF CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure

Figure Page

6-1. Per Capita Cost Calculation for the Full List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Tables

Table Page

6-1. Oregon’s Demonstration Cost Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

6-2. Oregon’s Basic Assumptions for Projecting Costs of

the Medicaid Program Under Current Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

6-3. Oregon’s Caseload Assumptions for Projecting Costs

of the Demonstration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

6-4. Sources of Data for Oregon’s Per Capita Cost Calculation . . . . . . . . . . . . . . . . . . . . . 161

6-5. Oregon’s Method for Estimating Threshold-Specific Costs . . . . . . . . . . . . . . . . . . . . 162

6-6. Basic Rules and Assumptions Used to Assign Claims

to Condition-Treatment Pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

6-7. Substitute Services Used in the Threshold-Specific Cost Calculation . . . . . . . . . . . . 163

6-8. Estimated Per Capita Costs and Percent of Total List Costs

at Selected Threshold ‘‘Lines’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

6-9. Savings Assumptions for Managed Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

6-10. Examples of Condition-Treatment Pairs Excluded Under

Four Scenarios of Higher Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Chapter 6

Demonstration Program Costs

INTRODUCTION

Oregon’s proposed Medicaid demonstration project is not expected to save program costs during the

5 years of its implementation. The waiver application submitted by the State to the Health Care

Financing Administration (HCFA) predicts that the

cost of conducting the demonstration (over and

above the normal costs of the State’s Medicaid

program) would be about $25 million during its first

year and about $238 million overall (table 6-1).1

Therefore, over the 5-year project, Oregon predicts

that the State must increase its Medicaid expenditures by $95 million and the Federal Government

must provide $143 million in matching funds in

order to carry out the program (178).

Because State law states that the employer mandate portion of the Oregon Basic Health Services Act

will not go forward without the Medicaid demonstration, and because increased employer-based

insurance would shift some Medicare as well as

Medicaid beneficiaries to private coverage, Oregon

counts savings from the employer mandate in its

program cost estimates. Over the 5 years of the

program, the State projects that the Federal Medicare program would save $34 million due to the

employer mandate. Thus, according to the State,

overall Federal expenditure increases related to the

demonstration would be limited to less than $110

million (see table 6-1) (178).

A critical question for both the State and the

Federal Government is whether Oregon has

accurately predicted the costs of the demonstration. If the State has overestimated the costs,

Medicaid beneficiaries will have been denied services to which they might have had access (because

the coverage line might have been set lower on the

prioritized list). More importantly, if costs have been

underestimated, and the State is unable or unwilling

to reallocate State funds to cover the difference, then

either: 1) services must be reduced below those the

Federal Government is assuming will be available,

2) Federal and State taxpayers must be prepared to

pay out additional dollars, or 3) the demonstration

must be curtailed. Clearly, the accuracy with which

costs have been predicted has implications for

Oregonians, for the Federal Government, and for

other States interested in similar programs.

This chapter describes the method used by Oregon’s contractors to derive the per capita costs that

formed the basis for predicting program expenditures associated with the demonstration. (For simplicity’s sake, in this chapter assumptions and

Table 6-l-Oregon’s Demonstration Cost Estimate (in millions of dollars)

Year 1 Year 2 Year 3 Year 4a Year 5

(FY 93)

5-year

(FY 94) (FY 95) (FY 96) (FY 97) total

Projected cost of current program . . . . . . . . . . . . . . . . . . . . . . $925.9 $1,037.1 $1,180.6 $1,351.5 $1,546.7 $6,041.8

Total program cost under demonstrationb 

. . . . . . . . . . . . . . . 950.8 1,093.0 1,260,6 1,394.0 1,581.7 6,280.1

KEY: FY - fiscal year

a The empioyer mandate is to take full effect by the fourth year of the demonstration, resulting in a presumed drop in Medicaid (and Medicare) CXX@ in years

4 and 5 of the demonstration due to beneficiary coverage through employers rather than through public programs.

b Total ~sts of the ~egon Medi~M program, i~lucting services to the population not currently inducted under the demonstration.

C ln~emental ~sts of the ~monstration pre=nt~ here do not include the ~ts of ln~uding mental health/chemi~l dependency services or the ~sts of

services provided to elderty and disabled Medicaid beneficiaries. These services were not included in the original waiver application. Their costs would be

separately cdeulated at the time they would be included under the demonstration.

d Does not include Fede~l research costs of evaluating the demonstration.

SOURCE: Baaed on data from Oregon Department of Human Resources, Office of Medical Assistance Programs, Salem, OR, The Oregon Medicaid

Dernorwtratrbn W’a~verApplicafion, submitted to the Health Care Finanang Administration, Aug. 16, 1991.

1 The total projected costs of the entire State Medicaid program are $951 million in the first year and nearly $6.3 billion over the 5 years the waiver

would be in efftxt.

–157–
158 ● Evaluation of the Oregon Medicaid Proposal

analyses made by contractors on behalf of the State

are not distinguished from the State’s own analyses

and assumptions; both are attributed here to the

State, which bears the responsibility for them in the

waiver application.2

) The chapter then discusses

factors that might affect the per capita estimates, and

other factors that might affect the broader estimates

of program expenditures as set out in the waiver

application. Finally, it draws conclusions about the

likely accuracy of the estimates and discusses the

implications of costs significantly different from

those projected.

CALCULATING

DEMONSTRATION COSTS

Overall Demonstration Costs

The direct incremental costs of the proposed

demonstration project are simply the difference

between the projected costs of Oregon’s Medicaid

program with and without the demonstration. These

incremental costs are the direct ‘price’ faced by the

State and the Federal Government when undertaking

all of the changes the State proposes under the

waiver. 3

In addition to this direct cost, the waiver would

result in secondary costs and savings to non-Medicaid

programs. Most of these costs/savings would occur as

a result of the State mandate for minimum employer

benefits that will go into effect only if the waiver is

approved. These secondary costs and savings will be

discussed later in this chapter.

To calculate the net (incremental) direct costs of

the demonstration, Oregon first projected the costs

of providing services under current rules to the

existing Medicaid population that would be covered

by the demonstration: i.e., persons eligible through

Aid to Families with Dependent Children (AFDC),

and pregnant women and young children with

incomes up to 133 percent of the Federal poverty

level. The projected costs were then subtracted from

the costs of serving these and newly eligible persons

under the demonstration program.

Table 6-2-Oregon’s Basic Assumptions for

Projecting Costs of the Medicaid Program Under

Current Rules (Demonstration Eligibles Only)

●

●

●

●

Participation: of those eligible for Medicaid, an estimated 72

percent participate (i.e., enroll in the program). This participation rate will hold steady in the future.

Caseload for the purposes of this calculation, the relevant

caseloads are the expected average number of program

enrollees per month. The average number of enrollees per

month times 12 is assumed to be the average number of

eligibles served per year.

Inflation: the expected future rate of inflation in per capita costs

is the average rate of inflation experienced by the Medicaid

program during the past 6 years. Care-specific inflation rates

are applied separately to acute and primary care (currently

prioritized), mental health/chemical dependency services (to

be added to the demonstration in year 2), and long-term care

(outside the waiver).

population growth and composition: the Medicaid caseload will

grow by 4.5 percent per year due to population growth and

phase-in of older children mandated by Congress (Public Law

101 -508). The overall population will grow at the rate projected

by the Census Bureau for Oregon. Children will represent 39

percent of the caseload by year 5.

SOURCE: Based on information from Oregon Department of Human

Resources, Office of Medical Assistance Programs, Salem, OR,

T5e ~egon Medkaid Demonstration Waiver Application, submitted to the Health Care Financing Administration, Aug. 16,

1991.

Conceptually, projecting program expenditures

under current rules is relatively straightforward: it

requires assumptions regarding inflation, unemployment, Medicaid participation, and other basic economic and program-specific factors and is subject to

uncertainty and error, but the method requires no

unusual manipulations. Some of the basic assumptions used in projecting current costs are listed in

table 6-2.

Estimating costs over the next 5 years under the

demonstration, however, is much more complex. It

requires projections regarding how many people will

be newly eligible, how quickly they will enroll in the

program, how intensely they will use services, and

what the cost of the new package of services to be

offered will be. The estimate must also account for

the broader use of managed care under the demonstration and the administrative costs of implementing the new program.

z The State of Oregon contracted with the consulting fm Lewin/ICF, Inc. to provide estimates of caseloads over the course of the demonstration

and overall program costs. Coopers & Lybrand was the contractor for the per capita cost analysis.

s The cost estimate in the waiver application assumes that all services provided to elderly and disabled Medicaid beneficiaries, and all mental

healtMchemical dependency service+ are outside the demonstration. ‘Ihese costs are part of projected costs of the current prograrQ but they do not affect

the incremental demonstration cost calculation. If the waiver were approvedj the State would apply for amendments to the waiver to include these

additional populations and services, and the estimated incremental costs of including them would be presented to the Federal Government at that time.
Chapter 6--Demonstration Program Costs ● 159

To estimate the cost of services under the demonstration, Oregon separated the calculation into four

steps:

1.

2.

3.

4.

Estimate the new caseload; the number of

people who would be eligible under the

proposal, their participation rate, and the

‘‘uptake’ rate-how quickly they would enroll. Basic assumptions regarding demonstration caseload are listed in table 6-3.

Estimate the costs of providing the total

package of all 709 condition-treatment (CT)

pairs to this caseload. Since different people

have different utilization characteristics (e.g.,

pregnant women generally use more services

than AFDC-qualifying eligibles), estimate these

costs separately for each of six different

eligibility groups. Final total costs are an

average of these separate group-specific costs,

weighted for the caseload represented by each

group.

Estimate the proportion of total costs represented at different cutoff points on the list, and

specifically at line 587—i.e,, the cost of

providing the final covered benefit package for

prioritized services.

Add to this “per capita service cost for

prioritized services” the cost of providing

nonprioritized mental health, chemical dependency, and long-term care services to the

demonstration caseload. Since these costs are

not initially prioritized, they must be calculated separately and added to the prioritized

benefits to yield the final total cost of services

under the demonstration.

Per Capita Service Costs

Calculating Per Capita Costs for All 709 Services

The basic method used by Oregon to calculate the

costs of providing all services on the prioritized list

is summarized in figure 6-1. For each of 70

categories of service (e.g., anesthesia, emergency

room, physician inpatient visits), and for each of six

categories of enrollees (e.g., AFDC, new noncategorical eligibles), the State estimated the average per

capita monthly cost of providing that service to that

enrollee. The overall per capita monthly cost for a

given eligibility category was the sum across all 70

services, with an additional allowance for provider

administrative costs; the overall per capita monthly

Table 6-3-Oregon’s Caseload Assumptions for

Projecting Costs of the Demonstration Program

●

●

●

●

●

●

●

The potentially eligible population-those with incomes up to

100 percent of the Federal poverty level and pregnant women/

young children with incomes up to 133 percent of the poverty

level-is deduced largely from the Current Population Survey

(U.S. Bureau of the Census), using pooled data from the 4

years 1985-88.

The overall participation rate of the newly eligible population at

steady state will be 59 percent.

The participation rate of current and projected pregnant women

and children under age 6 will be 72 percent, the current rate.

Full participation will not occur until year 4 of the demonstration.

Uptake rates for years 1 through 3 will equal 40,70, and 90

percent of the steady-state participation rate, respectively.

Caseloads are expressed as the expected average number of

enrollees per month. The average number of enrollees per

month times 12 is assumed to be the average number of

enrollees served per year.

Caseload will decline in year 4 with the implementation of the

small business health insurance mandate, after which it will

grow 2 percent per year due to general population growth.

(Participation rates at steady state are assumed not to include

caseload decline due to the employer mandate.)

The caseload growth and decline will be uniform throughout all

counties.

SOURCE: Based on information from Oregon Department of Human

Resources, Office of Medical Assistance Programs, Salem, OR,

The Ckegon Medicaid Demonstration Waiver Ap@ication, submitted to the Health Care Financing Administration, Aug. 16,

1991.

cost per enrollee was the weighted average across all

six eligibility categories,

The utilization and cost information used to

derive the per capita monthly costs were based

largely on fee-for-service data (table 6-4). The

Medicaid data used, for example, were for fee-forservice utilization for currently eligible groups.

Private insurance data was used to estimate utilization for services not currently covered by Medicaid

(e.g., hospice care) and to estimate utilization rates

for services used by the currently uncovered groups

who will be newly eligible under the demonstration.

Since all demonstration participants are to be

enrolled in some form of managed care, Oregon

adjusted the per capita cost to accommodate its

assumption, based on its past experience with

prepaid managed care, that managed care saves

money. Overall savings from this source were

assumed to total $225 million over the 5 years of the

demonstration. Most of the savings was assumed to

accrue through lower emergency room and hospital

inpatient utilization.
160 ● Evaluation of the Oregon Medicaid Proposal

—

Figure 6-1—Per Capita Cost Calculation for the Full List

STEP 1. CALCULATE PER CAPITA COST PER SERVICE (repeat for each of 70 services)

Method

of service /

ratio per year 1

m/

‘NOd

x

Unit cost per

1,000 enrollees

I

per year I

month

Example: dental visits (all numbers are hypothetical)

7 t I , t

HH!!Z!5E!

L

$64,000 per

1,000 enrollees

r ear

I I

-+ 12 months/year

+1,000 enrollees

m,.

STEP 2. CALCULATE TOTAL PER CAPITA COSTS

a Sum per capita cost across all 70 services for each eligibility group.

b. Add provider administrative costs for enrollees in fully capitated health plans

(assume equal to 6% of total costs).

c. Total per capita cost for each eligibility group.

d. Average costs across all 6 eligibility groups, weighting according to

expected caseload.

e. Average per capita cost per month per enrollee= $145.15,

SOURCE: Office of Technology Assessment, 1992; based on data from Oregon Department of Human Resources, Office of Medical Assistance Programs,

Salem OR, 7?re Oregon Medicaid Demonsfratiorr Waiver Application, submitted to the Health Care Financing Administration, Aug. 16, 1991.
Chapter 6--Demonstration Program Costs . 161

Table 6-4--Sources of Data for Oregon’s Per Capita Cost Calculation

Data source Use in calculation

Blue Shield of California claims data

Blue Cross/Blue Shield of Oregon claims data

Oregon Medicaid Management Information System

Hospital information from California Office of Statewide

Health Planning, Oregon Office of Health Policy

Physician-provided information on average compensation

levels and overhead costs

Resource-based relative value scale

Information on existing managed care contracts

Oregon State University-provided information

Oregon Dental Association

Primary data source for allocating costs to condition-treatment pairs. Source of

service-specific charge data. Source for utilization data of services not currently

covered.

Comparative charge data used to adjust California data (which is a larger

sample) for Oregon charges for nonhospital services.

Source of utilization data for services and eligibility groups currently covered by

Medicaid.

Used to calculate cost-to-charge ratios for hospital services (inpatient and

outpatient combined). (Data from Medicare Cost Reports considered not

reliable because calculated ratios were below 50 percent.)

Used as basis for rough estimate that cost-to-charge ratio for primary care

physician services was no higher than 80 percent. (Specific data sources

included American Medical Association, Warren Surveys, and Medical Group

Management Association.)

Used to calculate rest-to-charge ratios for physician services relative to primary

care physicians.

Used to estimate cost-to-charge ratio for primary care services based on

“market rate,”

Used to estimate costs associated with dispensing prescription drugs.

Overhead costs of dentists.

SOURCE: Office of Technology Assessment, 1992. Besed on data from Oregon Department of Human Resourees, Office of Medical Assistance Programs,

Salem, OR, The Oegon Medicaid Demonstration WaiverApp/ication (app. D), submitted to the Health Care Financing Administration, Aug. 16,

1991; S. Hunt, Coopers & Lybrand, San Francisco, CA, personal communication, Jan. 6, 1992.

Calculating Threshold-Specific Per Capita Costs

Because the legislature was unlikely to fired the

entire list, the State also calculated the proportion of

costs represented by different “thresholds” on the

list. In contrast to the all-list per capita cost

calculation, the threshold-specific calculation required actually mapping existing medical claims

data (i.e., utilization and cost data) to specific CT

pairs. Table 6-5 presents an overview of the thresholdspecific cost calculation.

Mapping claims data to CT pairs proved to be a

difficult task. CT pairs are defined in part by CPT-44

procedure codes, the codes physicians use to specify

their services, and in part by ICD-9-CM5 codes,

which hospitals use to assign diagnoses to patients.6

But these diagnosis (i.e., condition) and procedure

(i.e., treatment) codes are often not unique to

individual CT pairs; some pairs, for example, have

the same condition appearing at different places on

the list with different medical and surgical treatments (see ch. 3). In addition, many health care

products and services-e. g., laboratory tests, therapy visits, and prescription drugs--could apply to

almost every CT pair.

Since diagnostic services for any condition are to

be covered regardless of whether treatment is

covered, as a first step in code assignment all CPT-4

codes for diagnostic procedures were assigned to a

hypothetical “CT pair O.” Codes for therapeutic

procedures, and services with no specific codes,

were then assigned to specific CT pairs according to

the basic decision rules outlined in table 6-6.

Once all claims had been assigned to CT pairs, the

State could calculate the proportion of total list costs

represented by each CT pair. The actual estimated

cost of any given CT pair was then the percentage of

costs represented by that pair, multiplied by $145.15

(the total cost as calculated by the method described

above).

The final step was to determine threshold-specific

cumulative costs. For any given threshold on the list

(e.g., line 587), the State summed the costs of all

individual CT pairs up to and including that line. It

then made two specific adjustments. Both adjust4 Current Procedural Terminology, 4th Edition.

5 ~temtio~ ~ws~lcation of Diseases, 9th EditioL Clinical Modifkation.

6 Dental codes are also used for CT pairs that include dental services.
162 . Evaluation of the Oregon Medicaid Proposal

Table 6-5--Oregon’s Method for Estimating ThresholdSpecific Costs

1.

2.

3.

4.

5.

6.

Assemble private insurance data on utilization and charges

according to ICD-9-CM diagnostic and CPT-4 procedure

codes

Adjust billed charges to reflect Oregon providers’ actual costs

Adjust utilization to reflect lower income population (e.g., more

high-risk maternity cases)

Allocate claims data to appropriate condition-treatment (CT)

pairs based on ICD-9-CM/CPT-4 codes (see table 6-6)

Calculate cost for each CT pair (= percent of total costs

represented by that pair x $145.15 [from full-list per capita cost

calculation])

Calculate cumulative threshold-specific costs at various

thresholds

● Sum costs of individual CT pairs above threshold

● Apply CT-specific substitutions as suggested by the Health

Service Commission

● Assume that 15 percent of all rests below the threshold will

be “upcoded”

SOURCE: Office of Technology Assessment, 1992. Based on data from

Oregon Department of Human Resources, Office of Medical

Assistance Programs, Salem, OR, The Ckgon MedhaidDemonstration Waiver Appli~tion, submitted to the Health Care

Financing Administration, Aug. 16, 1991.

ments were made under the assumption that if low

CT pairs were not covered, some treatments that

would otherwise appear low would be replaced by

substitute treatments in or assigned to higher,

covered CT pairs.

First, the State considered a list of services

provided by the Health Services Commission (HSC)

in which the Commission considered that one

service (i.e., high on the list) could be substituted in

whole or in part for another that was lower on the list

(table 6-7). For any given threshold, the State

assigned substitutable costs from lower (i.e., belowthreshold) to higher (above-threshold) CT pairs. In

other words, it was assumed that any patient needing

one of these ‘‘substitutable’ services appearing

below the cutoff line would gain coverage by

receiving the substitute service above the line.

Second, the State assumed that regardless of the

cutoff line, a certain amount of uncovered services

would be redefined and assigned by the provider to

covered CT pairs. Some of these cases might be

additional cases of substituting one treatment for

another, but in other cases the provider might simply

define the otherwise uncovered service in such away

that it could legitimately appear to fall into a covered

CT pair. (Such “upcoding” could occur in response

to a desire to gain payment for the service, but it

could also be a natural result of physicians trying to

Table 6-6-Basic Rules and Assumptions Used to

Assign Claims to Condition-Treatment (CT) Pairs

Decision steps/assumptions

1. Prepare data

. Identify claims with codes that can and cannot be matched to

codes specified in CT pairs

2. Assign claims with matching codes (i.e., claims for medical and

surgical therapies)

Assign each surgical claim to relevant surgical CT pair

Assign each medical claim with only one relevant CT pair to

that pair

Assign each medical claim with either multiple medical or

multiple surgical matching CT pairs proportionately to relevant pairs

Assign each medical claim with multiple matching CT pairs

that include both surgical and medical therapies so that 90

percent of claim is distributed evenly among medical CT

pairs and 10 percent of claim is distributed evenly among

surgical CT pairs

Summarize total treatment costs assigned to each CT pair on

the list at the end of above steps -

3. Assign claims for ancillary services (which cannot be matched

to specific pairs)

●

●

●

●

●

Summarize each claim by ICD-9-CM code and identify all

possible CT pairs that include that code

Total the existing dollars (from medical/surgical claims)

already assigned to each of the possible pair matches and

calculate the proportion of treatment dollars represented by

each CT pair for that ICD-9 code

Allocate the ancillary costs for that ICD-9-CM code among

the possible CT pairs according to the percentage of

treatment costs for that code in each pair

Repeat for each ancillary-related ICD-9-CM code

Summarize total treatment and ancillary costs assigned to

each CT pair on the list

4. Assign claims for other services that cannot be matched to

specific pairs

. Total the claims for prescription drugs and assign to CT pairs

so that drug costs equal 7 percent of total costs for each pair

. Assign a cost to “comfort care” CT pairs on the assumption

that this cost equals 0.5 percent of total costs

SOURCE: Office of Technology Assessment, 1992. Based on information

in Oregon Department of Human Resources, Office of Medical

Assistance Programs, Salem, OR, The CWgon Meal&id Demonstration Waiver Application, submitted to the Health Care

Financing Administration, Aug. 16, 1991; app. D.

ensure that patients receive the services they are

perceived to need.) For each threshold calculated,

the State assumed that 15 percent of the costs of

services below that threshold would be redefined by

providers in such a way as to fall into CT pairs above

the threshold.

Table 6-8 presents the estimated per capita costs

applicable at various thresholds. Because all diagnostic services are assumed to be covered, and

because many high-cost or high-utilization services

are ranked near the top of the list, per capita costs

accumulate rapidly. Even at a threshold set at CT

pair 200, for example, the State estimates that 60
Chapter Demonstration Program Costs ● 163

Table 6-7-Substitute Services Used in t he ThresholdSpecific Cost Calculation

Line substituted Percentage of service costs

of “substitute from” line

From: To: assumed to be substitutable

209

277

279

291

293

307

309

365

367

367

368

388

397

415

444

483

492

497

502

532

535

564

189

200

118

1

53

181

21

124

95

246

126

253

355

253

64

399

385

385

450

467

445

460

100”/0

100

5

5

10

100

100

100

50

50

100

5

50

10

9

5

20

20

20

10

100

20

588

615

624

637

637

660

686

691

83

159

450

446

447

64

18

239

5

20

5

20

20

5

1

20

NOTE: “Line” refers to condition-treatment pair on prioritized list. Substitutes below shaded line are those that are assumed to occur at the

587 threshold determined by the Oregon legislature.

SOURCE: Adapted from P.R. .Sipes-Metzler, Oregon Heaith Services

Commission, memorandum to S. Hunt, Coopers& Lybrand, San

Francisco, CA, Mar. 15, 1991.

percent of all the costs represented by providing

services on the list would be incurred.

FACTORS AFFECTING COSTS

Caseload Assumptions

One of the most basic and critical assumptions

underlying Oregon’s analysis of the cost of its

proposed demonstration project is the estimate of

how many people would be served under the new

plan.

Number of Eligibles

To estimate the number of State residents who

would qualify for medical assistance under the

demonstration, Oregon relied on pooled estimates

from several years worth of data from the Oregon

Table 6-6-Estimated Per Capita Costs and Percent of

Total List Costs at Selected Threshold “Lines”

(program startup)

Thresholda Per capita cost Percent of total costs

200 . . . . . . . . . . . . . . . . . . . . . $87.12 60.O%

365 . . . . . . . . . . . . . . . . . . . . . 102.26 70.5

478 . . . . . . . . . . . . . . . . . . . . . 117.21 80.8

585 . . . . . . . . . . . . . . . . . . . . . 127.01 87.5

640 . . . . . . . . . . . . . . . . . . . . . 134.61 92.7

709 . . . . . . . . . . . . . . . . . . . . . 145.15 100.0

a ThreShO~ is ~nditjofl-treatrnent pair below WhiCh ServbX would not be

covered.

SOURCE: Based on data from Oregon Department of Human Resources,

Office of Medical Assistance Programs, Salem, OR, The C%egon

Medkxdd Demonstration Waiver Application, submitted to the

Health Care Financing Administration, Aug. 16, 1991.

subsample of the Current Population Survey (CPS),

a national survey undertaken by the U.S. Bureau of

the Census. Since any survey has a degree of

uncertainty in its

worth of data is

accuracy.

Projecting the

estimates, pooling several years

a common measure to increase

future number of people with

incomes below the poverty level also depends on

assumptions regarding the economy and the number

of people who cannot find work. For its estimated

eligibles through the 5 years of the demonstration,

the State assumed a constant unemployment rate

equal to the average U.S. unemployment rate during

1985-88-that is, the rate applicable during the

period represented by the CPS data used as the basis

of caseload calculations. Again, it is impossible to

say that this assumption is too high or too low for

Oregon in the 1990s, but if reality is significantly

different the number of people eligible to participate

could be very different from the prediction.

One important assumption regarding future caseload is the assumption that people currently eligible

will be eligible for the demonstration in roughly the

same numbers as they were in the late 1980s, with a

small increase allowed for general population

growth. Recent information indicates that the Medicaid population in 1991 is much larger than expected

(38). Unless this upsurge in persons eligible under

current rules disappears by mid-1992, the demonstration caseload estimates probably underestimate

the true initial caseloads that will occur. This larger

caseload would increase the total costs of the

Medicaid program under the demonstration (though

it would not necessarily increase the net costs of the

demonstration, since program costs would be higher
164 ● Evaluation Of the Oregon Medicaid Proposal

than originally predicted regardless of whether the

demonstration was approved).

Participation Rate

The proportion of eligible individuals who will

actually participate in the program depends on two

factors: the underlying participation rate at steady

state, and the length of time it takes for individuals

to learn about their eligibility and decide to enroll

(the uptake rate).

Oregon has assumed that, at program steady state,

the base participation rate under the demonstration

for existing eligibility categories will be the same as

in the existing program (72 percent). For newly

eligible individuals, the State adjusted this base rate

for differences in demographic characteristics between current and new eligible groups-that is,

differences in age, sex, family composition, income,

and employment status (177). The adjustment also

accounted for differences in insurance status. (This

adjustment implicitly assumes that more of the

newly eligible population will be covered under

private insurance.) The net result is that newly

eligible persons are projected to have only 59

percent participation in the program (177).

These participation assumptions may be low.

Broader studies of Medicaid programs throughout

the United States have found participation to average 76 percent (95). If Oregon has underestimated

both the speed of implementation and the participation rate of new eligibles in private insurance plans,

then participation may be much higher than 59

percent among new eligibles.

The State expects that it would take several years

to reach these steady-state participation rates. Uptake into the program is assumed to be 40 percent in

the first year and 70,90, and 100 percent in years 2,

3, and 4 of the demonstration, respectively. Thus, the

full expected participation rate for new eligibles is

not predicted to be achieved until the fourth year the

new program is in place.7

The uptake rates could be a slight underestimate

if the unusual level of publicity received by the

proposal resulted in faster-than-usual enrollment of

eligible individuals. Also, according to the Congressional Budget Office (CBO), national Medicaid

estimates usually assume a faster uptake rate for new

programs, with 100 percent uptake (i.e., steady-state

participation rate) reached by year 3 (237).

Oregon performed sensitivity analyses on its

participation and uptake assumptions. If, as the

above discussion implies, the baseline assumptions

understate what might actually occur, these sensitivity analyses can give some sense of the magnitude of

costs affected by their use.

According to the State’s analysis, assuming that

new-eligible participation is 69 rather than 59

percent raises the net demonstration costs by 37

percent (or $75 million). Assuming a faster uptake of

that population (50, 80, and 100 percent in years 1,

2, and 3) raises net costs by 16 percent ($33 million).

Participation and uptake rates that were higher than

baseline but lower than the ‘upper bound’ rates that

Oregon’s sensitivity analysis examined would result

in less dramatic cost increases.

The State did not perform a sensitivity analysis on

both high-rate and high-uptake assumptions simultaneously. Since uptake and participation may interact, the effect of both high assumptions occurring

simultaneously cannot be estimated without the

model. Even without interactive effects, however,

the simple effect of both assumptions in place would

probably beat least $108 million ($75 million + $33

million), or an increase of over 50 percent in net

demonstration costs.

Utilization Assumptions

Most of the basic utilization assumptions derive

from the inherent characteristics of the data sources

used to estimate utilization under the demonstration.

Oregon Medicaid claims data were used to estimate

future utilization by current eligibles and new

categorical-type eligibles and for currently covered

services; in this case, the underlying assumption is

that utilization for this group and these services will

be unchanged. Blue Shield of California data were

used for estimates of utilization of new services and

for noncategorical groups newly eligible under the

demonstration. 8

If unadjusted, the use of the Blue Shield data

would assume that this population would use

services at the same rate as privately insured

7 It is ~t en~ely cl~~m the waiver application whether these uptake rates apply only to the newly eligible population but State Medicaid Offichds

confirm that they do (2 12).

8 Blue Cross/Blue Shield of Oregon data were used to adjust the more comprehensive California data for State-specKlc differences.
Chapter Demonstration Program Costs ● 165

individuals. The State, recognizing that it is unlikely

that poor individuals who have newly received

access to publicly financed health care will use

services at the same rate as individuals with private

insurance, adjusted the Blue Shield data to reflect

certain additional assumptions about how the two

populations might differ. For example, the newly

eligible population should include very few pregnant women and young children, since these groups

are eligible up to 133 percent of the poverty level

under current rules.

In addition, the State assumed that the newly

eligible Medicaid population would be both younger

and have a higher prevalence of males than a

standard commercially insured population. It translated this assumption into a quantitative assumption

that, even after maternity and newborn claims were

removed, the newly eligible population would incur

health care costs of only 89 percent of what the Blue

Shield population incurred. Total “list” costs for

new eligibles were adjusted downward accordingly.

These adjustments to the Blue Shield data all

assume that the newly eligible Medicaid population

will, by nature of its demographics, use fewer

services and incur fewer costs than a standard

privately insured population. This assumption is a

reasonable one for program steady state. What is not

known, however, is the extent of ‘pent-up demand’

for services that may exist in the first few years of a

new program targeted to a previously uninsured

population. If newly eligible persons have preexisting health problems that have gone untreated

while these individuals were uninsured, demonstration program costs could be higher than estimated.9

Assumptions Relating to CT Pair Assignment

To translate existing data into the proper form for

projecting demonstration costs, Oregon assigned

codes for services (and associated costs) from past

claims to the CT pairs on the new list that appeared

to best correspond. Assigning codes correctly to the

appropriate pairs above and below the line is crucial

to correctly estimating the cost of covered services.

The State faced potential coding assignment

errors at three different levels. First, codes could

have been ‘‘incomectly’ assigned to CT pairs in the

list as it stood at the time of code assignment (e.g.,

because of the ambiguities in how to allocate many

services across CT pairs). Second, the list--or rules

for assigning codes--could change after the cost

estimate was made but before the program was

implemented. And third, when the list is implemented, providers may code services differently

than the actuaries did at the time the list was

“costed.” Each of these potential errors can affect

whether the estimated cost of providing services

through line 587 would bean accurate projection of

final program costs.

Coding Assignment at the Time

the List Was “Costed”

Given the inherent uncertainties in translating

codes to CT pairs, Oregon’s method for doing so

appears basically sound. Treatment codes were

matched as well as possible; ancillary codes were

assigned proportionately to relevant pairs based on

accompanying diagnosis; and drugs, for which

claims carry no accompanying diagnosis, were

distributed proportionately across the entire list.

Nonetheless, the inherent uncertainties remain,

and the resulting cost estimates could be either

exaggerated or understated. For example, it could be

that in fact drugs would be prescribed disproportionately for CT pairs above line 587. If this were the

case, the costs of treating patients with covered

services would have been underestimated. Clearly,

the converse can also be true. Neither the magnitude

nor the direction of any possible error can be

estimated based on existing data and analyses.

Similarly, the State’s judgment regarding which

diagnostic codes should be assigned to a hypothetical ‘‘CT pair O’ (and covered regardless of the

cutoff threshold on the list) could result in under- or

overestimates of cost. A particularly sensitive issue

is whether hospital diagnostic procedures will in fact

be covered when the condition ultimately established as the diagnosis lies below the line. Hospital

Medicaid bills (which in Oregon are based on

diagnosis-related groups) do not distinguish between services performed before and after the

diagnosis is made, and all but hospitals participating

9 Oregon recognized the possibility of “pent-up demand’ but assumed that any subpopuktion of new eligibles with higher-than-expected utihation

would be balanced by subpopulations with little demand, and by low demand resulting fmm the time it would take new enrollees to ‘ ‘kxirn the system. ’

It seems to OTA, however, that the result will still not quite balance. The underlying data from the commercial insurance population aheady account

for ‘‘no demand’ eligibles in their own averages, and the fact that new enrollees must learn the system simply postpones, rather than eliminates, their

expected utilization.
166 ● Evaluation of the Oregon Medicaid Proposal

in fully capitated plans would still bill separately for

services. The State plans to devise an administrative

mechanism to address this problem (212), but the

solution may take time to implement and could

entail its own problems. Until then, the Medicaid

program must either overpay for services (e.g., by

paying for any hospital service performed during the

initial stay that includes the diagnostic workup),

underpay for services (by denying payment for

diagnostic services accompanying bills for below-theline procedures), or incur high administrative costs

(in order to estimate what proportion of the hospital

bill is related to diagnostic services).

Coding Errors in the Initial List

The prioritized list used by Oregon’s contractors

and by the legislature was not exactly the list that

will be implemented when and if the demonstration

begins. Although the number and order of CT pairs

have not changed since the HSC transmitted the list

to the legislature, the HSC has made technical

corrections to the list as code- and service-specific

errors have become apparent. These technical corrections could have implications for the accuracy of

the cost analysis.

One type of technical ‘error’ lay in unintentionally omitting codes from the list. Those codes must

still be assigned to CT pairs, since the list is to be a

comprehensive one. The original code allocation

method used in costing various thresholds on the list

essentially assumed that services with unmatched

codes were spread proportionately throughout the

entire list. If, after correcting the list, these codes and

their associated costs are disproportionately placed

above line 587, costs will have been underestimated.

Conversely, assigning more “missing” codes to CT

pairs below the line will result in the cost estimate

for covered services being too high.

Other codes may have appeared on the list used by

the State’s contractors in the cost analysis, but they

may have appeared in incorrect CT pairs. For

example, the HSC has informed the Office of

Technology Assessment (OTA) that some above-theline codes that appeared to be new benefits (e.g.,

tissue expanders) were not intended to be benefits

for many of the conditions with which they are

currently associated on the list, and they may be

reassigned to CT pairs below the line (35). Other

codes that appear in CT pairs that are below the line

(e.g., codes for medical therapy for myasthenia

gravis) might at some point, according to the HSC,

be moved up to covered CT pairs (1 19).

Regardless of whether codes are added or moved

between CT pairs, the result is that the list that

providers must follow would not be identical to the

list that was used in the cost analysis. No technical

corrections were final as of March 1992, so again

their impact on costs cannot be assessed in either

magnitude or direction. However, if in the final

technical corrections costs associated with added or

shifted codes are disproportionately assigned to

covered CT pairs, the result will be higher program

costs than anticipated. (The converse may also be

true, but it seems to OTA to be less likely.)

Provider Coding

Many medical diagnoses are not clear-cut and

distinct, and a patient may frequently fit logically

into more than one diagnostic category. A patient

with ill-defined breathing difficulties, for example,

might sometimes legitimately be considered to have

either chronic bronchitis or emphysema. Similarly,

a patient with terminal cancer who is in respiratory

failure might be described according to either the

immediate problem or the underlying disease.

In each of these examples, one service (treatment

for chronic bronchitis; aggressive therapy for terminal cancer) lies below the line and is uncovered,

while the other (respiratory failure; emphysema)

ranks higher and would be covered. Given the

prioritized list as it currently stands, and absent any

additional instructions or information, clinicians

could legitimately choose to categorize patients into

either covered or uncovered CT pairs. (The State is

developing instructions for using the prioritized list,

but the breadth and extent of detail to be included is

not known.)

Oregon’s method for allocating services for the

purposes of costing the list generally assumes that

physicians are neutral to financial and emotional

incentives when coding the services they provide.

However, the State did make one major adjustment

to accommodate any changes in coding practice that

might affect coverage. It assumed that 15 percent of

the costs of services that would be uncovered under

current medical and coding practice would be coded

into covered CT pairs under the demonstration and

paid accordingly (177). Of this 15 percent, 10

percent was assumed to result from general changes

in medical practice and coding decisions, and the
Chapter 6--Demonstration Program Costs ● 167

remaining 5 percent was assumed to result from the

continued prescribing of drugs for uncovered conditions (which cannot be monitored easily) (98).

Some allowance for changes in coding practice

(and medical practice) as a result of implementing

the list is certainly appropriate. It is impossible to

say whether 15 percent would be the correct amount

in reality, particularly since the State has not yet

developed either detailed CT pair assignment instructions or methods for scrutinizing suspect categorization. Given the strong financial incentives to

receive payment for specific services provided in the

fee-for-service sector, changes in coding practice

may be greater than 15 percent for the patients

served outside of prepaid managed care. Prepaid

providers have no financial incentive to “upcode,”

however, since for them upcoding is not directly

linked to increased payment. Increased use of

above-the-line services in the prepaid sector would

be limited to actual service substitutions and any

desire of physicians to justify certain services to

their own administrators. Thus, the 15 percent

assumption seems a reasonable middle ‘best guess.

The actual percentage could be lower if managed

care providers are especially successful at eliminating the use of therapies associated with uncovered

CT pairs; it could be higher if they are not successful

at controlling such prescribing or if Oregon fails to

meet its goal of enrolling the majority of eligible

Medicaid beneficiaries in prepaid managed care (see

below).

Delivery System Assumptions

The basic method used to derive costs was based

on fee-for-service data. Oregon’s demonstration,

however, proposes that all Medicaid demonstration

enrollees will be in some form of managed care, and

three-fourths will be enrolled in prepaid plans. The

State assumes that managed care will be associated

with substantial cost savings over what fee-forservice expenditures would have been. Specific

savings assumptions, as presented in the waiver

application, are summarized in table 6-9.

Savings Associated With Managed Care

The assumption that managed care (particularly

prepaid managed care) lowers health care costs is the

major premise behind its increasing use in Medicaid

programs. Oregon assumes in its cost estimate that

primary care case management will save some costs,

primarily through averted emergency room use and

hospital admissions. Prepaid care is assumed to have

an even greater effect on hospital-associated savings

and have some general efficiency-related cost savings as well.

Oregon’s savings assumptions for managed care

are based on its own experience with Medicaid

managed care over the past few years. An analysis

performed on the State’s behalf estimated program

savings during the 31⁄2 year period from March 1985

through September 1988. It found that although

program costs increased during the frost 6 months of

the managed care program, savings were positive

and increasing in each of the succeeding 3 years (41).

Table 6-9-Savings Assumptions for Managed Care

(savings compared with fee-for-service scenario)

Type of provider Percent savingsa Enrollees to whom savings apply

Fully capitated health plan. . . . . . . . . . . . . 25% AFDC, PLM, new eligibles

12.5% GA

Partially cavitated health plan. . . . . . . . . . 13% AFDC, PLM, new eligibles

6%

(6% average for all enrollees and services)

Primary care case management . . . . . . . . 9% AFDC, PLM, new eligibles

4.5% GA

(4% average for all enrollees and services)

KEY: AFDC = Aid to Families with Dependent Children; PLM = poverty-level pregnant women and children (incomes

up to 133% of the Federal poverty level); GA = State general assistance eligibles.

a ~ving~ ap~y t. all hospital care ex~pt maternity and newborn care. Medicaid maternity/neWbOrn care is already

case-managed. Physician and pharmacy servicss for general assistance enrollees are also case-managed.

SOURCE: Based on data from Oregon Department of Human Resources, Office of Medical Assistance Programs,

Salem, OR, The Uregon IWedkxud Demonstration Waiver A@cation, submitted to the Health Care

Financing Administration, Aug. 16, 1991; L. Read, Office of Medical Assistance Programs, Salem, OR,

personal communication, Jan. 16, 1992.
168 . Evaluation of the Oregon Medicaid Proposal

Studies of other Medicaid managed care demonstration projects have found some promising effects.

An analysis of six Medicaid projects found that

utilization did decrease, particularly emergency

room utilization, but that cost savings were more

difficult to achieve, particularly in the frost year of

the demonstrations (72). A detailed analysis of

Utah’s Medicaid managed care program (which

included both prepaid and case-managed fee-forservice components) found that the program decreased hospital outpatient utilization (including

emergency room use) but increased use of primary

care, specialist, and prescription drug services (130).

Consequently, costs for ambulatory care in this

program increased in the early years of the program.

The Congressional Budget Office (CBO) found

that Oregon’s savings assumptions for the various

forms of managed care were generally higher than

used in national estimates based on existing studies

(237). CBO concluded that Oregon’s savings assumptions for managed care may be optimistic. The

State is confident that its past experience with

Medicaid managed care makes its savings assumptions realistic (212). Still, if managed care savings

under the demonstration were to differ from those

assumed in the cost estimate, the literature suggests

that the error would be in the direction of overestimating savings and underestimating costs.

Implementation of Managed Care10

Managed care savings in the demonstration project are predicated on the assumption that a managed

care system will be fully in place by the end of the

first year of the new program. Meeting this goal is

probably the greatest challenge to realizing the

expected savings from managed care.

The greatest expected savings are to come from

fully capitated prepaid care plans. Fewer than 12,000

Medicaid beneficiaries are currently enrolled in such

a plan; under the waiver, over 100,000 beneficiaries

are to be fidl-cavitation enrollees. The General

Accounting Office has expressed skepticism regarding whether Oregon’s current partially capitated

Medicaid providers can organize and contract sufficiently quickly to meet this goal (238). Nonetheless,

the State believes it is on schedule thus far for the

expansion of fully capitated care (212).11

In addition to greatly expanding its contracts with

fully capitated plans, the State must recruit more

providers into partially capitated plans and recruit

primary care case managers for the 18 rural counties

of the State that are expected to be predominately

fee-for-service. Health personnel shortages and the

need to negotiate with public health departments and

federally qualified health clinics in these counties

may make recruiting case managers difficult and

time-consuming (see ch. 4). Again,the State believes it is on schedule for its overall managed care

expansions. If the expansion continues in a timely

manner, assumptions based on managed care savings will be reasonable. Any future delay in implementation, however, would cause costs to be higher

than predicted.

Any unexpected variation in the numbers of

enrollees could increase (or diminish) the problem.

For instance, the State assumes a uniform increase in

eligible persons over time in all counties. If, due to

high local unemployment or other reasons, Medicaid

enrollment in certain counties were higher than the

predicted average, these counties must attract more

Medicaid managed care providers to fill the demand.

This problem may be particularly acute in rural

counties, where physicians are sometimes in short

supply and primary care case management may take

some time to implement in any case.

After the frost year, continued participation of

both prepaid providers and primary care case managers may depend in part on whether providers

continue to consider payment rates to be adequate to

cover their own individual costs (see ch. 4). Continued participation would also depend on the degree of

administrative costs and difficulties the providers

incur. Again, if providers remain satisfied with their

payments and responsibilities, Oregon’s baseline

cost estimate would remain valid. If they become

dissatisfied, however, the result would almost certainly be to increase program costs. Constraining

payment rates below what providers would be

willing to accept might decrease participation,

reducing the possibilities for savings through managed care. Raising rates, on the other hand, would

raise program costs in its own right. Thus, for both

initial provider recruitment and long-term provider

10 sw ch. 4 for a more detailed discussion of the proposed managed we SyStem.

11 me ~egon Medi@d pro- has letters of intent to participate as filly capitated health plans from plans with MI identifial SM-Up Hpi3City Of

158,200 enrollees (212).
Chapter 6--Demonstration Program Costs ● 169

participation, uncertainties operate in the direction

of increasing program costs.

Other Program-Specific Assumptions

Demonstration Administration and Management

A critical component of the original State legislation authorizing the demonstration, Senate Bill (SB)

27, was that unexpected program cost increases

could be controlled by decreasing benefit coverage

for enrollees. In 1993 and 1995, the State legislature

meets and can, if it chooses, establish a threshold

either higher or lower than CT pair 587 on the

prioritized list. If costs in the interim have been

higher than expected, the legislature might choose to

reduce benefits to bring future costs in line with

projected expenditures.

In addition, SB 27 made provisions for costs

exceeding the allotted budget in the midst of the

2-year budget cycle. If, for example, it became

apparent in the fall of 1994 that costs were to greatly

exceed appropriated funds for the 1993-95 period,

the State could reduce benefits as necessary (subject,

presumably, to some level of Health Care Financing

Administration (HCFA) oversight in the context of

the Federal waiver). Alternatively, the State emergency fired overseers could choose to allocate funds

to make up the difference if those funds were

available.

A critical question is how rapidly the State could

reduce expenses in mid-cycle by restricting benefits,

and what the consequence of such a reduction would

be. For fee-for-service providers, reducing benefits

would simply mean that from that time forward,

providing these services brings no payment. For

prepaid providers, the model contract proposed by

the State allows the State to lower the benefit

package, if necessary, within 60 days of legislative

approval of the change in benefits (174). The

cavitation rate would be lowered to reflect the

change in benefits. Prepaid providers could withdraw from participation in the program if these

events occurred. In the long run, the effect of

mid-cycle benefit reductions (if they occur) on

program costs would thus depend heavily on whether

prepaid providers withdraw their participation in the

program, endangering anticipated managed care

savings.

Health Care Cost Inflation

Any projection of costs forward in time requires

some assumption regarding underlying cost inflation. Oregon assumed that Medicaid costs in any

given sector (e.g., acute care, long-term care) would

rise in the future at the same underlying rate as that

actually experienced in recent years. This rate was

calculated as the average actual and estimated

program cost increases in that sector during the years

1987-91, with some additional adjustments to specifically address hospital trends for 1991-93 (212).

This approach is a reasonable and simple one,

given the level of uncertainty in any forecast.

Nonetheless, under- or overestimating the underlying rate of inflation could have a major effect on the

difference between real and expected program costs.

If, for example, costs have been increasing at an

increasing rate, projecting forward an average of

past inflation rates would probably underestimate

future inflation.

In fact, nationally, this appears to be the case. The

Consumer Price Index for medical care rose from a

6.6 percent increase in prices during 1987 to a 7.7

percent increase in 1989 and increases of 8.5, 9.0,

and 9.3 percent in the frost three quarters of 1990,

respectively (127). If Oregon’s Medicaid expenditures have followed a similar pattern, future cost

inflation may have been

analysis.

Assumptions Affecting

Medicare Costs

underestimated in the

Nonprogram Costs

Oregon’s cost analysis includes an assumption

that the implementation of the demonstration will

reduce Federal Medicare expenditures by $33.7

million. The savings in this case would derive not

directly from the Medicaid demonstration but as a

consequence of the associated mandated health

insurance program for small employers, which is to

be implemented only if the Medicaid demonstration

goes forward (see ch. 2). SB 27 required that all

Medicare beneficiaries who are employed by qualifying firms will become covered under this insurance program, making Medicare a secondary payor.

The demonstration itself may also have some

effect on Medicare costs by increasing Medicare

disproportionate share payments to hospitals. At

present, Medicare hospital reimbursements on behalf of its own beneficiaries include an adjustment
170 . Evaluation of the Oregon Medicaid Proposal

that is intended to compensate certain hospitals for

extra costs associated with serving a disproportionately low-income patient population. The amount of

this adjustment depends on the size and location of

a hospital and the proportion of its patient days

attributed to Medicare Supplemental Security Income recipients and Medicaid beneficiaries. Thus,

as the proportion of hospital patients enrolled in

Medicaid increases, Medicare payments also increase. Covering previously uninsured patients under

Medicaid, as the demonstration proposes, will raise

Medicare hospital payments unless accompanied by

a proportionate decrease in Medicaid hospital stays

due to managed care.

(Medicaid itself also makes payments to disproportionate share hospitals, although States are permitted some leeway in defining which hospitals are

eligible for payments and how much additional

payment they receive. It is not clear what effect a

greater Medicaid-covered population will have on

Oregon Medicaid payments, since many hospital

stays will be covered under prepaid cavitation

contracts and Oregon could choose to change

payment rules to offset anticipated greater costs.

Nonetheless, this is another potential source of

Medicaid program costs that could be greater than

anticipated.)

Other Federal Costs

From a Federal budget perspective, a potentially

significant assumption of the demonstration cost

estimate is that the demonstration, and the small

employer insurance mandate that depends on its

approval, will not reduce Federal tax revenues.

CBO, challenging this assumption, has testified:

To the extent that employers would have to pay

for new [insurance] policies, their profits would be

reduced, resulting in lower corporate tax payments to

the federal government. Alternatively, if the costs of

the insurance policies were passed back to the

employees in the form of lower (or more slowly

increasing) monetary wages, personal income tax

and payroll tax revenues would decline by about

one-fourth of the increase in health premiums (237).

The State, although acknowledging this effect,

argues that the Medicaid and small employer programs will reduce the need to subsidize uninsured

care through high insurance premiums and will

increase the incomes of health care providers

(through greater health care utilization). Thus, it

argues, corporate savings (from lower insurance

premiums) and higher provider incomes will result

in Federal tax revenue increases that will offset the

losses described by CBO (212). Although the effects

described by Oregon may well occur, OTA is

skeptical that the gains will entirely offset the losses.

Another legitimate Federal concern regarding

demonstration funding and expenditures relates to

the recent passage of Oregon Ballot Measure 5,

which restricts the property taxing capability of local

governments and requires the State government to

redirect a greater proportion of State spending

toward education in order to make up the difference.

This law has caused concern regarding Oregon’s

ability to maintain its current level of Medicaid

spending, and the State is making contingency plans

for reducing spending if necessary (150). In light of

this, it is unclear to OTA how the State could raise

sufficient funds to pay its share of increased

Medicaid costs related to the demonstration, even if

the incremental demonstration cost were no higher

than predicted.

IMPLICATIONS FOR BENEFITS

If Oregon has overestimated the costs of conducting the proposed demonstration, the consequences

for benefits are few and positive. The State could

choose to lower the threshold below CT pair 587,

enabling coverage for such conditions as back

sprains, viral hepatitis, and breast reconstruction

(CT’ pairs 594,597, and 600, respectively). Or, the

State could choose to redirect the savings toward

improving outreach, expanding the eligible population, higher reimbursement for providers, or any of

the myriad non-Medicaid programs funded by the

State.

On balance, however, it seems more likely that

Oregon has underestimated the costs and overestimated the initial savings of the program than the

reverse. If this proves to be the case, the implications

for program benefits could be substantial. As designed, the demonstration program has two options

in the face of higher-than-predicted costs: increase

expenditures, which is possible only if both the

funds and the will exist; or reduce benefits by

moving the threshold up the list.

Raising the threshold carries with it two implications. First, the State may need to eliminate a

substantial number of CT pairs to gain even a small

savings, because the bulk of program costs are

accounted for early in the list. (All diagnostic
Chapter 6--Demonstration Program Costs . 171

Table 6-10-Examples of Condition-Treatment (CT) Pairs Excluded Under

Four Scenarios of Higher Costsa

Baseline threshold: CT pair 587

Per capita monthly rest: $129.44

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scenario New threshold Examples of CT pairs excludedc

1% cost overrun

Reduce per capita costs by $1.29

5% cost overrun

Reduce per capita costs by $6.46

10% cost overrun

Reduce per capita costsby$12.94

15% cost overrun

Reduce per capita costs by $19.42

CT pair 585 587—Esophagitis

586--Spondylosis

CT pair 503 573-Chronic sinusitis

569--Rib fracture

544-Spine deformities

533--Minor burns

515-Pituitary dwarfism

514-Acute polio

506-Muscular dystrophy

504-Hernia repair (unobstructed)

(plus all pairs Iisted above)

CT pair 475 503--Goiter/thyroidectomy

498-Ovarian cyst/oophorectomy

494-Tonsillectomy, adenoidectomy

492—Paraplegia/surgery

489--Stomatitis, oral abcess

483--Osteoarthritis

480--Surgery for impacted teeth

477-Hearing loss over age 3

(plus all palrs listed above)

CT pair 420 469--Endometriosis

466--Complicated hemmorhoids

447-Limb deformities

440-Cerebral palsy/repair, reconstruction

434-Lice

431—Migraine

425--Refraction/glasses

423--Osteoporosis

(plus all oaks listed above)

a ~um= all ne~~ cost reductions are obtained by decreasing benefits.

b Newthr=hol~ Iwerthan CT ~air~o are aPProXimat~, b~~ on the information in thewaiverappli~tion. Detailed

line-by-line costs were not available for more precise estimates.

c ~e aW. D for complete destiptions of CT pairs.

SOURCE: Office of Technology Assessment, 1992, calculated from information in Oregon Department of Human

Resourcas, Office of Medical Assistance Programs, Salem, OR, The ~egon Msdicaid Demonstration

Waiver Application, submitted to the Health Care Financing Administration, Aug. 16, 1991.

services are covered, for example, and many highcost conditions rank high on the list.) Second, by

design, conditions increase in presumed importance

as one progresses up the list. Thus, the further up the

list the threshold is drawn, the greater the presumed

risk of causing harm to beneficiaries by eliminating

coverage.

Table 6-10 illustrates the degree of CT pair

elimination needed to redress even relatively small

cost overruns through the use of the prioritized list

alone. Even reducing per capita costs by 5 percent,

if the State anticipated an equivalent expenditure

excess, would require eliminating 84 CT pairs, or 14

percent of all CT pairs currently proposed to be

covered. A 15 percent cost overrun in the first 2 years

could, in the absence of greater funding, require the

State legislature to eliminate approximately 167 CT

pairs (28 percent of currently covered pairs).

Despite the apparent barriers, however, it is

possible that the consequences of eliminating benefits would lead Oregonians to find ways to supplement program funds if necessary. The prevalence

and severity of many of the conditions whose

treatment would be eliminated in such a scenario

implies that the health consequences would be

significant and measurable. Furthermore, the pub-
172 ● Evaluation of the Oregon Medicaid Proposal

lie’s familiarity with such conditions as muscular

dystrophy, hearing loss, and limb deformities could

make the elimination of treatment for many of these

conditions politically untenable.

In fact, if there were to be enough public concern

with the consequences of cutting treatments for

well-known conditions, the State legislature could

even be faced with amending SB 27 so that other

measures (e.g., limiting program enrollment) would

again become possible. Thus, if costs actually have

been significantly underestimated, the demonstration would become an interesting test of the relative

strengths in Oregon of taxpayer resistance, public

opinion, and political will.

SUMMARY OF CONCLUSIONS

The State of Oregon has used a reasonable

approach for the difficult task of estimating the costs

of the proposed demonstration program. Most of the

assumptions behind the cost analysis are defensible

“best guesses” in light of the sparse information

available when the analysis was done.

Nonetheless, despite the State’s best efforts, its

cost estimate may be low. Several important assumptions have one-sided errors; if the assumption

is wrong, the result would probably be to underrater than to overestimate program costs.

Any delay in the full implementation of the

planned managed care system would probably raise

costs, for example, since managed care savings are

a crucial assumption of the cost estimate. Even under

full implementation, managed care savings that were

not as great as expected would result in higher-thanexpected program costs.

In addition, the administrative difficulty of limiting use of services associated with below-the-line

CT pairs in the fee-for-service sector makes moving

to prepaid managed care critical to keeping costs

low. (In the short run, for instance, the State may be

unable to link certain medical products and services,

such as home medical equipment and prescription

drugs, with specific diagnoses. Although the State

accounted for some of this problem in the cost

estimate, any delay in enrolling persons in managed

care would exaggerate the problem.) Also, incentives for “upcoding" services into covered CT pairs

is greater in the fee-for-service sector than in prepaid

managed care.

Program costs could be slightly higher than

expected if some “technical fixes” to the program

are necessary to avoid unintentional consequences

of the initial list (e.g., very effective services

inadvertently grouped with ineffective ones and

ranked low). Such costs could be reduced, or

counterbalanced, through internal administrative

measures (e.g., stricter utilization controls, eliminating outreach efforts), but only at the expense of

inhibiting access to the program or its services.

The waiver cost estimate does not include any

incremental costs due to including mental health and

chemical dependency services in the demonstration,

or any costs associated with folding into the

demonstration elderly and disabled beneficiaries.

Including these services and populations in the

demonstration in the future would increase the total

costs of the proposed program, adding another layer

of uncertainty to demonstration costs that could

exacerbate any cost estimation error.

Some costs external to the program, but relevant

to Federal fiscal concerns, may also have been

underestimated. In particular, CBO has predicted a

loss of Federal tax revenues if the State implements

the associated mandate requiring small businesses to

provide health insurance. (This revenue loss was not

accounted for in the cost analysis, although savings

predicted from this mandate were included. The

State maintains that Federal revenue loss from this

source would be negligible.) Also, if Oregon’s

passage of Ballot Measure 5 decreases the State

funds available to the Medicaid program, as it is

predicted to do, the State maybe unable to furnish

its full share of demonstration funding even if

program costs have been estimated correctly.
Chapter 7

Federal Legal Issues
—

INTRODUCTION . . . . . . . . . . .

CONSTITUTIONAL ISSUES .

Federal Constitutional Issues

Oregon Constitutional Issues

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FEDERAL STATUTORY ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“Anti-Dumping” and Other Federal Laws Relating to Health Care Access . . . . . . . .

Protection of Human Research Subjects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal Civil Rights Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY OF CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Box

Page

175

175

175

179

180

180

182

183

188

Box

7-A. The Legislative Language or the Code?

the Codification of Oregon Senate Bill

Page

Potential Implications of

27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Chapter 7

Federal Legal Issues1

INTRODUCTION

As discussed in previous chapters, Oregon’s

Medicaid proposal would substantially change the

benefits covered under the program, the populations

eligible for those benefits, and the relationships of

patients and providers. The State has applied to the

U.S. Health Care Financing Administration (HCFA)

for permission to waive certain provisions of the

Medicaid statute in order to proceed with the

proposal as a demonstration project, and HCFA

believes it has the authority to grant those waivers.

It is possible, however, that Oregon’s proposal

might be in conflict not only with existing Medicaid

rules but with provisions of other Federal statutes,

which only Congress can waive. Congress could

also opt to knit any HCFA-approved Medicaid

waiver, leaving the Oregon proposal subject to the

limits imposed by these other Federal statutes and

vulnerable to judicial attack if they are violated.

Of even greater importance, the proposal might

come into conflict with the U.S. Constitution. Since

neither HCFA nor Congress can overcome constitutional objections (short of a constitutional amendment), examining potential constitutional issues

raised by the proposal is a critical first step in

assessing its legality from the Federal perspective.

This chapter first analyzes whether certain aspects

of the Oregon proposal might be considered violations of Federal constitutional law, either on their

face or in their (likely) application. It also considers

the applicability of Oregon State constitutional

principles that parallel the Federal principles. The

chapter then analyzes various important Federal

statutes (apart from the Federal Medicaid statute)

that might be relevant to the Oregon scheme.

CONSTITUTIONAL ISSUES

Federal Constitutional Issues

The most basic Federal constitutional principle

regarding social welfare programs is straightforward. There is nothing in the U.S. Constitution that

requires the Federal Government or the States to

provide social welfare benefits of any kind (DeShaney v. Winnebago County Department of Social

Services, 489 U.S. 189, 196 (1989)). Congress--or

the State of Oregon-can choose to enact or repeal

Medicaid, Aid to Families with Dependent Children

(AFDC), or any other social welfare program

without any judicial oversight of the wisdom or

rationale for doing so.

Once a social welfare program has been established, however, there are some constitutional constraints on the government’s discretion to limit or

condition the benefits that are made available. The

most notable of these is the nondiscrimination

requirement of equal protection imposed by the 5th

and 14th Amendments. Under most circumstances,

however, the impact of these constraints on legislative discretion is minimal. Generally, the court need

only find that the legislative scheme is ‘‘rational"—

e.g., that a spending limit or condition will conserve

government resources, ease the administration of the

program, or further virtually any governmental

policy not specifically prohibited by the Constitution. Under the “rationality” standard of judicial

review, the actual motivation behind the legislation

is irrelevant, and there is no real judicial examination

of the actual effects of the legislation.

There are two circumstances under which a limit

or condition imposed on a social welfare program

may be subjected to a more rigorous level of judicial

review. The first occurs when a legislative scheme to

limit a social program “affects” a “fundamental

interest. ” The second occurs when the scheme will

detrimentally affect a “suspect class” of persons.

Protecting “Fundamental Interests”

To be regarded as a “fundamental interest,’ an

activity must be both extremely important and

explicitly protected by the Constitution (San Antonio Independent School District v, Rodriguez, 411

U.S. 1 (1971)). The latter requirement in particular

defines "fundamental interest" inherently narrowly,

including only such activities as speech, interstate

1 This chapter was written by staff of the OffIce of Technology Assessment (OTA). Portions of the chapter are based on a series of memoranda

authored by K. Wing, School of Law, University of Puget Sound, Thcoma, WA, under contract to OTA, November 1991. OTA bears the responsibility

for the content and conclusions of this chapter.

–175-
176 . Evaluation of the Oregon Medicaid Proposal

travel, religion, and a few other interests specifically

protected by the Federal Constitution. Other activities--e.g., public school education-may be extremely important, but if they are not explicitly

protected by the Federal Constitution they are not

considered ‘‘fundamental’ for the purpose of enhanced judicial review.

Furthermore, in the U.S. Supreme Court’s view,

a decision not to fund an activity or interest, even one

that is entitled to enhanced constitutional protection,

does not necessarily ‘affect’ that activity or interest

(see, e.g., Webster v. Reproductive Health Services,

492 U.S. 490 (1989); Rust v. Sullivan, 111 S. Ct.

1759,59 U.S.L.W. 4451 (1991)). Thus, for example,

a legislative decision to exclude funding for abortions (but fund childbirth) is constitutional as long as

it meets the limited test of “rationality;’ and under

a “rationality” standard, a claim that the government chooses to encourage childbirth over abortion

is sufficient (Beal v. Doe, 432 U.S. 438 (1977);

Maher v. Roe, 432 U.S. 464 (1977); Harris v.

McRae, 448 U.S. 297 (1980)).2 Similarly, the Court

has found that disparities in eligibility rules for

social programs (e.g., AFDC and Medicaid) generally do not “affect’ a “fundamental interest” even

when certain individuals are disadvantaged as a

result of the rules (Jefferson v. Hackney, 406 U.S.

535 (1972); Schweiker v. Hogan, 457 U.S. 569

(1982); Bowen v. Gilliard, 483 U.S. 587 (1987)).

The Court has required only that Congress and the

States show some ‘‘rational” basis for eligibility

differences or rule changes. Saving resources meets

this criterion.

There are two narrowly defined, related sets of

circumstances under which modern courts may still

view a “fundamental interest” as “affected’ by a

social welfare limit or condition and, therefore,

impose a more demanding judicial review on the

legislation and its justification. The first is where a

condition or limit on a social welfare scheme is

viewed as “penalizing” the exercise of a “fundamental interest. ’ The second is where the limit or

condition prohibits the program participant from

engaging (while receiving funds) in a constitutionally protected activity that is outside the scope of

the activities funded under the program.

In Shapiro v. Thompson (394 U.S. 618 (1969)),

for instance, the Supreme Court held that a durational residency requirement imposed on AFDC

participants was a violation of equal protection

because it “penalized” otherwise eligible participants who had recently exercised their constitutionally protected ‘‘right to travel” (more aptly described as a ‘‘right to become a State resident”). As

such, the Court was required to ‘closely scrutinize”

the legislation. It demanded that the State show a

“compelling interest” for the limit on welfare

eligibility and that the impact on the excluded

individual’s fundamental right was minimal. Furthermore, Shapiro implied that under “close scrutiny” any social welfare program limit or condition

that was imposed merely to save government funds

would be unconstitutional per se.

The Court has indicated that it also may view a

‘‘fundamental interest’ as ‘‘affected” when a recipient is prohibited from engaging in a protected

activity as a condition of the receipt of funds for

other activities. For example, the Court has held that

a Federal prohibition on “editorializing” by noncommercial radio and television stations that receive

Federal funds “affected” the speech of those

stations because it prohibited editorials that might be

funded from nonpublic sources (FCC v. League of

Women Voters of California, 468 U.S. 364 (1984)).

As with the “penalty” cases, the Court was apparently attempting to distinguish between circumstances

where the spending limit or condition merely fails to

subsidize or fired an activity, as in the Medicaid

abortion decisions cited above, and those where the

limit or condition is intended to inhibit other

nonfunded activities or interests that are constitutionally protected.

Protecting “Suspect” Classifications

The other major exception to the general rule that

legislation need only be ‘‘rational’ to be constitutional involves legislation that is characterized as

discriminating on the basis of a “suspect’ classification. Under such circumstances, a court may

subject the legislation to the same demanding ‘close

scrutiny ‘ ‘ as it would legislation that “affects” a

“fundamental interest. ” Again, the application of

such a standard is usually tantamount to a determination that the legislation is unconstitutional.

z The Court has in the past applied the “rationality” standard in such a manner as to impose greatex restriction on legislative discretion (U.S.

DeparfmenzofAgn”culfure v. Moreno, 413 U.S. 528 (1973)). However, most experts regard that case to be no Iongerauthoritative, and it was even aberrant

in its own day (see Yeflerson v. Hackney, 406 U.S. 535 (1972)).
Chapter 7--Federal Legal Issues ● 177

The rhetoric and underlying rationale for the

exception of ‘suspect’ classifications evolved from

the judicial invalidation of school and public service

segregation laws and other legislative schemes

based on purposeful racial classifications. In those

contexts, the courts modified traditional notions of

judicial deference to legislative discretion in light of

the history and realities of governmentally sanctioned racial descrimination. This enhanced judicial

review of racial classifications may also be applied

to legislative classifications that discriminate on the

basis of an individual’s national origin or against a

few other “suspect” classes, such as legal aliens.

However, the Supreme Court has been extremely

reluctant to recognize additional categories of suspect” classifications beyond these three categories.

Thus, for example, the Court has rejected attempts to

classify as “suspect’ legislation that discriminates

against the handicapped, the elderly, striking workers, indigent teenagers seeking abortions, and close

relatives. 3 It has also rejected the notion that

gender-specific legislation is constitutionally “suspect, but it has nonetheless applied an intermediate

level of judicial review (somewhat higher than mere

‘‘rationality’ to such legislation.

In general, the Court has insisted that enhanced

judicial scrutiny of legislation is limited to circumstances where the ‘suspect’ (e.g., racial) classification is intentional or, at least, where a discriminatory

intent can be inferred from sufficiently persuasive

statistical evidence. Disparate impact alone, without

some showing of legislative intent, is not constitutionally significant. The Court also has rejected

attempts to characterize limits or conditions on

welfare, Medicaid, or other programs that provide

benefits exclusively to the poor as inherently ‘ ‘suspect’ (see, e.g., Maher v. Roe, 432 U.S. 464 (1977)).

There are a few cases in which the Court has

applied “suspect’ class analysis to legislation that

dis criminates between those who can pay and those

who cannot. But most of those legislative schemes

involved a complete denial of access of indigent

people to some important public service otherwise

available to nonindigent people—specifically, access to judicial process.4

Constitutional Principles

and Oregon’s Proposal

With a very few possible exceptions, Oregon’s

proposed demonstration project to revise its Medicaid program need only be “rational’ to meet

constitutional requirements. This standard could

easily be satisfied by any of the claimed purposes

originally set out in Oregon’s Senate Bill 27 (SB 27).

One aspect of the program, the fact that it would

initially limit the new prioritized scheme of Medicaid coverage to those current Medicaid beneficiaries

who are AFDC-related, while exempting Supplemental Security Income (SSI) beneficiaries, parallels a scheme upheld in Jefferson v. Hackney, which

found that the States and the Federal Government are

free to treat different categories of welfare recipients

differently. It is thus unlikely that a challenge to this

aspect of the Oregon program would be successful.

Even if Oregon opted not to fund services that

somehow involved the exercise of ‘‘fimdamental”

interests, the Supreme Court, in its many abortionrelated decisions, has insistently demonstrated that

not funding an activity has no enhanced constitutional significance. A possible exception would

arise if Oregon implemented its prioritization

scheme in such a way as to impose a ‘‘penalty’ or

unconstitutional condition on receipt of Medicaid

benefits or, alternatively, if it were to discriminate

on the basis of a ‘ ‘suspect" classification. But

nothing on the face of the statute or in the early

stages of its implementation suggests that this is

likely.

While the basic scheme for reforming Oregon’s

Medicaid program appears to be within these

constitutional limits, there are at least two provisions

of the original legislation that may possibly be

vulnerable to constitutional attack. The first of these

provisions, codified in Or. Rev. Stat. § 414.725(7)

(Supp. 1990), requires that:

Health care providers contracting to provide services

under [the Medicaid program statutes revised pursuant to SB 27] shall advise a patient of any service,

treatment, or test that is medically necessary but not

3 For a full discussion of “suspect” classitlcations, see Cleburne, Texas v. Cleburne Living Center, 473 U.S. 432 (1985); see also Lyng v.

International Union, United Automobile, Aerospace and Agricultural Implement Workers, 485 U.S. 360 (1988).

d In Grifin v. Illinois (351 U.S. 12 (1956)), the Court held that requiring indigent defendants to purchase transcripts of their trials (to prepare for an

aPPIZ@ WaS a violation of q~protmtiou ~Boddie V. co~ecficut (Wl U.S. 371 (1971)), the Court invalidated a fding fee required for a petition for

divorce. Tare v. Short (401 U.S. 395 (1971)) invalidated a state law that incarcerated indigent people who could not pay criminal frees; Ll”ttle v. Streuter

(452 U.S. 1 (1981)) invalidated a fee charged for a blood test necessary for a defense to a (criminal) paternity charge.
178 ● Evaluation of the Oregon Medicaid Proposal

covered under the contract if an ordinarily careful

practitioner in the same or similar community would

do so under the same or similar circumstances

[emphasis added].

The second provision, Or. Rev. Stat. § 414.745

(Supp. 1990), protects Medicaid providers from

criminal prosecution, civil liability, and professional

disciplinary action when they refuse to provide

unfunded services.

The scope and meaning of these provisions are,

unfortunately, unclear. Presumably they are intended to apply only to providers participating in the

reformed Medicaid scheme. However, both provisions have been codified in such a way as to imply

that they would continue to apply to Medicaid

providers even if the demonstration project does not

go forward (see box 7-A).

While section 414.725(7) appears to impose a

“duty to advise” and to specify how that duty can

be fulfilled, it is not clear whether and how its

implementation would affect Oregon’s existing

statutory informed consent law. The existing statute,

reflected in Or. Rev. Stat. § 677.097 (1989)),

requires physicians and podiatrists to undertake

certain steps in obtaining informed consent from any

patient prior to performing a procedure (e.g., describing the recommended treatment and any alternative treatments, notifying the patient of possible

risks or outcomes of the procedure, asking the

patient if he or she would like any further information). This statute does not specify that cost or

coverage of the treatment be discussed as possible

factors. In contrast, Or. Rev. Stat. § 414.725(7)

directs all contracting providers (not just physicians

and podiatrists) to inform Medicaid patients when

they intend not to provide a medically necessary

treatment because it is not covered by Medicaid.

Section 414.745, which waives provider liability

for refusing to treat when treatment is unfunded, has

even more far-reaching effects. This waiver would

reduce substantially the common law and State

statutory protections that are currently available to

Medicaid patients in Oregon. Existing common law

principles limit the discretion of a provider to refuse

or terminate treatment in several important ways

(see below). The limits imposed by criminal and

licensure sanctions are less clearly defined, but they

still provide Medicaid beneficiaries with alternative

remedies if treatment is denied or terminated.

Box 7-A—The Legislative Language or the

Code? Potential Implications of the

Codification of Oregon Senate Bill 27

The previsions of Oregon Senate Bill 27 (SB 27)

were codified in various and separate portions of the

Oregon code. Even if some of these provisions are

repealed or modified, others could be retained; and

it is possible that some elements of the proposal

may be regarded as valid while others are not (i.e.,

the manner in which the statute was drafted and

later codified makes it appear “severable”). If the

proposal was not authorized, but the State legislature took no action to repeal the various provisions

of the Oregon code that were added by SB 27, it

would be possible to read some of these provisions

as applicable to the existing Medicaid program.

In addition to the apparent severability of the

provisions of the law, some provisions as codified

do not follow the exact wording of the statute. For

example, the codified versions of both sections

414.725(7) and 414.745 (Or. Rev. Stat., Supp.

1990) are worded slightly differently than the

original provisions in SB 27 (see sections 6(7) and

10 of SB 27). The original language of SB 27 makes

it clear that these provisions would only apply to

those Medicaid recipients who are subject to the

new proposal. Consequently, they would not have

any effect unless or until that proposal was implemented. The Oregon code language, however,

substitutes a reference to the entire Medicaid

program for SB 27’s language “under this Act.”

This change could be interpreted as rendering these

provisions applicable to the existing Medicaid

program, not just the reformed program anticipated

by the Act. This would appear, however, to be in

conflict with the original intent of SB 27.

SOURCE: K. Wing, University of Puget SounG “lhcomq WA

memorandum to E. Power, Office of Technology

Awessmen4 Novexnber 1991.

The net effect of this provision would be to greatly

disadvantage the Medicaid beneficiaries subject to

the waiver, and to do so in a manner that discriminates between indigent Medicaid beneficiaries and

all other Oregonians. (Pending the expansion of the

Oregon proposal to include all Medicaid beneficiaries, section 414.745 would also discriminate

between categories of Medicaid beneficiaries).

Whether the deprivation of common law and

statutory rights of Medicaid beneficiaries in this

manner has any constitutional significance is not

clear. States have wide latitude to amend their
Chapter 7--Federal Legal Issues 179

common law principles of tort liability and, of

course, existing statutory remedies. But viewed in

the broadest sense, sections 414.725(7) and 414.745

in tandem could constitute a discrimination based

exclusively on “wealth”—a discrumination that

would totally deprive Medicaid beneficiaries, who

are by definition indigent as a class, of important

rights that would continue to be available to

nonindigent Oregonians. In some ways, the denial of

an indigent participant’s rights to pursue certain

legal remedies is similar to the few cases in which

the Supreme Court has recognized wealth-based

distinctions as “suspect”—i.e., when it relates to a

denial of access to the courts.5

On the other hand, in a recent Supreme Court

decision relating to the filing fee required for a

bankruptcy petition, the Court indicated that such a

fee does not create a ‘‘suspect classification

(Kadrmas v. Dickinson Public Schools, 487 U.S.

450 (1988)). Some experts read this opinion to have

tacitly signaled that the present Court is really intent

on abandoning the notion of ‘wealth’ as a suspect

class, and confining more rigorous review of discriminations between indigent and nonindigent people to those circumstances where the interest or

rights denied are entitled to enhanced constitutional

protection. Whether the importance of the interest

denied to indigent people by the Oregon proposal—

access to the courts to pursue various remedies—

would be regarded as comparable to a‘ ‘fundamental

right“ is not clear.

It is worth speculating as to what the implications

of closer judicial scrutiny might be if applied to

sections 414.725(7) and 414.745. The State’s interest in encouraging providers to participate in the

Medicaid program could be regarded as compelling.

Medicaid is structured voluntarily, and without the

participation of physicians and other providers, the

underlying objectives of the program fail. On the

other hand, a waiver of all civil and criminal liability

is not necessarily the only means to encourage

participation under the proposed demonstration.

Indeed, it is not the only way to protect providers

from the risks and costs of liability (the State could,

for example, further subsidize the malpractice insurance costs of providers). In any event, there are a

number of ways in which a court could view this

legislation as invasive or overly broad, the touchstones of close scrutiny analysis-all premised on

the possibility that the courts would apply to this

legislation the more rigorous test only applied to

legislation that discriminates on the basis of ‘suspect” classifications.

Oregon Constitutional Issues

Whereas the Federal constitutional interpretations

of the Federal courts (and the Supreme Court) must

be followed by the State courts, the State courts

themselves are the ultimate interpreters of the their

own constitutions. The Oregon Constitution includes a‘ ‘privileges and immunities’ provision that

parallels the Equal Protection Clause of the 14th

Amendment to the U.S. Constitution.6 The Oregon

courts’ analyses of the requirements of this clause

generally track the same “fundamental interest”/

‘‘suspect’ class rhetoric that has been adopted in the

Federal equal protection cases.

Nonetheless, on several occasions the Oregon

courts have also indicated that the application of

those principles may be somewhat broader under the

State constitution. In a school financing case, for

example, the Oregon Supreme Court concluded that

the “privileges and immunities” clause requires a

judicial evaluation of the justification for the discrimination if important interests are involved, even

if these interests are technically not “fundamental”

(under the Federal definition) (Olsen v. State, 276

Or. 9, 554 P.2d 139 (1976)). Similarly, in a more

recent decision, a State court held that the ‘ ‘privileges and immunities” clause required that the

denied interests (in this case, unrestricted access to

abortion) be balanced against the interests of the

State, rather than requiring the State to show only

that the limits imposed by legislation were “rational” (Planned Parenthood Association v. Department of Human Resources, 63 Or. App. 41,663

P.2d 1247, aff'd on other grounds, 297 Or. 562,687

P.2d 785 (1984)).

It is important not to read too much into these

cases. The Oregon courts have only indicated a

willingness to broaden the requirements of nondiscrimination in some circumstances. Even while

drawing some distinction between Federal equal

protection analysis and analysis under the “privi5 See footnote 4.

6 Article I, section20 of the Oregon Constitution states: ‘‘No law shall be passed granting to any citizen or class of citizens privileges, or immunities,

which upon the same terms, shall not equally belong to all citizens. ’
180 . Evaluation of the Oregon Medicaid Proposal

leges and immunities’ clause, these cases also insist

that in most circumstances the “privileges and

immunities clause of the State constitution requires no more than the “rationality” standard

applied in Federal equal protection cases. A somewhat loosened definition of a “fundamental interest” may allow more judicial protection of important interests such as public education or medical

assistance for abortion. To extend that notion to

include more judicial scrutiny of discrimination

involving Medicaid benefits would be a far greater

departure from the Federal equal protection cases

than the decisions in Olsen or Planned Parenthood

have signaled.

The most interesting and, unfortunately, unanswerable question is whether Oregon’s somewhat

broadened application of its “privileges and immunities" clause would result in a loosening of the

definition of ‘suspect’ class or would allow Oregon

courts to more closely examine ‘‘wealth’ discrimination. The Oregon courts have given little specific

guidance as to the application of the ‘‘privileges and

immunities’ clause to limits or conditions on social

welfare programs, and virtually none as to the

application of “suspect” class analysis in this

context. In other situations, the Oregon Supreme

Court has emphasized that “close scrutiny” under

the ‘privileges and immunities’ clause only applies

where there is a definable ‘‘class’ apart from the

classification created by the statute (see State v.

Clark, 291 Or. 231,630 P.2d 810, cert. denied, 454

U.S. 1084 (1982)). Although indigent people are a

definable class, it is not clear whether Oregon would

further insist that only the traditional “suspect”

classes are entitled to a higher level of judicial

review or consider a classification based on

‘‘wealth’ as also entitled to a higher level of judicial

scrutiny.

FEDERAL STATUTORY ISSUES

“Anti-Dumping” and Other Federal Laws

Relating to Health Care Access

Or. Rev. Stat. § 414.745 would modify the

common law protections currently available to

Medicaid beneficiaries. Apart from issues relating to

the discriminatory effects of this provision, and their

constitutional implications, section 414.745 creates

a potential conflict with Federal “anti-dumping”

legislation, as well as with other Federal laws

relating to health care access.

In most jurisdictions, the civil liability of providers for denial or termination of treatment is determined by common law tort principles. Under common law, no private party, even a provider of health

care, has a duty to protect or provide assistance to

any other, unless there is an established relationship

between the parties, or unless some affirmative act

of the one party has created a risk of harm to the

other. Once a duty has been recognized, however,

the common law imposes a duty of reasonable care.

A violation of that standard can result in civil

liability for all resulting damage. Medical malpractice cases are the prototypical examples.

“Abandonment” of an established patient-i. e.,

a unilateral decision by a physician or other provider

to terminate ongoing treatment-also may be regarded as negligence. Although it is not clear from

the case law whether this rule is always absolute, the

courts have rejected the patient’s inability to pay as

anon-negligent reason for terminating ongoing care.

Once a provider-patient relationship has been established, a provider generally must continue treatment

even if a patient is indigent.7

On the other hand, the “no duty” rule is as harsh

as the abandonment principle is generous. In its

strictest application, the true ‘bystander’ can watch

another person die without rendering aid; if there is

no duty to violate, there can be no liability. The ‘no

duty” principle has been cited repeatedly with

approval-although relatively rarely applied-in

cases involving refusal to provide medical care by

both physicians and hospitals (224).

Not surprisingly, the harsh implications of the

“no duty” rule have led many modern courts to

avoid it or to find exceptions to its application,

particularly in the context of hospitals rendering

emergency care. Specifically, courts in many jurisdictions have recognized what could be regarded as

a duty to provide first aid--namely, that a hospital

with the capacity for emergency services has a duty

in medical emergencies to assess potential patients

and to at least provide the treatment necessary to

stabilize the patient (Wilmington General Hospital

v. Manlove, 54 Del. 15, 174 A.2d 135 (1961);

Jackson v. Powers, 743 P.2d 1376 (Alaska 1987);

Thompson v. Sun City Community Hospital, Inc.,

y For a broader discussion, see K. Wing, The L.uw and the Public’s Health, 3d Ed. (St. Louis: C.V. Mosby Co., 1990), pp. 265-271.
Chapter 7--Federal Legal Issues ● 181

141 Ariz. 597,688 P.2d 605 (1984); Mercy Medical

Center v. Winnebago County, 58 Wis. 2d 260, 206

N.W.2d 198 (1973)).

The courts have not been entirely clear or

consistent in defining the limits on this exception to

the general rule (313). To bring some clarity and

uniformity to this situation, Congress passed legislation in 1985 that effectively codified the common

law exception to the ‘‘no duty’ rule and interpreted

its reach rather broadly (Public Law 99-272, as

amended by Public Law 101-239; 42 U.S.C. § 1395dd).

The statute, commonly referred to as the Medicare

‘‘anti-dumping’ law, requires hospitals that participate in Medicare (i.e., virtually all hospitals) to

screen all emergency patients, and to stabilize those

in need of further treatment. It also limits drastically

the discretion of hospitals to discharge or transfer

patients once they are stabilized. And while it is a

subject of much controversy, the Federal statute also

has been interpreted to impose the same requirements on individual physicians who work in emergency rooms (see, e.g., Burditt v. U.S. Department

of Health and Human Services, 934 F.2d 1362 (5th

Cir. 1991)).

In contrast, Or. Rev. Stat. $424.745 allows both

individual and institutional providers of all types to

either refuse to initially accept or to terminate

treatment for Medicaid beneficiaries when the services they need are not financed under the Oregon

Medicaid scheme. In essence, the preexisting common law limits imposed by the law of abandonment,

the no duty exception, and any other potential for

liability based on State law is waived by section

414.745 for those Medicaid beneficiaries subject to

the reform proposal.

The conflict of this provision with existing

common law does not invalidate it; the Oregon

legislature is free to amend or modify the common

law as applied in that jurisdiction. Nor is section

414.745 invalid simply because it conflicts with the

requirements of the Federal ‘‘anti-dumping’ legislation. However, the result would surely be confusing to providers, since the State law might ‘‘lower’

or waive liability under the same circumstances

where the Federal law ‘‘raises’ or specifies higher

standards. Medicaid beneficiaries that have been

denied treatment would be allowed to pursue private

claims based on the Federal law or to request

administrative action based on the Federal law, but

they would be prohibited from doing so under State

law.

A potential for conflict could also arise if Congress itself authorized the Oregon proposal or

exempted the proposal from the requirements of the

Federal Medicaid statute. If congressional intent

were not clarified, a vague or broadly worded

Federal authorization or waiver could be read as also

waiving the application of the Federal anti-dumping

or other relevant legislation. Assuming that it is not

Congress’ intent to do so, any Federal authorization

or waiver legislation should explicitly recognize this

potential conflict and, where desired, specifically

affirm the continuing application of the Federal

legislation to the Oregon Medicaid program even

after it is reformed.

A congressional authorization or waiver should

also clarify the continuing application of other

Federal laws that currently impose restrictions on

providers’ discretion to deny access to or abandon

indigent patients. For example, the ‘‘tiee care’ and

“community service’ mandate of those hospitals

that have received Hill-Burton* funds continue to

impose requirements relating to the treatment of

indigent patients, general admission policies, and

emergency room access. In particular, the community service” provisions require Hill-Burton recipients to accept all Medicaid patients and limit their

discretion to deny patients services in emergencies

(42 CFR § 124.500, § 124.600 (1990)). Section

414.745 cannot waive these requirements.

Similar requirements are imposed on hospitals

that are given Federal nonprofit status. The Federal

revenue rulings interpreting these requirements,

while not models of clarity, clearly intend to limit

the discretion of nonprofit hospitals to deny admission to indigent patients, emergency patients, and, in

particular, Medicaid beneficiaries (242).

It is clear that section 414.745 contrasts markedly

with the requirements of these Federal laws in a

number of important ways. As with the antidumping legislation (and again assuming that Con8 The ‘‘Hill-Burton’ Act (Public Law 79-725) and later amendments established a program that gave construction grants to hospitals between 1946

and 1974, when the program was abolished. Hospitals rezeiving these funds were required to provide a certain amount of free care and to make their

services available to all community residenLs. The free care requirement was time-limited (usually 20 years), but the community service

requirement-which prohibits the denial of emergency care to the indigent-is not.
182 ● Evaluation of the Oregon Medicaid Proposal

gress does not intend to waive these requirements as

part of any authorization of the Oregon Medicaid

proposal), these potential conflicts should be noted

and the continuing application of these other Federal

laws should be explicitly clarified in the event of a

congressional authorization or waiver.

Protection of Human Research Subjects

Federal law provides safeguards to protect human

subjects at risk in research projects and other

activities supported by the U.S. Department of

Health and Human Services (DHHS) (45 CFR 46).

If the Oregon proposal were subject to these

safeguards, it would be required to establish an

Institutional Review Board (IRB) that would have to

independently approve the proposal before it went

forward. Such a requirement would delay implementation until a properly structured IRB had conducted

a review, which could consider such factors as

whether other alternatives would have less impact

on Oregon’s Medicaid population. In the event of

IRB disapproval, the proposal could not be implemented. The primary legal question is whether these

requirements apply to the Oregon Medicaid proposal.

45 CFR Part 46 has both specific and general

statutory authority. The regulations were originally

enacted as a response to a mandate from Congress

(Protection of Human Research Subjects Act, Public

Law 93-348 ).9 Both the original regulations and

their subsequent amendments, however, claim as

their authority the general rulemaking authority of

DHHS. The requirements of Part 46 apply to all

DHHS-supported activities, including those funded

by HCFA (45 CFR § 46.101).

After a 1976 lawsuit, in which a Federal court held

that a Georgia proposal to impose copayments on

Medicaid beneficiaries was “research” and consequently subject to these regulations (Crane v.

Mathews, 417 F. Supp. 532 (N.D. Ga. 1976)), the

regulations were expanded to include as ‘‘research”

any “systematic investigation designed to develop

or contribute to generalizable knowledge. ” The

revised regulations specified that ‘‘some ‘demonstration’ and ‘service’ programs may include research activities” (45 CFR § 46.102(e)). The Oregon proposal is almost certainly ‘‘research” by this

definition.

But while 45 CFR Part 46 has broad scope, it also

provides for specific exemptions for certain kinds of

activities and it reserves for DHHS the discretion to

exempt individual projects from these regulations.

Research projects that DHHS can exempt include:

1<

2.

3.

4.

Programs under the Social Security Act, or

other public benefit or service programs;

Procedures for obtaining benefits or services

under those programs;

Possible changes in or alternatives to those

programs or procedures; and

Possible changes in methods or levels of

payment for benefits or services under those

programs.

On their face, these provisions appear to exempt

from Part 46 the type of “research” or demonstration that is proposed by Oregon. Alternatively, Part

46.101 also reserves for DHHS the discretion to

waive these requirements as they apply to an

individual project. Notably, these provisions were

added in 1983, at least in part as a response to the

implications of the Crane decision (48 F.R. 9,266).

Critics of the Oregon Medicaid proposal have

claimed that the 1983 amendments to Part 46 were

invalid and beyond the statutory authority of DHHS

(220). However, although the underlying rationale

for issuing a regulation maybe subject to some level

of judicial review, the discretion of an agency to

amend or rescind its own regulations is extremely

broad, particularly where the underlying statutory

authority has no specific standards for a reviewing

court to apply. In the introduction to the 1983

amendments to section 46.101, DHHS stated that its

own review process for demonstration projects was

extensive and that it considered IRB review for such

projects, such as Oregon’s Medicaid proposal, to be

duplicative and unnecessary (48 F.R. 9,266).

While this position can be argued as a matter of

public policy, it is unlikely that a reviewing court

would consider it to be an abuse of discretion under

general principles of administrative law, particularly

g The original 45 CFR Part 46, setting forth department-wide policies, was published a few days before the 1974 legislation was passed (39 FR.

18,914). The 1974 legislation required Department of HealtlL EducatioxL and Welfare @-IEW) (later DHHS) to enact regulations protecting subjects

in projects funded by the Public Health Service and to establish a cornmission to make recommendations for department-wide policies. In response to

these mandates, the original regulations were amended subsequently on several occasions (see 46 FR. 8,386; 46 FR. 19,195; 47 FR. 9,208; and 48 FR.

9,269).
Chapter 7-Federal Legal Issues ● 183

since the Oregon proposal has been reviewed

repeatedly by State and Federal officials.

The regulations at section 46.10l(i) do specify

that:

If, following review of proposed research activities that are exempt from these regulations under

paragraph (b)(6), the Secretary determines that a

research or demonstration project presents a danger

to the physical, mental, or emotional well-being of a

participant or subject of the research or demonstration project, then Federal funds may not be expended

for such a project without the written, informed

consent of each participant or subject.

This provision apparently imposes a limited

requirement of review on DHHS even if the Oregon

proposal is exempt from the IRB and other requirements of Part 46. That requirement would presumably be satisfied by the current DHHS review of

Oregon’s proposal. Some advocates have argued,

however, that language in a recent DHHS appropriations bill suggests that, if DHHS does find that some

current Medicaid beneficiaries might be harmed

under the proposal, Oregon could be required to

obtain ‘‘written, informed consent’ of all individuals affected by the new plan (222).

Federal Civil Rights Statutes

Title VI of the Civil Rights Act of 1964

Title VI states:

No person in the United States shall, on the

ground of race, color, or national origin, be excluded

from participation in, be denied the benefits of, or be

subjected to discrimination under any program or

activity receiving Federal financial assistance (42

U.s.c. § 2000d).

All recipients of Federal assistance subject to

Title VI are required to execute an assurance of

compliance with its requirements as a condition of

receipt of Federal funds.

Title VI clearly applies to State Medicaid programs and Medicaid providers (42 U.S.C. § 2000d4a, 45 CFR § 80.2 and App. A). As such, it prohibits

intentional discrimination within a Medicaid program, including circumstances where an underlying

intent may be inferred from circumstantial evidence.

In this regard, Title VI can be viewed as an

enforcement mechanism for the constitutional prohibition of discrimination based on race and other

‘‘suspect’ classifications. Although there is nothing

in the language or legislative history of the Oregon

proposal that could be regarded as intentional

discrimination, there is the possibility that such a

problem would arise in the implementation of the

Oregon scheme. Thus, Title VI would impose a

continuing obligation on Oregon to avoid overt

dis crimination in the implementation of its Medicaid

proposal.

In addition to intentional discrimination, the

DHHS regulations that interpret the statutory language of Title VI also prohibit some forms of de

facto, or “disparate-impact,” dis crimination. The

language of the regulations prohibits practices and

criteria that have a disproportionate effect based on

race, color, or national origin, even if this effect is

not linked to a discriminatory intent.

The validity and specific meaning of these regulations are not entirely clear. The U.S. Supreme Court

on at least one occasion has referred to the language

of these regulations in a manner that implies that

they are valid (see Lau v. Nichols, 414 U.S. 563

(1973)). More recent pronouncements of the Court

have been more equivocal (Guardians Association

v. Civil Service Commission, 463 U.S. 582 (1983);

Alexander v. Choate, 469 U.S. 287 (1985)).

Even assuming that these regulations are valid, it

is not clear from the language of the regulations (or

from the Court’s references to them) what sort of

justifications would be accepted in defense of a

“criteria” or “method of administration’ that did

result in a disproportionate effect based on race,

color, or national origin. There are several possibilities. Any practice or policy that is regarded as

intentional discrimination is almost certain to be

treated as illegal. Alternatively, a court could regard

a finding of disproportionate impact as establishing

a prima facie case and then focus on the underlying

justifications for that impact.10 As a third alternative,

the courts could apply the limited standard of

‘‘rationality’ to circumstances involving disproportionate impact or effect, requiring little more than

some colorable justification for the practice or

activity that results in the disproportionate impact.

10 ~sis tie Wproach taken in employment discrimina tion cases under Title VII of the Civil Rights Act of 1%4 (42 U.S.C. $ 2000e et seq. (Supp.

1991)). Under Title VII, where an employee shows that an employer’s practices result in a disproportionate impact on a protected group, the employer

has the burden of showing that there is a legitimate business reason to justify the practice and its effect.
184 . Evaluation of the Oregon Medicaid Proposal

Unfortunately, since so few Title VI cases have

been fully litigated and have applied these regulations, there is little guidance on this crucial issue.11

In Bryan v. Koch (627 F.2d 612 (2d Cir. 1980)), the

Federal court of appeals analyzed New York City’s

decision to close a public hospital under the requirements of Title VI. The court found a prima facie case

of disparate impact on racial minorities, but the court

held that the city need only show that the decision

was rationally related to a legitimate objective

(essentially applying the constitutional standard

applicable in most equal protection cases).

In NAACP v. Medical Center, Inc. (657 F.2d 1322

(3d Cir. 1981)), a case involving the decision of an

inner-city hospital to build a new facility in a

suburban location, the lower court found a disproportionate racial impact but concluded that the

defendant hospital had legitimate interests in relocation and that there were no other alternatives that

would have less discriminatory impact. The court of

appeals held that the lower court’s review ‘‘more

than adequately serve[d]” the requirements of Title

VI, and strongly implied that a level of review

comparable to that taken in Bryan would have been

acceptable.12

The interpretation that will be given to these

regulations is crucial in defining the implications of

Title VI for the Oregon Medicaid proposal. If future

courts adopted the limited view of Title VI requirements reflected in the decisions discussed above, the

implications of Title VI would be minimal. Even if

the Oregon reforms had a disproportionate impact on

the minority groups protected by Title VI—an

outcome that is at least possible under several

different scenarios13--Oregon could still offer as

justification any of the underlying objectives of its

current proposal, not the least of which is (long-run)

savings of State and Federal funds. If the judicial

inquiry in Title VI cases where there is a finding of

disproportionate impact requires no more than the

‘‘rationality’ standard generally applied under constitutional analysis, then it is very unlikely that any

court would invalidate all or any part of the Oregon

Medicaid reforms--even if it finds that the proposal

would have a disproportionate result.

Title VI would have greater meaning in this

context only if a court were inclined to inquire

further (e.g., to consider the availability of other

cost-saving or reform measures that would have a

lesser impact on racial or other minorities). Thus far,

however, the courts have not been inclined to do so.

As a practical matter, therefore, Title VI may impose

limits on the reamer in which Oregon implements

its proposals only in those circumstances where

there is disproportionate result and that result can be

linked to an underlying intent to discriminate.

As one final qualification of the implications of

Title VI in this context, it should be noted that Title

VI is structured in such a way as to rely heavily on

administrative enforcement by Federal funding agencies. Individual plaintiffs have been allowed to

pursue lawsuits challenging the failure of DHHS or

other agencies to enforce their own regulations, and

in a few cases, seeking independent judicial determination of compliance with Title VI where the agency

has failed to do so. On the other hand, some current

members of the Supreme Court read Title VI more

narrowly and may be prepared to restrict or even

prohibit privately initiated enforcement actions (see

Guardians Association v. Civil Service Commission,

463 U.S. 582 (1983)). Thus the practical implications of Title VI for the Oregon proposal may be

determined in large part by DHHS’s willingness to

apply and enforce these requirements.

The Rehabilitation Act of 1974 and the

Americans With Disabilities Act of 1990

29 U.S.C. § 794 (1991 Supp.), codifying the

original section 504 of the Rehabilitation Act of

1973, provides:

No otherwise qualified handicapped individual

. . . shall, solely by reason of his handicap, be

excluded from the participation in, be denied the

benefits of, or be subjected to discrimination under

any program or activity receiving Federal financial

assistance. . . .

II Ti~e w ismw ~ve ~sen and been Utigated extensively in school desegregation cases. These cases, however, have fitt.le utility in clef@ the

meaning of Title VI in other contexts.

12 me NAACP ~W also pointed Out that in.leflerson v. Hackney, discussed above, the Supreme Court (in a footnote) had rejected a Title VI claim

that paralleled the equal protection claim that was the central focus of that decision. While J@erson did not consider the validity of the Title VI

regulations, the factual similarities between the scheme reviewed and upheld in J@erson and the Ckgon Medicaid proposal cannot be overlooked.

13 For emp]e, tie pfiori~tion of servims covered under the new scheme could result in a distribution of benefits t.bt has a disproportionate impact

or effect on protected groups. Although OTA’s analysis of the list indicatex that a disprop tionate impact is not likely to occur with the line drawn at

587, fiture upward movement of the line could increase the potential for such a result.
Chapter 7-Federal Legal Issues . 185

The requirements of section 504 clearly apply to

both private and public recipients of Medicaid funds

and would therefore apply to Oregon in the implementation of the Medicaid reforms it has proposed.14

The DHHS regulations interpreting the scope and

meaning of section 504 track closely those of Title

VI (see 45 CFR 84.4). The language of these

regulations appears to prohibit both intentional or

overt discrimination against the handicapped, and

acts or practices that have a disparate impact on the

handicapped. As with Title VI, the courts have

interpreted the requirements of section 504 somewhat more narrowly than these regulations may

suggest.

In Alexander v. Choate (469 U.S. 287 (1985)), the

Supreme Court considered both section 504 and its

interpretative regulations and attempted to outline

the types of activities that would be regarded as

discrimination for purposes of section 504. Choate

involved an attempt by the Tennessee legislature to

reduce the costs of the Medicaid program by setting

a maximum limit of 14 days of Medicaid coverage

for inpatient hospitalization. The plaintiffs in

Choate argued that since handicapped Medicaid

beneficiaries have greater needs for hospitalization,

the result would disproportionately affect the handicapped and therefore violate section 504.

In its decision, the Court held that while Title VI

and section 504 are similar in many regards, the two

mandates may be interpreted and applied in different

ways. According to Justice Thurgood Marshall, the

underlying purpose of section 504, unlike that of

Title VI, is to prohibit discrimination that derives

from “indifference,” “neglect,” or ‘ ‘apathetic attitudes” rather than “invidious animus’ (469 U.S. at

295-96). On the other hand, Marshall argued, the

concerns of ‘disparate impact resulting from these

sources must be balanced by ‘‘the need to keep

section 504 within manageable bounds’ and avoid

unduly burdensome “Handicapped Impact Statements” (469 U.S. at 299).

Thus, according to the Choate decision, section

504 does apply to some circumstances of disparate

impact discrimination. However, the prohibition of

disparate impact discrimination requires a ‘ ‘balancing’ ‘ test under which “reasonable” efforts to

modify a program or accommodate the handicapped

may be required, but substantial or ‘fundamental’

modifications will not.

Choate upheld the Tennessee Medicaid limit

primarily because it did not overtly distinguish

between handicapped and nonhandicapped beneficiaries; both categories have ‘‘meaningful’ access to

the same benefits, notwithstanding the acknowledged fact that handicapped beneficiaries are in

greater need of those benefits. In this regard, Choate

has been widely read as largely eviscerating the

application of section 504 to disparate impact

discrimination. The Choate opinion, however, does

allow that some forms of disparate impact discrimination would not satisfy the ‘‘balancing’ test of

section 504. For example, the Court notes that “the

benefit itself cannot be defined in a way that

effectively denies otherwise qualified handicapped

individuals meaningful access . . . .’ It also argues

that “criteria that have an exclusionary effect”

cannot be employed in determiningg limitations on

benefits.

Under Choate, it is clear that Oregon can limit or

restrict covered services in a facially neutral manner,

even if the result disadvantages groups that qualify

as handicapped under section 504. However, in

implementing the proposal, particularly the proposed prioritization of covered services, it is conceivable that services would be defined or categorized in such a way that services might be covered

for the nonhandicapped but comparable services

would not be covered for the handicapped. If this

were done explicitly, it could be regarded as

intentional discrimination and a violation of section

504 per se. Even if it were not, it may be regarded as

the kind of disparate impact discrimination described in Choate and a court would have to apply

the “balancing” test described in Choate and other

decisions. Ultimately the determinative issues would

be much like those in Title VI cases: what sorts of

justifications would be considered “reasonable”

and what level of judicial review would be required

under the “balancing test. ’ It is simply not possible

under current law to anticipate how future courts

would answer these questions.

The passage of the Americans With Disabilities

Act in 1990 (Public Law 101-336) presents another

potential avenue by which the Oregon proposal

14 Smtion 5W r~ments Me e~om~le tiou@ administrative action or through privately initiated lawsuits (subject to the -I~fions

discussed above).

328-308 0 - 92 - 7
186 . Evaluation of the Oregon Medicaid Proposal

might be challenged. The focus of this law, as

confined by its legislative history, is on access of

persons with disabilities to transportation, employment, and places of business. Nonetheless, one

passage of the act could be construed to place a

broader interpretation on its reach. The passage

states that:

[N]o qualified individual with a disability shall, by

reason of such disability, be excluded from participation in or be denied the benefits of the services,

programs, or activities of a public entity or be

subjected to discrimination by any such entity

(Public Law 101-336, Section 202).

For the purpose of this act, a‘ ‘public entity’ is a

State or local government, an agency or special

district of such a government, and certain transportation authorities. The intent of this definition is

apparently to ensure that disabled persons are not

treated inconsistently or inequitably by government

entities simply because some receive Federal funding (and are thus subject to the strictures of the

Rehabilitation Act) while others do not (268)).

The focus of this legislation and its legislative

history appear to imply that it places no additional

burden on the discretion of a State Medicaid

program beyond those already in place as a result of

the Rehabilitation Act. However, at least one legal

advocate has suggested that the Disabilities Act does

indeed place additional requirements on Medicaid

programs. In particular, this advocate argues that the

use of the public survey to assign values to health

states gives inadequate weight to the opinions of

persons with disabilities and therefore biases the

ranking process against services for disabled persons

(150).

Any assumption regarding how Oregon’s proposal would fare under a Disabilities Act challenge

is necessarily speculative, since there is no case law.

(The act, although passed in 1990, did not take effect

until January 26, 1992.) Ironically, OTA analyses of

the list showed that the weights from the public

survey had relatively little effect on the final

rankings on the list (see ch. 3). Furthermore, where

survey responses differed according to the health

experiences of the respondent, the result in at least

a few cases could be to increase the relative weight

assigned to a given treatment that would reduce the

disability. However, because the Oregon Health

Services Commission has not made its ranking

process explicit and because it is possible that in

future revisions of the list public survey information

could be more determinate, the Oregon plan might

still be vulnerable to challenge under the act.

The Child Abuse Prevention and

Treatment and Adoption Act

One issue that could well generate legal controversy for the Oregon proposal as it is implemented—

and also one that cannot be addressed definitively—

involves the discriminatory treatment of newborn

infants with severe handicaps, the focus of the

‘‘Baby Doe” debates. In the early 1980s, in response

to reports that hospitals were allowing parents to

refuse treatment for certain categories of handicapped newborns, DHHS attempted to promulgate

additional regulations under the authority of section

504 (see 49 F.R. 1,627). Among other provisions,

these regulations would have required States to use

their child abuse authority to prevent “medical

neglect of handicapped infants. ’

The application of these regulations to circumstances where parents have asked for treatment to be

terminated, as well as some of the procedural

requirements of these regulations, was eventually

invalidated by the Supreme Court (Bowen v. American Hospital Association, 476 U.S. 610 (1986)).

However, while the result of the Bowen decision was

the invalidation of these particular regulations, the

decision validated application of section 504 to

circumstances where State policy overtly discriminates against treatment of certain categories of

handicapped infants.

Again, it is unclear what section 504 requires or

allows in this setting, but the Bowen case clearly

indicates that it will be applied. Furthermore, in this

context section 504 may be applied both to the State

in its decisions to prioritize covered services and to

providers such as hospitals. Section 504 thus represents another potential conflict between the requirements of Federal law and the immunity from State

law created by section 414.745 of the Oregon statute,

as discussed above.

As part of the political fallout from the “Baby

Doe” debate, in 1984 Congress amended the Federal Child Abuse Prevention and Treatment and

Adoption legislation (42 U.S.C. § 1501 et seq.

(Supp. 1991)). Those amendments give DHHS

additional and alternative authority for regulating

discrimination against handicapped newborns. Among

other things, they explicitly define the withholding
Chapter 7--Federal Legal Issues ● 187

of medically indicated treatment and nutrition from

handicapped infants as a type of child abuse. The

amendments also require each State, as a condition

on the receipt of Federal funds under the original

statutory scheme, to enforce State laws prohibiting

child abuse in such circumstances. The implementing regulations, issued in 1985, prohibit the withholding of “medically indicated treatment” in the

face of a ‘‘life threatening condition,” except under

narrowly defined circumstances (see 45 CFR § 1340

(1990)). Thus, assuming that Oregon is a recipient of

funds under this program, this statutory scheme may

also impose restrictions on Oregon’s discretion to

overtly discriminate against certain categories of

beneficiaries, as well as limit the discretion of

providers to terminate or refuse treatment despite the

statutory immunity of section 414.745.

The Age Discrimination Act of 1975

The Age Discrimination Act of 1975 (ADA),

codified in 42 U.S.C. §§ 6101-6107 (Supp. 1991),

generally prohibits discrimination on the basis of

age in programs or activities receiving Federal

financial assistance, paralleling the prohibitions of

Title VI and section 504. Although the specific

language used in the statute and regulations relates

to all distinctions based on age, the legislative

history of the ADA indicates that the primary

concern of the legislation was discrimination against

the elderly (241).

The ADA legislation differs from other civil

rights statutes in several ways. First, it is not clear

whether the requirements can be enforced through

privately initiated lawsuits; some lower courts have

read the statute as providing only for administrative

enforcement (see Rannelsv.Hargrove,731 F. Supp.

1214 (E.D. Pa. 1990); Mittelstaedt v. Board of

Trustees of University of Arkansas, 487 F. Supp. 960

(D.C. Ark. 1980)).

Second, while the ADA clearly applies to States

receiving Federal Medicaid funds, it also specifically exempts overt age distinction that is authorized

by Federal or State statute. 15 It does not appear,

however, to exempt age distinctions that result from

the administration or implementation of the program

at the State level. Thus, in the implementation of the

Oregon proposal, if an age distinction is made by an

administrative policy or body—the obvious example is an age distinction drawn by the Oregon Health

Services Commission that prioritizes a covered

service separately for two different age groups under

the scheme-that distinction would not be exempt

from the ADA under this particular provision.

There remains the question of whether age

distinctions authorized by an administrative body

fall under any other exceptions allowed by the ADA

statute. Section 610 of the statute exempts

‘‘actions [that] reasonably take into account age as

a factor necessary to the normal operation or the

achievement of any statutory objective of such

program or activity.” The DHHS regulations interpreting the ADA specify that, to be exempted,

actions must meet four criteria:

1.

2.

3.

4.

It

Age is used as a measure or approximation of

one or more other characteristics;

The other characteristic(s) must be measured

or approximated in order for the normal

operation of the program or activity to continue, or to achieve any statutory objective of

the program or activity;

The other characteristic(s) can be reasonably

measured or approximated by the use of age;

and

The other characteristic is impractical to measure directly on an individual basis (45 CFR §§

91.12, 91.13).

is difficult to determine the implications of

section 6103(b)(l)(A) for the Oregon Medicaid

proposal with any certainty. The argument can be

made that a prioritization of services that uses age as

a criteria is an attempt to assess the value of the

service to the individual denied that service; that age

is a ‘‘reasonable measure’ of that value because it

approximates life expectancy or social value; and

that it is impractical to measure these characteristics

in a more direct or individualized manner. It could

also be argued that the Oregon scheme has been

specifically authorized by State legislation to make

these “value” determinations (and may be authorized to do so under a Federal statutory waiver as

well).

On the other hand, the language of both the ADA

statute and the DHHS regulations premises the

exception on a finding that the age distinction is

‘‘necessary’ to the normal operation of the program

15 me DHH,S re@atiom read this exemption to apply to laws adopted by a general legislative body, including Iocal governments (4S ~$

91.3(b)(l)).
188 . Evaluation of the Oregon Medicaid Proposal

or to the achievement of a programmatic objective .

Drawing age distinctions is one way to prioritize

Medicaid benefits, but it is not “necessary” in the

stricter sense of the term. The assertion that age is a

‘‘reasonable’ measure of life expectancy or of

social value can also be challenged.

Unfortunately, there has been virtually no prior

application of these regulations-or the ADA statute--

in this sort of context, either judicial or administrative. The only clear principle is that the ADA allows

for overt age distinctions only if they fall under the

‘‘statute’ exceptions of sections 6103(b)(2) or

under § 6103(b)(l)(A).

The extent to which the ADA prohibits de facto,

or disparate impact, discrimination is likewise

unclear. Section 6103(b)(l)(B) of the ADA does

allow for actions or policies that draw distinctions

based on “reasonable factors” other than age; and

the DHHS regulations interpret “reasonable” to

mean factors that have a “direct or substantial”

relationship to the same factors that can justify age

distinctions under the exceptions of sections 6lO3(b)(l)(A):

the normal operations of the program or the program’s statutory objectives (45 CFR §§ 91.11,

91.14). The statutory term “reasonable” and the

“direct and substantial” language of the regulations, however, would require some judicial or

administrative review of a policy or practice that

results in de facto discrimin ation--certainly more

than the “rationality” standard applied in other

contexts.16

Nonetheless, the discretion allowed in the implementation or administration of the proposed scheme

should be quite broad. Indeed, read broadly, the

exception of section 6103(b)(l)(B) nearly swallows

the general rule. If Oregon were to adopt a policy or

practice that would have the effect of creating an age

distinction-a good example might be the exclusion

from Medicaid coverage of a service that is more

often provided to the elderly than younger program

participants-Oregon would only have to show that

the prioritization of the service was part of the

‘‘normal operation’ of the program, or was consistent with the statutory objectives of the scheme. In

most circumstances, it would probably be able to do

so.

SUMMARY OF CONCLUSIONS

With one possible exception, Oregon’s Medicaid

proposal appears not to conflict with the Federal

Constitution. The exception concerns provisions of

the proposal that might permit a separate standard of

care, and a different level of legal protection against

substandard care, for Medicaid beneficiaries than for

other State residents. This differential could be

interpreted as a violation of the equal protection

clause of the 14th Amendment. These provisions are

also vulnerable to a State constitutional challenge

under comparable provisions of the Oregon Constitution.

The provision in SB 27 that exempts providers

from liability for not providing care to Medicaid

beneficiaries when that care is not covered by the

program is valid on its face; the State can pass

legislation that overrides existing common law

principles. However, this provision conflicts with

existing Federal statutes that require most hospitals

to provide basic emergency care to all patients.

Thus, it is possible that hospitals could be prosecuted under Federal statute for not providing some

services even if they were exempted under State law.

Federal law requires certain protections for human

research subjects (e.g., IRB review of research

proposals), but it also provides certain exceptions for

public benefit programs. The Oregon proposal

appears to fall within these exceptions, although

some critics have claimed that language in a 1992

DHHS appropriations bill indicates otherwise.

Federal statutes prohibiting recipients of Federal

funds from discrimination on the basis of race,

handicap, or age clearly apply to the Oregon

proposal. Implementing regulations further prohibit

certain kinds of ‘disparate-impact’ discrimination.

The Oregon proposal is on its face not vulnerable to

a challenge on this basis, although it is possible that

in its implementation the proposal could violate

either of these Federal statutes or their interpretive

regulations. It is probably also not very vulnerable to

16 It ~- from tie Fede~ re~tio~ that DHHS would regard any age distinction-whether overt or de~acto-invalid unless that distinction

is a result of a policy or practice that is qwcifically excepted from the ADA by the statutory language of section 6103(b). Under this reading of the ADA

the scope of the justification inquiry is framed exclusively by the exceptions outlined in the statute, regardless of whether the distinction is intentional

or eve% or whether it is merely a disparate effect or result. Although this appears to be a reasonable and consistent inteqmtation of the ADA, there W

been virtually no judicial examination of the scope and meaning of the ADA in this context. Thus, his impossible to predict deftitively how the statute

would be interpreted should this reading ever be contested.
Chapter 7--Federal Legal Issues ● 189

challenge on the basis of handicapped or age

dis crimination, unless in its implementation the

denial of benefits can be shown to fall disproportionately on protected groups (e.g., because the services

they use tend to appear below the cutoff point on the

prioritized list). Based on OTA’s analysis of the list,

it appears unlikely that this would happen at the

current benefit threshold; however, the potential for

such a challenge could increase if the line moved up.

The proposal could conceivably be vulnerable to

challenge on the basis of certain provisions of the

American with Disabilities Act, but lack of legal

precedents for such a challenge makes it difficult to

predict how future courts would react.

If Congress should decide to grant the waiver

statutorily, it could explicitly exempt the program

from other existing applicable statutes (e.g., the

discrimination laws). However, ambiguous wording

in such a statutory waiver could lead to questions of

congressional intent regarding the applicability of

the other statutes to the program. Thus, ambiguous

legislative wording could actually create rather than

resolve future judicial controversy.
Chapter 8

Evaluation Issues
Contents

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

OREGON’S PROPOSAL AS A HEALTH SERVICES RESEARCH PROJECT . . . . . . 193

Selection of Adequate Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194

Statistical Power To Detect Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

Difficulty Ensuring That the Intervention Is Applied Consistently . . . . . . . . . . . . . . . . . 196

THE PROPOSAL AS A BROADER POLITICAL EXPERIMENT . . . . . . . . . . . . . . . . . . 197

Box

Box Page

8-A. Attributing Causality in Program Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Chapter 8

Evaluation Issues

INTRODUCTION

Different observers can, and do, see Oregon’s

demonstration proposal in very different research

contexts. The most obvious context is as a straightforward health services research experiment. Indeed,

Oregon’s justification for requesting Federal funding for its proposed new Medicaid demonstration

program is that the program would provide useful

information to the Federal Government. This knowledge would presumably be used to improve other

State Medicaid programs and inform Federal health

policy decisionmaking.

Because different States operate with very different Medicaid systems, the usefulness of Oregon’s

proposal in this context depends at least in part on

the ability to dissociate the different components of

the demonstration and assess their separate effects.

For example, States may wish to implement Oregon’s prioritized list as a Medicaid benefit package

without necessarily implementing the other components that Oregon proposes to demonstrate (e.g.,

eligibility expansion, managed care implementation). This chapter discusses some of the basic issues

likely to arise in evaluating the demonstration on

this level.

In addition, however, Oregon’s proposal is seen as

a potential experiment of two very different questions. First, the proposal can be viewed as a simple

experiment designed to answer the question: Is it

possible, using the combination of mechanisms

Oregon would implement, to provide acceptable

health care coverage to the uninsured poor population without significantly raising costs to the taxpayer and to the health care system? A second

question is even further from the traditional bounds

of health services research: Is health care coverage

based on prioritization of health care services, with

public input, politically sustainable? These two

questions are addressed briefly in the final section of

this chapter.

OREGON’S PROPOSAL

AS A HEALTH SERVICES

RESEARCH PROJECT

Conceptually, the proposed demonstration is an

experiment in which two separate populations (the

uninsured poor and the Medicaid-eligible population) undergo a number of different, simultaneously

administered interventions.

For the uninsured poor population, these interventions are relatively simple: they consist of a package

of covered services and a new delivery system (i.e.,

managed rather than ad hoc charity care). The

theoretical questions to be answered for this target

group are:

1.

2.

Does the existence of health insurance coverage (specifically, coverage for services in

condition-treatment (CT) pairs 1 through 587),

delivered through a managed care system (as

Oregon has designed it), increase health access

to the uninsured poor? Does it improve health

status and satisfaction with care?

If it does, at what cost (or savings) to the State,

providers, employers, the new beneficiaries,

and other groups of interest?

For the population currently eligible for Medicaid, the hypotheses being tested are more complex.

This population would undergo a number of changes,

including changes in benefits, eligibility, and source

and type of care. Although the outcomes of interest

still revolve around health care access and cost, the

questions are more specific and more complex

because they involve comparisons with an existing

program. They would include, for example:

1. Does simplifying eligibility rules increase

program participation? Who gains and who

loses—and how much—through changes in

income calculation, elimination of retroactive

coverage, and change in the minimum length

of eligibility?

–193-
194 . Evaluation of the Oregon Medicaid Proposal

2.

3.

Do the changes in benefits lead to overall

changes in access to services, health status,

and satisfaction with care? Do they affect

different subgroups of the population differently (i.e., are there ‘‘winners’ and ‘losers’ ‘)?

Do they affect program costs?

Does the expansion to statewide managed care

affect health access and satisfaction, and is the

effect uniform across the population? Does it

affect program costs?

Because provider participation is (presumably) critical to health care access, the third set of questions

encompasses others: for example, does changing the

method of payment affect participation?

From the Federal perspective, it would be important to consider the different components of the

experiment separately in the evaluation. Although it

is certainly possible that other States (or the Federal

Government) would want to duplicate the entire

package, it is much more likely that they would

choose to adopt only a few components. For

instance, another State might consider implementing the prioritized list and simplified eligibility rules

for only the existing Medicaid population. To gain

information from the Oregon experiment that would

be useful to a State entertaining such an option, the

two populations affected and the various interventions applied would all need to be evaluated

separately, and the outcomes measured would need

to be appropriately linked with the intervention(s)

that caused them.

Identifying causal effects-i. e., the link between

intervention and outcome and the direction of that

link-is the crux of any type of applied research.

Determining that the intervention being studied

caused a particular outcome is especially difficult in

social science research, where the intervention is

often hard to apply reliably and many environmental

factors that may affect the outcome are out of the

control of the researchers.

The ability to draw conclusions about cause is

enhanced by incorporating evaluation considerations into the design of an experiment and specifying

clearly the hypotheses and outcomes of interest

before the experiment takes place (129). Oregon’s

waiver application makes clear that it considers

evaluation of the demonstration to be the responsibility of the Health Care Financing Administration

(HCFA), not the State. However, it does present a

starting evaluation plan, including some possible

hypotheses to be tested, data sources, and some

suggested methods of analysis using these data

sources.

Even with impeccable theory and planning, however, determining causal connections in Oregon’s

proposed demonstration, as with any research project, might be difficult. Campbell and Stanley (1963)

and Cook and Campbell (1979) have described a

framework for identifying the research problems

that make drawing conclusions about the effects of

an intervention difficult (box 8-A). Three problems

are especially relevant to the proposed demonstration and deserve mention here.

Selection of Adequate Controls

To help rule out threats to statistical validity (see

box 8-A), experiments often randomize the test

population to intervention and nonintervention (“control”) groups. Where randomization is not attempted, as in Oregon’s proposed demonstration

program, the control population may be historical

(i.e., the test population before the intervention was

applied) or matched (e.g., another State’s Medicaid

population). Oregon’s outlined evaluation plan suggests that both types of controls be used.

Some historical (predemonstration) utilization

data exist for hospital inpatient services and for other

services provided outside of the existing managed

care area. Also, new and existing program participants could be surveyed regarding their health status

and satisfaction at the onset of the demonstration.

Both types of historical baseline data are useful,

but both also have strong limitations. For example,

few data on utilization of capitated services (including physician, laboratory, and x-ray services) exist

for beneficiaries enrolled in the current prepaid

program. Prepaid plan enrollment is presently mandatory for all persons eligible for Medicaid through

Aid to Families with Dependent Children (AFDC)

who live in a nine-county area that encompasses

most of Oregon’s urban areas (and appro ximately 54

percent of Oregon’s AFDC beneficiaries (see ch. 4).

Thus, many of the utilization comparisons possible

under the demonstration would be restricted either to

certain areas (e.g., fee-for-service (FFS) counties),

specific services (e.g., hospital inpatient services), or

groups of beneficiaries not currently enrolled in

prepaid plans (e.g., poverty level medical women

and children).
Chapter 8--Evaluation Issues ● 195

Box 8-A—Attributing Causality in Program Evaluation

Most research has underlying it one basic goal: to test whether the intervention (e.g., a new drug, a new school

curriculum, a change in Medicaid rules) causes one or more outcomes. In laboratory and some clinical research, the

outcome desired can be clearly specified and measured, and outside influences that might affect that outcome can

be rigidly controlled for. In these cases, the researcher’s control over external factors raises the likelihood that the

researcher can conclude with confidence that the outcome (if it occurs) was caused by the intervention. In other kinds

of research, however, including most social science research, the researcher has much less control over the outside

factors that might act upon the population of interest. In such cases, the conclusion that the intervention caused a

given outcome is strengthened by eliminating various “threats” to its validity.

Threats to validity can be separated into four categories:

● Statistical conclusion validity--Are the intervention and the outcome related on the basis of statistical

evidence? For example, does the study have enough statistical power (e.g., a large enough sample size) to

detect an effect of the intervention? Are the outcome measures reliable (e.g., if the outcome is a score on

a test, is the test itself statistically reliable)? Is the intervention applied uniformly across the population, and

if not, can the population heterogeneity be itself measured and analyzed?

● Internal validity--Given that an intervention and outcome are statistically linked, how plausible is it that

the intervention (and not some outside factor) actually caused the outcome? Threats to internal validity

include biased selection (e.g., a difference between test and nontest populations was detected because the

test population was predisposed to that difference); diffusion or imitation of the intervention into the control

(nontest) group; and ambiguity about the direction of causality (did A cause B, or did B cause A).

● Construct validity--Do the measurements representing the intervention and the outcome really stand for the

“constructs” they are intended to, or might they accommodate other concepts as well? For example, if a

person improves after being given a pill by a physician, is it the the pill’s therapeutic effect being

measured--or is it some combination of the pill’s chemical effect, the physician’s helpful concern, and the

patient’s belief that the pill will be effective? (Such concerns led to the widespread use of “placebo” controls

in drug research.) Having several different measures (e.g., length and number of physician visits, waiting

time to visits) to represent the “construct” (e.g., access to health care) can reduce threats to construct

validity. If the intervention being tested includes many components, which must be separately measured,

threats to construct validity maybe more difficult to rule out.

● External validity--Can the results of the experiment be inferred to apply outside of the test population? If

the setting and the intervention interact, for example (e.g., instilling discipline in boot camp), the

intervention may not have the same effect in another setting (e.g., a preschool). Similarly, if the population

selected for the experiment differs substantially from the nonexperimental population, the experimental

conclusions may not be valid when applied to the broader population.

SOURCES: D. Campbell and J. Stanley, Experimental and Quasi-Experimental Designsfor Research (Chicago, IL: Rand McNaIly, 1966) and

T. Cook and D. CampbeL Quasi-Experimentation: Design and Analysis Issues for Field Sem”ngs (Bost~ MA: Houghton M.if@

co., 1979).

These historical utilization data, even where soon have coverage and would not have to pay

available, would apply only to existing Medicaid out-of-pocket.

beneficiaries. Surveys of incoming program participants would be the only mechanism by which to

estimate baseline utilization and health status of

newly eligible persons. However, such surveys

would be expensive to conduct and would have to be

implemented very rapidly if the waiver is approved,

limiting the sample size of the data and raising the

chances that the survey would not be adequately

tested before being applied. Also, a survey at the

time of enrollment might overestimate the health

problems of this population, since many individuals

might postpone seeking care if they know they will

Using comparison groups outside the demonstration population as the controls eliminates some

problems inherent in the historical controls (e.g.,

sample size), but this strategy also has limitations.

Using data from other State Medicaid programs, for

example, introduces confounding factors due to

differences in State- and program-specific characteristics (e.g., coverage limitations, general availability

of health resources). Similarly, using as the population control another group within Oregon (e.g.,

persons eligible for the program who did not enroll)

introduces confounding factors related to the charac-
196 ● Evaluation of the Oregon Medicaid Proposal

teristics of that population and the lack of a

systematic method for obtaining utilization and

other relevant data from individuals within it.

Statistical Power To Detect Effects

Even when an effect occurs, a test population may

not always be large enough to detect it within the

traditional limits of statistical confidence. Small

predicted effects require large sample sizes to detect

their occurrence. This problem would place limits on

some of the outcomes that an evaluation of a

demonstration such as Oregon’s could expect to

identify. Changes in population mortality that might

result from changes in covered services, for example, are unlikely to be detectable in a population of

a few hundred thousand persons over a 5-year

period. Some more specific health outcomes that one

might wish to detect are also unlikely to surface; for

example, the measurable benefits of many preventive services are not apparent for many years after

the service is used.

Low power to detect effects is especially likely to

limit the ability of evaluators to determine that

specific intervention components caused particular

outcomes (e.g., that implementing the prioritized list

reduced costs). Separating the effect of the new

benefit package from the effect of prepaid managed

care, for example, requires either detailed data from

the prepaid sector before the new benefits take place

or comparative data during the demonstration between prepaid and FFS managed care. In both cases,

data would be limited. As noted above, only a few

baseline utilization data are available for current

prepaid plan enrollees. Although the State has

recently begun requiring such data from prepaid

plans, there would be less than 1 year’s worth if the

demonstration were to begin in mid-1992. Furthermore, data currently collected from prepaid plans

reflect only very broad categories of service (e.g.,

physician visits) and would thus be of limited

usefulness in linking outcomes to the conditionspecific coverage exclusions of the prioritized list

(see ch. 4). In addition, the populations receiving

prepaid and FFS care during the demonstration

would differ by virtue of location (the latter would

be mostly rural populations), and again populationspecific factors may confound interpretation of the

data.1

Monitoring or surveying particular subpopulations likely to lose or gain from the change in

benefits (e.g., those with chronic conditions below

the line; those with terminal conditions who might

use hospice care; adults newly eligible for preventive care) does offer one opportunity to evaluate

directly the effect of the prioritized list. In many of

these cases, the size of the expected effect on the

specific population is large enough to be detectable.

Choosing appropriate subpopulations to study in

depth would thus be an important component of an

evaluation plan.

Difficulty Ensuring That the

Intervention Is Applied Consistently

The list itself gives no specific guidance regarding

how to assign patients to CT pairs, so no two

providers are likely to apply the list in the same way

to their patients. Differences in how the list is

applied would probably be the greatest between FFS

and prepaid care providers. Even between two

providers under the same payment system, however,

the ambiguity of the list is likely to lead to greatly

different interpretations of what is covered and what

is not. The addition of mental health and chemical

dependency services to the prioritized list could

further confound this problem.

Some of this ambiguity could be resolved over

time through greater provider education and instructions, but it is not clear that these instructions could

be sufficiently developed by the time the program

begins (assuming a startup date of July 1992) (see

ch. 4).2 And even with clearer instructions for using

the list, providers might violate those instructions in

their own interests or the interests of their patients

(see chs. 3, 4, and 5). The State may be unable to

prevent this from happening, or even to detect that

it occurs.

1 At least some of any differences found are likely to be caused by factors such as geographic barriers to access, rural provider shortages, and

differences in population characteristics and health care preferences, rather than solely by differences in FFS vs. prepaid care (U.S. Congress, 0~

September 1990). Sinm the detailed effects of such population-speci.tlc and geographic differences are not generally well-described quantitatively, they

cannot be easily adjusted for in a statistical analysis.

2 Note that the original July 1992 startup date has been postponed on a month-to-month basis pending HCFA approval of the waiver (see ch. 4).
Chapter 8--Evaluation Issues ● 197

THE PROPOSAL

AS A BROADER

POLITICAL EXPERIMENT

In contrast to the traditional health services

research demonstration (as outlined in the waiver

proposal), Oregon’s plan can also be seen as a

chance to test the question of whether a novel idea

to cover the uninsured poor can work without

substantially increasing costs. Indeed, many people

who are skeptical of some of the specifics of the

proposed program nonetheless view it as a chance to

test a novel health care reform strategy. In this

context, the Oregon demonstration would really be

a test of a comprehensive package of interventions,

in which separating out the effects of various

components is unnecessary. The ‘‘research’ question in this case is simply: Can the plan successfully

extend coverage to uninsured people without substantially raising long-term program and

costs?

Evaluating this question in the aggregate

social

would

not require nearly as detailed a level of data analysis

as would evaluating the separate effects of the

various components of the proposed program. The

crucial parameters to measure would be the level of

access to care (for which the level of benefits might

even be accepted as a proxy) and the difference

between actual demonstration program costs, projected Medicaid program costs if the poor uninsured

population were not covered, and perhaps estimated

costs of some alternative way of providing coverage

to uninsured persons. The danger of such an

approach is that as an experiment, its results could

only be appropriately extrapolated in the aggregate.

Other States could apply the results only if they, too,

were willing to implement the total package that

Oregon has proposed.

Finally, Oregon’s proposal presents a larger

political feasibility experiment: Can the State keep

the structure and dynamic of the program intact? If,

for example, program costs were higher than expected, would the legislature actually be willing and

able to reduce benefits or increase revenues to fund

it? Or would the plan evolve over time into simply

another version of the current system, in which

neither eliminating specific treatments nor raising

taxes is politically feasible, and the State must resort

once again to limiting eligibility and provider

payment?

In fact, some Oregonians have speculated that the

program’s design, in which funding can in theory

affect only the level of benefits, may actually serve

to increase the public’s willingness to fund Medicaid

by highlighting the treatments that would be cut if

funds were unavailable. Thus, the demonstration

may be of political interest to some policymakers

despite its potential drawbacks as a health services

research project.
Appendixes
Appendix A

Method of the Study

Study Request and Approval

The Office of Technology Assessment (OTA) was first

asked to examine Oregon’s Medicaid proposal in March

1990, in a letter from Representative John D. Dingell

(Chairman, House Committee on Energy and Commerce)

and Representative Henry A. Waxman (Chairman, House

Subcommittee on Health and the Environment). Senator

Al Gore (Chairman, Senate Subcommittee on Science,

Technology, and Space) sent a supporting letter requesting the OTA study in March 1990. These letters asked that

OTA study the proposal, placing special emphasis on the

method used to develop the prioritized list, an assessment

of the list itself, and an analysis of some of its likely

effects on costs, utilization, and the services available to

current Medicaid beneficiaries.

The prioritized list that was being developed and

considered by the Oregon Health Services Commission

(HSC) at the time the OTA study was requested was

subsequently rejected by the HSC. A new list, upon which

many of OTA’s analyses would be based, was developed

over the following year. With the expectation that the

OTA study could thus realistically begin, OTA’s congressional Technology Assessment Board approved the

proposed assessment of Oregon’s Medicaid proposal in

March 1991.

A third congressional letter regarding the OTA study

was received in May 1991 from members of the U.S.

Congress representing Oregon. This letter expressed

concern that the OTA study should not be focused too

narrowly and asked that the study consider the effects of

Oregon’s proposal on uninsured persons in the State and

on other aspects of the health care system as well.

Signatories included Senator Bob Packwood (ranking

minority member, Senate Committee on Finance); Senator Mark O. Hatfield (ranking minority member, Senate

Committee on Appropriations); Representative Les AuCoin; Representative Peter A. DeFazio; Representative

Michael J. Kopetski; Representative Robert F. (Bob)

Smith; and Representative Ron Wyden.

Information Sources and

Conduct of the Study

The fundamental information sources for this study

were documents produced by or for the State of Oregon.

These included the HSC’s prioritized list (and supporting

documents), submitted to the State legislature on May 1,

1991; the accompanying program cost estimate provided

by the private firm Coopers& Lybrand, also submitted to

the State legislature on May 1, 1991; and Oregon’s waiver

proposal, submitted to the U.S. Health Care Financing

Administration on August 16, 1991. Staff from the State

Office of Medical Assistance Programs, other State

offices, the HSC, Coopers & Lybrand, and Lewin/ICF,

Inc. (which performed some of the background analyses

for the waiver proposal under contract to the State) spent

a considerable amount of time, on the telephone and in

person, responding to OTA questions and clarifying the

details and status of the proposed program.

The HSC provided OTA with databases relating to the

prioritized list, which OTA used to perform its detailed

analyses of the ranking process and the list. OTA also

obtained some detailed data relating to Oregon’s current

and proposed Medicaid program under contract from

Coopers & Lybrand.

OTA staff made two site visits to the State, in January

and August 1991, during which they conducted informal

personal interviews with numerous individuals in Oregon

involved in the development of the proposal, or potentially affected by it. These included commissioners; State

representatives; representatives of hospital, physician,

and other provider groups; consumer representatives; and

researchers.

Several individuals provided clinical and legal background information assessing aspects of Oregon’s proposal under contract to OTA. This information included:

A memorandum regarding outcomes and usual

treatment in Oregon of infants with intraventricular

hemorrhage, anencephaly, and less than 500 grams

birth weight and less than 23 weeks gestation.

(Provided under contract by Pony M. Ehrenhaft,

Lake Oswego, OR.)

Detailed clinical opinions regarding ambiguities or

internal conflicts in the list and the effectiveness of

treatments for paired conditions below line 587. The

purpose of these papers was not to identify whether

individual clinicians disagreed with particular rankings of the list, since it would be reasonable to expect

that any given clinician would disagree with at least

some rankings. Rather, the purpose was to identify

any obvious inconsistencies in the list and the

clinical input to its development, and to examine

whether there was any potential for conflict (and, if

so, the source of that conflict) between the prioritized

list and clinical practice, Clinical contractors included David A. Asch, University of Pennsylvania,

Philadelphia, PA; James Patton, Philadelphia, PA;

Angelo Giardino, Robert Wood Johnson Clinical

Scholars Program, Philadelphia, PA; and Mark

Schuster, University of California, Los Angeles, CA.

–201–
202 . Evaluation of the Oregon Medicaid Proposal

● Memoranda regarding whether Oregon’s proposal

might be in legal conflict with the U.S. Constitution

or existing major Federal statutes (not including the

Medicaid statutes). (Provided under contract by

Kenneth R. Wing, School of Law, University of

Puget Sound, Tacoma, WA.)

In addition to the information sources above, OTA staff

consulted the published literature on such topics as health

preferences and life quality measures, health care for

Medicaid beneficiaries and the uninsured, and the effectiveness and safety of specific health care treatments and

services. OTA also consulted with outside experts in

various subjects (e.g., Medicaid, health preference surveys) during the course of the study.

Role of the Advisory Panel

OTA assessments include the selection of a

outside experts who provide OTA staff with

panel of

valuable

advice regarding the scope, direction, and substance of the

study. These experts do not write any portion of the OTA

report itself, nor do they have the opportunity to require

or prohibit the inclusion of any specific viewpoints or

information in the report. They are chosen for their

expertise and for the varied perspectives they represent.

They are not expected to reach consensus on specific

issues.

Nonetheless, the expertise of these individuals is

extremely important to OTA’s studies. They help ensure

that all important views have been considered by OTA,

and they provide guidance and detailed review of OTA’s

work. Because they have no final authority over the

contents of the report, their representation on the panel

does not mean that they necessarily agree with (or

disagree with) the findings of the OTA report.

The advisory panel to the OTA evaluation of Oregon’s

Medicaid proposal included individuals with interests and

expertise in such areas as law, medicine, ethics, health

care administration, children’s issues, State policy and

program administration, and the Medicaid program. The

State of Oregon was not represented on the panel itself,

although staff from the Oregon Office of Medical

Assistance Programs and the HSC received panel briefing

materials and attended all panel meetings. A list of

advisory panel members is included at the front of this

report.

Review Process

An initial draft report of OTA’s evaluation was

reviewed by advisory panel members in January 1992. A

revised draft was sent for review to the advisory panel and

to approximately 80 additional outside experts for comment the following month. These experts included

Federal and State officials, statisticians, ethicists, public

health experts, clinicians, other health care providers,

beneficiary and consumer advocates, and others with

relevant expertise or important perspectives. Approximately one-third of outside reviewers were from the State

of Oregon.

A final draft, revised after considering all reviewer

comments, was submitted to the Technology Assessment

Board at the end of March 1992.
Appendix B

Acknowledgments

This report was greatly aided by the assistance of many individuals who provided OTA staff with information and

advice over the course of the study, and those who participated in the review of the draft report. (These individuals do

not necessarily either agree or disagree with the findings and conclusions of this report. OTA assumes full responsibility

for the report ‘and the accuracy of its contents.)

Barry F. Anderson

Portland State University

Portland, OR

Bruce Bishop

Kaiser Permanente

Portland, OR

Arthur Caplan

University of Minnesota

Minneapolis, MN

Darren Coffman

Oregon Health Services Commission

Portland, OR

Michael Cohen

Montefiore Hospital

Bronx, NY

David Cooper

U.S. Department of Health and Human Services

Washington, DC

Robert DiPrete

Oregon Office of Medical Assistance Programs

Salem, OR

Marie Evans

National Association of Social Workers

Portland, OR

Brad Fancher

Oregon Medical Association

Portland, OR

Daniel Field

Oregon Association of Hospitals

Lake Oswego, OR

Samuel Flint

American Academy of Pediatrics

Elk Grove Village, IL

Melvina Ford

Congressional Research Service

Washington, DC

Steven Fox

Agency for Health Care Policy and Research

Rockville, MD

Sandra Franck-Weiby

Oregon Office of Health Policy

Salem, OR

Jerry Fuller

Oregon Office of Medical Assistance Programs

Salem, OR

Michael Garland

Oregon Health Decisions

Portland, OR

Marthe Gold

Office of Disease Prevention and Health Promotion

Washington, DC

John Golenski

Bioethics Consulting Group

Berkeley, CA

Thomas Granneman

Systemetrics

Lexington, MA

Bob Griss

United Cerebral Palsy Association

Washington, DC

David Hadom

Boulder, CO

Leslie Hendrickson

Oregon Office of Medical Assistance Programs

Salem, OR

Douglas Henley

Hope Mills, NC

Sandra Hunt

Coopers & Lybrand

San Francisco, CA

Thomas Hussey

Kaiser Permanence

Portland, OR

Richard Jensen

U.S. General Accounting Office

Washington, DC

Andrea Kealich

Oregon Medical Association

Portland, OR

Sandy Kinney

C1ackamas County Public Health Division

Oregon City, OR

-203-
204 ● Evaluation of the Oregon Medicaid Proposal

Stanley Kleiner

HSM Group

Scottsdale, AZ

Jim Lace

Oregon Pediatric Society

Salem, OR

Rebecca Landau

Oregon Office of Health Policy

Salem, OR

John LaPuma

Lutheran General Hospital

Park Ridge, IL

Scott Manchester

Oregon Health Action Campaign

Salem, OR

Diane Murdock

Virginia Beach, VA

Oregon Health Services Commission

Portland, OR

Donald Patrick

University of Washington

Seattle, WA

Ellen Pinney

Oregon Health Action Campaign

Salem, OR

Lynn Read

Oregon Office of Medical Assistance Programs

Salem, OR

Thomas Reardon

American Medical Association

Portland, OR

John Reynolds

Oregon Health Sciences University

Portland, OR

Richard Rimkunas

Library of Congress

Washington, DC

Carlos Rojas

Salud Medical Clinic

Salem, OR

Kenneth Rutledge

Oregon Association of Hospitals

Lake Oswego, OR 97035

Al Shelly

U.S. Senate Computer Center

Washington, DC

Paige Sipes-Metzler

Oregon Health Services Commission

Portland, OR

Pamela Short

U.S. Department of Health and Human Services

Rockville, MD

Ellen Smith

U.S. General Accounting Office

Seattle, WA

Bonnie Terhaar

Oregon Office of Medical Assistance Programs

Salem, OR

Ian Timm

Oregon Primary Care Association

Portland, OR

George Torrence

McMaster University

Hamilton, Ontario

Tom Troxel

Clackamas County Public Health Division

Oregon City, OR

Bruce Vladeck

United Hospital Fund of New York

New York, NY

Eric wall

Oregon Health Sciences University

Portland, OR

Daniel Weber

Oregon Association of Hospitals

Lake Oswego, OR

Judy Wells

American Academy of Pediatrics

Elk Grove Village, IL

Connie Wessner

Intergovernmental Health Policy Project

Washington, DC

Karen Whitaker

Oregon Office of Rural Health

Portland, OR

Curtis Whitton

Northwest Human Services

Salem, OR

Joshua Wiener

Brookings Institution

Washington, DC

Cheryl Williams

U.S. General Accounting Office

Seattle, WA

Sidney Wolfe

Public Citizen Health Research Group

Washington, DC
Appendix C

Oregon's Survey of Public Health-State Preferences

Introduction

One of the unique aspects of Oregon’s prioritization

process is its attempt to incorporate the public’s health

care values and preferences. This appendix supplements

chapter 3 by providing more detailed information on

Oregon’s effort to measure preferences for various health

states. These measures were used along with treatment

outcomes information to quantify a treatment’s net

benefit. As described in chapter 3, although it was an

important conceptual component of the prioritization

process, net benefit was ultimately not an important

determinant of condition-treatment (CT) pair order on the

list. Nonetheless, there is great interest in Oregon’s

incorporation of public preferences into outcomes assessment, and analyses of why Oregon’s original attempt at a

quantified cost-effectiveness approach to prioritization

failed has focused attention on the Oregon Health

Services Commission’s (HSC) measurement of net benefit (54,90,1 10,249).

This appendix first very briefly describes the science of

health-state preference measurement, emphasizing methods developed by Robert Kaplan and colleagues that were

later adapted for Oregon’s use. The comparability of

preference weights as measured by Kaplan in California

and the Oregon weights are examined. Next, inconsistent

survey responses are examined, as are methods that could

have been used to adjust weights. Lastly, the importance

of differences in preference weights by various respondent characteristics are examined in more depth than is

presented in chapter 3.

Measuring Health-State Preferences

With attention increasingly focusing on treatments for

chronic illness, outcome measures that describe treatment

effects in terms of both mortality and morbidity and also

incorporate public values associated with various outcomes are potentially very useful, Interventions such as

heart transplants might increase life expectancy, but they

may also seriously compromise highly valued aspects of

life’s quality such as physical functioning, mobility, and

social activity. Indexes of quality of life try to capture,

sometimes in a single measure, dimensions of health that

affect its quality. Health-state preferences are measures of

satisfaction or desirability that people associate with the

presence of symptoms and functional limitations that can

affect quality of life (73), Health-related quality of life

measures are increasingly being considered for program

evaluation, population monitoring, clinical research, and

policy analysis.

Research has shown that people can make remarkably

consistent subjective judgments, even when those judgments are abstract (74). Nonetheless, it is difficult to

measure health-state preferences because:

Individuals often make trade-offs (e.g., accept the

side effects of a drug in order to reduce the risk of

disease);

Preferences may change over time; and

Determining whose preferences to measure needs

careful consideration when preferences are applied

in a public policy context.

Investigators have defined different dimensions of

health and have developed methods to measure their

relative desirability. The three steps generally used to

obtain health-state preferences are summarized very

briefly below. There are several articles and texts

available that comprehensively review the state of the art

of defining and measuring health-state preferences

(21,63,73,74,75,76,137,247,302).

Step 1: Define Health and the

Health Attributes To Be Measured

When operationalizing “quality of life, ” researchers

often reference the World Health Organization’s definition of health. It describes health as “a state of complete

physical, mental, and social well-being and not merely the

absence of infirmity” (315).

Examples of health attributes included in quality of life

measures are shown in box C-1. For each attribute, levels

can be defined that represent stepwise increments from

good to poor functioning (e.g., no, mild or moderate, and

severe pain). A range of health states can be described by

selecting one level from each attribute. For the five health

attributes shown in box C-1, for example, there are a total

of 243 unique health states representing all possible

combinations of levels (i.e., 35

) One example of such a

health state is having mild to moderate limitations in

physical functioning and emotional well-being, but no

limitations in the other three attributes (i.e., social

function, pain, cognitive ability).

Step 2: Determine How Health States

Should Be Presented to Respondents

There are several ways health states can be presented to

respondents. One approach is to ask respondents to

evaluate each unique combination of attribute levels (e.g.,

–205–
206 ● Evaluation of the Oregon Medicaid Proposal

Box C-l—Example of Quality-of-Life

Health Attributes and Levels

Attribute Levels

● Physical function No limitations

Mild or moderate limitations

Severe limitations

● Social function No limitations

Mild or moderate limitations

Severe limitations

● Emotional No limitations

well-being Mild or moderate limitations

Severe limitations

● Pain No pain

Mild or moderate pain

Severe pain

● Cognitive ability No limitations

Mild or moderate limitations

Severe limitations

SOURCE: office of Technology Assesmen4 1992.

243 in the example above).l This method has limitations

because it is burdensome for respondents and it does not

provide information about how the respondent weights

and combines the attributes to arrive at their health-state

preference. Alternative approaches allow investigators to

estimate how important a particular attribute is to the

assessment of the overall health state.

Step 3: Determine How Respondents

Are To Communicate Their Preferences

Several different techniques or scaling methods that are

used to elicit health-state preferences from respondents

are shown in box C-2. Frequently, respondents are asked

to rate the desirability of each health state by placing it at

some point on a scale between two anchors (e.g., from O

to 100), usually representing death and perfect health.

Alternatively, respondents might be asked to make a

choice between alternative outcomes (e.g., see standard

gamble and time trade-off techniques in box C-2).

The Quality of Well-Being Scale

Oregon’s Health Service Commission considered several health status or health preference measures before

deciding to adapt the Quality of Well-Being (QWB) scale

(106).2 3 The QWB Scale includes three attributes of daily

functioning (i.e., mobility, physical activity, and social

activity) and a list of 21 symptoms or problems that might

inhibit function (table C-l). The mobility and physical

activity attributes have three levels, while the social

activity attribute has five levels. There are 945 possible

combinations of symptoms/functional levels (i.e., 21 x 3

x 3 x 5). The developers of this model took the following

steps to estimate the preference weights shown in table

c-1:

●

●

●

A stratified random sample of 343 case descriptions

(unique combinations of the 21 symptom/problems,

and mobility, physical activity and social activity

levels) was divided into eight sets (about 40 case

descriptions in each).

A random sample (conducted in a 2-year period

1974-75) of 8664 residents from the San Diego area

was divided into eight groups of about 100 and asked

during face-to-face interviews to rank the sets of

health states on a lo-point scale.

A mathematical model was used to estimate weights,

representing the relative desirability of the health

states on a scale from O (death) to 1 (good health).

An example of a QWB score for one individual at one

point in time is shown in box C-3. In this example, the

individual has one symptom (i.e., cough, wheezing, or

shortness of breath) and is categorized by level on each of

the three functional attributes (i.e., mobility, physical

activity, and social activity). The component weights (all

negative values) are subtracted from 1 (the score for

perfect health) to yield the “point-in-time well-being

score. Group QWB scores can be calculated as an

average of the individual member’s scores assessed for a

particular day or a defined interval of time (107).

Prognosis, or the probability of moving between health

states, has been integrated into the QWB model. While

QWB as described above is a static or time-specific

measure of function, the “well-life expectancy’ is a

dynamic measure. The “well-life expectancy” is the

product of QWB and the expected duration of stay in each

function level over a standard life period (Kaplan, R. M.,

and Anderson, J. P., 1988). Box C-4 shows an illustrative

computation of group “well-life expectancy. ” The concept of well-years5 or weighted life expectancy can be

used to evaluate the effectiveness of programs and health

1 Some of the possible health states can often be discarded on logical grounds. It is very unlikely, for example, that a person would experience severe

pain and have no limitation of cognitive, social, or physical functions.

z A number of investigators have contributed to the development of the QWB scale, including J.W. Bush, D.L. Patrick J.P. Andersow and C.C. Berry

(105). For simplicity, the model will be referred henceforth as the QWB model. Several articles referenced at the end of the appendix offer a more indepth

description of the QWB and its development.

s The HSC also considered the Sickness Impact Profde developed by Marilyn Bergner and a health service classification system developed by David

C. Hadorn (194).

q A supplernentzuy probability sample of 368 children was included (107).

S The term “Quality-Adjusted Life Years” (QALYs) is rdso used to describe the concept (107).
Appendix C-Oregon’s Survey of Public Health-State Preferences ● 207

Box C-2—Examples of Scaling Methods Used in Measuring Health-State Preferences

. Standard gamble: The respondent chooses between a certain outcome and a gamble. This technique meets the

requirements of certain decision theories that require preference judgments be made under conditions of

uncertainty. The technique relies on a lengthy interview with well-trained interviewers using specially prepared

props.

. Time trade-off: The respondent is asked how much time (years of life) he or she would be willing to give up

to be in a healthier state compared with a less healthy one. The technique relies on a lengthy interview with

well-trained interviewers using specially prepared props.

. Magnitude estimation: The respondent is given a standard health state and asked to provide a number or ratio

indicating how much worse each of the other states is compared with the standard. This method is relatively easy

to administer and easy for respondents to understand.

. Rating scale: The respondent rates the desirability of each health state by placing it at some point on a scale (e.g.,

from O to 100) between two anchors, usually representing death and perfect health. The rating scale is the most

frequently used method for measuring health-state preferences because it is relatively easy to administer and easy

for respondents to understand.

. Equivalence: The respondent decides how improvements of people in a specified health state are equivalent to

improvements of people in the maximum health state. This method is infrequently used in studies of health

preferences and is offensive to some.

. Willingness-to-pay: The respondent decides what proportion of income he or she is willing to pay each week

to get rid of a specified health condition or to have a specified probability of improving from a particular health

state to perfect health. This technique has been used more often in cost-effectiveness analyses to measure the

utility of reducing one’s risk of dying than in studies to measure preferences for various health states.

SOURCE: D.G. Froberg and R.L. Kane, “Methodology for Measuring Health-State Preferences-II: Scaling Methods,” Journul of Clinical

Epidemiology 42(5):459-471, 1989.

interventions. Dividing the cost of a program by the “as bad as death”) to 100 (representing ‘‘good health’ ‘).

well-years it yields gives a cost/utility ratio.

The QWB model is potentially useful because it

provides a comprehensive expression of health status that

simultaneously considers mortality and morbidity and

considers both risks and benefits of treatments under

evaluation (107).

Oregon’s Survey Content and Conduct

Oregon survey respondents rated a set of six functional

states (e.g., needing help to eat or go to the bathroom)6 and

23 health problems or symptoms (e.g., having stomach

aches, vomiting or diarrhea) on a scale of O (representing

A copy of the survey can be found at the end of this

appendix. For each health situation presented, respondents were to assume that they had only the problems

described and that the problems were permanent.

The functional states and health problems included on

the Oregon survey were taken from Kaplan’s California

survey, but modified for telephone administration.7 Telephone interviews took approximately 30 to 40 minutes.

The Survey Research Center of Oregon State University

at Corvallis administered the telephone survey in early

1990,8 A random-digit dialing technique was used to

reach a representative sample of the State’s population.9

G The sumey included two levels within three different attributes (i.e., mobility, physical activity, and social activity).

7 The California sumey had been administered in person--individuals completed written questio nnaires after receiving instruction while in small

groups. The Oregon Survey instrument was written at a sixth-grade reading level to help ensure oral comprehension of the questions. Oregon investigators

completed a small pretest (less than 100 calls were made) to see if scores obtained by phone were consistent with scores obtained in California. The

Oregon survey contained some items not on the California survey (i.e., four questions pertain to the use of drugs or alcohol, sexual performance, sleep

disorders, and mental health).

s The sumey was administered over a 2- to 3-week period.

9 The sampling hrne was provided to Oregon State University by a private consulting fm (135). Some regional weights were applied to the

completed survey to correct for a small degree of sampling error. The responses were also weighted so that each adult in the survey had an @ chance

of being selected. (If Unweighted, adults in households with eight adults would only have a one-eigth chance of being selected for the survey, while adults

in household with two adults would have a one-half chance of being selected.)
208 ● Evaluation of the Oregon Medicaid Proposal

Table C-1-Quality of Well-Being Scale Weights

Levels/no. Functional Limitations/Symptoms Weights

5

4

2

4

3

1

5

4

3

2

1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

Mobility Scale (MOB)

No limitations for health reasons

Did not drive a car, health related (younger than 16); did not ride in a car as usual for age, and/or did not use

public transportation, health related; or had or would have used more help than usual forage to use public

transportation; health related

In hospital, health related

Physical Activity Scale (PAC)

No limitations for health reasons

In wheelchair, moved or controlled movement of wheelchair without help from someone else; or had trouble or

did not try to lift, stoop, bend over, or use stairs or inclines, health related, and/or limped, used a cane,

crutches or walker, health related;and/or had any other physical limitation in walking, or did not try to walk

as far or as fast as others the same age are able, health related

In wheelchair, did not move or control the movement of wheelchair without help from someone else, or in bed,

chair, or couch for most or all of the day, health related

Social Activity Scale (SAC)

No limitations for health reasons

Limited in other role activity, health related

Limited in major (primary) role activity, health related

Performed no major role activity, health related, but did perform self-care activities

Performed no major role activity, health related, and did not perform or had more help than usual in performance

of one or more self-care activities, health related

Symptoms

Death (not on respondent’s card)

Loss of consciousness such as seizure (fits), fainting, or coma (out cold or knocked out)

Burn over large areas of face, body, arms, or legs

Pain, bleeding, itching, or discharge (drainage) from sexual organs--does not include normal menstrual

(monthly) bleeding

Trouble learning, remembering, or thinking clearly

Any combination of one or more hands, feet, arms, or legs either missing, deformed (crooked), paralyzed

(unable to move) or broken-includes wearing artificial limbs or braces

Pain, stiffness, weakness, numbness, or other discomfort in chest, stomach (including hernia or rupture), side,

neck, back, hips, or any joints or hands, feet, arms, legs

Pain, burning, bleeding, itching, or other difficulty with rectum, bowel movements, or urinations (passing water)

Sick or upset stomach, vomiting or loose bowel movements, with or without fever, chills, or aching all over

General tiredness, weakness, or weight loss

Cough, wheezing, or shortness or breath with or without fever, chills, or aching all over

Spells of feeling upset, being depressed, or of crying

Headache, or dizziness, or ringing in ears, or spells or feeling hot, or nervous, or shaky

Burning or itching rash on large areas of face, body, arms, or legs

Trouble talking, such as lisp, stuttering, “ hoarseness, or inability to speak

Pain or discomfort in one or both eyes (such as burning or itching) or any trouble seeing after correction

Overweight or underweight forage and height of skin defect of face, body, arms or legs, such as scars, pimples,

warts, bruises, or changes in color

Pain in ear, tooth, jaw, throat, lips, tongue; missing or crooked permanent teeth-includes wearing bridges or

false teeth; stuffy, runny nose; any trouble hearing-includes wearing a hearing aid

Taking medication or staying on a prescribed diet for health reasons

Wore eyeglasses or contact lenses

Breathing smog or unpleasant air

No symptoms or problem (not on respondent’s card)

Standard symptom/problem (not on respondent’s card)

4.000

-0.062

-0.090

-0.000

-0.060

-0.077

-0.000

-0.061

-0.061

-0.061

-0.106

-0.727

-0.407

-0.367

-0.349

-0.340

-0.333

-0.299

-0.292

-0.290

-0.259

-0.257

-0.257

-0.244

-0.240

-0.237

-0.230

-0.186

-0.170

-0.144

-0.101

-0.101

-0.000

-0.257

SOURCE: R.M. Kaplan and J.P. Anderson, J. P., “The General Health Policy Model: An Integrated Approach,

B. Spilker (cd.) (New Yonk, NY: Raven Press, 1990).

“ in Uuality Life Assessments in Clinical Trials,
Appendix C-Oregon’s Survey of Public Health-State Preferences ● 209

Box C-3—Illustrative Computation of the Point-in-Time Well-Being Score

Point-in-time well-being score for an individual (W):

W = 1 + (Symptom wt) + (MOBwt) + (PACwt) + (SACwt),

where wt is the preference-weighted measure for each symptom (symp), mobility limitation (MOB), physical

activity limitation (PAC), and social activity limitation (SAC).

The W score for a person with the following description profile may be calculated for 1 day as follows:

Quality of well-being

Level Description Weight

Symp-11 Cough, wheezing, or shortness of breath, with or without fever, chills, -0.257

or aching all over.

MOB-5 No limitations. -0.000

PAC-1 In bed, chair, or couch for most or all of the day (health related). -0.077

SAC-2 Performed no major role (health related) but did perform self care. -0.061

W = 1 + (-0.257)+ (-0.000)+ (-0.007)+ (-0.061)= 0.605

SOURCE: R.M. Kaplan and J.P. Anderson, “A General Health Policy Model: Update and Applications,” Health Services Resewch

23(2):203-235, June 1988.

Approximately 4,500 calls were made to obtain 1,001 to be in bed or in a wheelchair controlled by

completed interviews. 10

As an introduction to the telephone survey, interviewers told respondents that:

[The interview] contains several interesting topics

about how people feel about their health and how

their health affects the quality of their lives. The

information is important for it will help Oregon’s

Health Services Commission plan future health

support programs for the state’s citizens.

The interview consisted of six parts:ll

1. Respondents rated the “best” and “worst” possible health states. These scores were expected to be

the highest and lowest obtained throughout the

interview. The “best” and ‘‘worst” health states

presented were as follows:

Best

You can go anywhere, can move around freely

wherever you are, have no restrictions on activity,

and have no health problems.

Worst

You have to stay at a hospital or nursing home, have

someone else, need help to eat or go to the

bathroom, and have losses of consciousness from

seizures, blackouts or coma.

2. Respondents rated limitations in mobility (Ml,

M2), physical activity (Pi, P2) and social activity

(S1, S2) (see attached copy of the survey). The six

questions were presented in a nested format. At first,

respondents were told that they had a limitation in

each of the three functional domains (i.e., Ml,Pl ,S1

or M2,P2,S2). In subsequent questions one element

was dropped, one at time (e.g., Ml,P1, and then

Ml).

3. Respondents rated 23 symptoms. Symptoms were

asked about one at a time and not in combination

with functional limitations. 12

4. Respondents reported whether they had experienced

the functional states or symptoms, and if so, for how

long.

5. The following demographic information was obtained:

. the number of persons living in the household and

their age,13

10 More ~one-~of tel~hone numbers initially called were discomected. Of the rem g calls, approximately one-fourth of people answering

refused the interview and about one-ftith did not complete the interview. The characteristics of the nonrespondents are unknown because most hung up

their telephones before descriptive information could be obtained.

11 ~tewlewem ~omed respondents of tie co~ldent~ ad VOIUU@-y Mture of the sumey at the beg inning of the interview.

12 One exception to thiS WM tit “losses of consciousness from seizures, blackouts or coma” was included in the ‘‘worst” case scenario presented

at the beginning of the interview.

13 N-rin household 18 years or older and under 18 years of age.
220 . Evaluation of the Oregon Medicaid Proposal

Box C-4--Illustrative Computation of Well-Life Expectancy

Years in State Weight Weighted years

State (Y) (W) (Y x W)

Well . . . . . . . . . . . . . . . . . . . . . 65.2 1.00 65.2

Non-bed disability . . . . . . . . . 4.5 .59 2.7

Bed disability . . . . . . . . . . . . . 1.9 .34 .6

Current life expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.6 life years

Well-life expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68.5 well-years

Suppose that a group of individuals was in a well state for 65.2 years, in a state of non-bed disability for 4.5

years, and in a state of bed disability for 1.9 years before their deaths at the average age of 71.6. In order to make

adjustments for the diminished quality of life they suffered in the disability states, the duration of stay in each state

is multiplied by the preference associated with the state. Thus, the 4.5 years of non-bed disability become 2.7

equivalents of well years when an adjustment is made for the preferences associated with being in that state. Overall,

the well-life expectancy for this group is 68.5 years. The disability experienced by the group has reduced the quality

of their lives by an estimated 3.1 years.

SOURCE: R.M. Kaplan and JY. Anderson, “A General Health Policy Model: Update and Applications,” Heuhh Servz”ces Research

23(2):203-235, June 1988.

6.

. household members’ health insurance coverage, Weights for the functional states were calculated

. household income, somewhat differently. Respondents were asked to assign

. residence (county and town/city), scores to combinations of mobility, physical, and social

. respondent’s race/ethnicity, and fictional states. The score for a particular functional

● respondent age. state was calculated by subtracting the score assigned to

In an open-ended format, respondents were asked if

there were any household members who should

have seen a doctor but for some reason did not, and

if so, why the person did not see a doctor.

Respondents were also given an opportunity to

report anything about their health or about health

care in Oregon.

the smaller set of functional states from the score assigned

to the larger set of functional states (the sets differed by

the inclusion of one functional state). The score for M2,

for example, could be calculated by subtracting the score

for the F2,S2 question (i.e., the question including

functional states F2 and S2) from the M2,F2,S2 question

(i.e., the question including all three functional states M2,

P2, and S2).

The Calculation of Preference Weights QWB weights (i.e., the average of respondents’ indifor Each Health State vidual scores) for each function state and symptom are

shown in box 3-D (chapter 3). The scores are expressed

For each symptom, a weight was calculated as the

average of the following individual scores:

Health-state score =

–(’ ‘Best” health-state score – Symptom score)/10014

If, for example, an individual scored the “best” health

state as 90 and scored “trouble talking” as 72, the score

for “trouble talking” for that respondent would be

-(90-72)/100 or -0.188. This value represents one

individual’s perception of the amount taken away from

perfect health (score of 1) if he or she had trouble

talking. 15

as negative values because they represent the amount

associated with the condition that the public thinks should

be subtracted from perfect health (score of 1). The

functional limitation and health state that were perceived

to detract least from perfect health were being unable to

drive or use public transportation (-0.046) and wearing

glasses or contact lenses (-0.055). The functional limitation and health state judged to detract most from perfect

health were being confined to bed or in a wheelchair

controlled by someone else (–0.560), and having trouble

with the use of alcohol or drugs (-0.455). To describe a

particular morbidity state, clinicians could assign up to

14 me HSfJ ~comwfly repfi~ tit ~~vidu~ “~st” he~~ state scores (and not 100) were used in the denominator (193).

15 ~~c~od of ~~mlatingweigh~ as-es an additive model for tie pmfer~ce fwIction. CXherresearchers make the aSSUInptiOn Of amllltipkat.h%

model (260).
Appendix C--Oregon’s Survey of Public Health-State Preferences . 211

four functional limitations or symptoms-one from each

of the three categories of functional limitation and one

symptom. (See chapter 3 for a description of how

clinicians assigned the functional limitations and symptoms to CT pairs.)

Reliability and Validity of Preference Weights

Preference measurements are assessed by examining

their reliability and validity. A measure’s reliability is the

extent to which it gives consistent results. When intrarater reliability, for example, is high, it means that

subjects respond consistently when an item is presented

to them more than once over a short period of time.

Investigators have shown that respondents give consistent

QWB scale values when asked to repeat the task within

several days (1 1). Inter-rater reliability reflects consistency of responses among different raters.

A measure’s validity is the extent to which it corresponds to the ‘‘true” position of the person on the

characteristic being assessed. There are different dimensions of validity. Content validity reflects the adequacy of

the health-state descriptions in representing health status.

Construct validity relates to the degree to which results of

different scaling methods converge. Construct validity

can also be evaluated by examining the degree to which

predicted relationships between preferences and other

variables are supported. Robert Kaplan and his colleagues

have, for example, shown significant positive correlations

between QWB weights and self-rated health, and negative

correlations with age, number of chronic illnesses,

symptoms, and physician visits (109).

Studies have shown that preference weights sometimes

vary widely not only among individuals, as might be

expected, but also with the format used for describing the

health state, the framing of outcomes, the outcomes used

to anchor the scale, the scaling task used, and other

situation-specific factors (142). Mean values of grouped

individual scores are generally used as weights, but there

is considerable variation in ratings—some standard deviations from the Oregon survey approach 0.30 (see table

3-10 in chapter 3).16 The variation of individual Oregon

scores are of the same magnitude as is typically found in

preference measures. Evidence suggests that while individuals within groups express differences in preference,

preference weights are relatively constant from group to

group (260). Using mean, or average, scores can be

problematic because similar mean scores from two groups

could obscure two very dissimilar score profiles (141). At

the extreme, one group could unanimously rate being

confined to a wheelchair as .5 while in another, one-half

could rate it O (as bad as death) and the remainder as 1 (as

good as perfect health). The mean scores from these two

groups would be identical.

While some evidence suggests that certain preference

scales, including the QWB scale, are reliable and valid

(21 1), it is generally agreed that more research is needed

in this area (141). Further research could, among other

things, show how predictive preferences are of patient

decisionmaking and how and why preferences might

change over time (142).

Comparison of Kaplan’s and Oregon’s Methods

and Resultant Weights

There are several important differences between Kaplan’s and Oregon’s method of obtaining health-state

preference weights:

●

●

●

●

●

In Oregon, the interviews were conducted by telephone, while in California they were conducted in

person.

Kaplan presented respondents with health-state scenarios that included combinations of functional

limitations and symptoms. Oregon combined some

of the functional limitations in ‘‘nested’ questions,

but all but one of the symptoms (i.e., coma, fainting)

were presented to respondents one at a time.

Survey questions differed substantially in length and

substance. Table C-2 shows Kaplan’s descriptions of

health states alongside of those as defined in Oregon.

Questions were shortened for Oregon’s telephone

survey, but sometimes this significantly altered the

description of the health state. For example, Kaplan’s survey included the health state “trouble

talking such as lisp, stuttering, hoarseness, or being

unable to speak. ” This was abbreviated to “have

trouble talking, such as a lisp, stuttering or hoarseness’ on the Oregon survey. 17

The two instruments included different health states.

Oregon included four questions regarding the use of

drugs and alcohol, sexual performance, sleep problems, and worrying which were not included on the

Kaplan survey. Kaplan included a question on

“major’ role activity (e.g., work) and air pollution

not included on the Oregon survey.

The assumed duration of the health state differed in

the two surveys. Kaplan asked respondents to give

their preferences while imagining that the health

state was experienced on a particular day. Oregon

respondents were told to imagine the health states

described as permanent.

16 me Stmdwd devl~ti~~ iS ~ ~eas~e of dispersion from a me~ score, A s~n~d deviation as l~ge as O.SO for a distribution Of health preftXenCeS

on a O to 1 scale indicates that respondents differ greatly in their preferences (75).

17 D~g &plan’5 face-to-face intemicw5, tie he~~ s~[e5 were i~ti~ly presented to respondcn~ on small Wds in an abbreviated format. Before

rating the health state, the respondents read the more lengthy description of the health state (105).
Table C-2-Comparison of Oregon and Kaplan Health-State Weights

Oregon Kaplan

Oregon weight Kaplan et al. weight

Function limitations

Mobility

Have to stay at hospital or nursing home

Cannot drive a car or use public

transportation

Physical activity

Have to use a walker or wheelchair under

your own control

Have to be in bed or in a wheelchair

controlled by someone else

Social activity

Are limited in the recreational activities

you may participate in

Need help to eat or go to the bathroom

Health states/symptom

Have losses of consciousness from

seizures, blackouts or coma

Wear glasses or contact lenses

Have pain or discomfort in your eyes or

vision problems that corrective lenses

can’t fix

Have stomach aches, vomiting or

diarrhea

Have trouble falling asleep or staying

asleep

Have a bad burn over large areas of your

body

-0.049

-0.046

-0.373

-0.560

-0.062

—

—

-0.106

-o.

-o.

14

55

-0.248

-0.370

-0.248

–0.372

In hospital, health related

Did not drive a car, health related (younger than 16); did not ride in a car as usual for age,

health related; and/or did not use public transportation, health related; or had or would

have used more help than usual for age to use public transportation, health related

In wheelchair, moved or controlled movement of wheelchair without help from someone

else; or had trouble or did not try to lift, stoop, bend over, or use stairs or inclines, health

related; and/or limped, used a cane, crutches, or walker, health related; and/or had any

other physical limitation in walking, or did not try to walk as far or as fast as others the

same age are able, health related

In wheelchair, did not move or control the movement of wheelchair without help from

someone else, or in bed, chair, or couch for most or all of the day (health related)

Limited in other (e.g., recreational) role activity (health related)

Limited in major (primary) role activity (health related)

Performed no major role activity (health related) but did perform selfcare activities

Performed no major role (health related) and did not perform or had more trouble than

usual in performance of one or more self-care activities (health related)

Loss of consciousness such as seizure (fits), fainting, or coma (’(out cold” or “knocked

out”)

Wore eyeglasses or contact lenses

Pain or discomfort in one or both eyes (such as burning or itching) or any trouble seeing

after correction

Sick or upset stomach, vomiting, or loose bowel movement, with or without fever, chills, or

aching all over

Burn over large areas of face, body, arms or legs

-0.090

-0.062

-0.060

-0.077

-0.061

-0.061

-0.061

-0.106

-0.407

-0.101

-0.230

-0.290

—

-0.367
Appendix C--Oregon’s Survey of Public Health-State Preferences ● 213

I 1

t=to

mm

??

I
214 ● Evaluation of the Oregon Medicaid Proposal

●

●

A

Different methods were used to calculate the average

population weight. Oregon used subtraction to

estimate weights (e.g., for nested questions, the

value of health state C was determined by subtracting the value of health state AB from health state

ABC), while Kaplan used a regression model to

estimate weights.

Kaplan completed his survey in the mid-1970s,

while Oregon’s survey was completed in early 1990.

comparison of the preference weights obtained in

California and Oregon show that many are similar (see

table C-2). More than one-half (i.e., 15 of 27 health states

that can be compared) of the California and Oregon

weights do not vary by more than 20 percent. There are,

however, three health states with extremely different

weights: 18

●

●

●

A

Have to use a walker or wheelchair under your own

control (-0.373 Oregon vs. –0.060 California);

Have to be in bed or in a wheelchair controlled by

someone else (-0.560 Oregon vs. -0.077 California); and

Have losses of consciousness from seizures, blackouts, or coma (4).114 Oregon vs. –0.407 California).

possible explanation for these three extreme differences in weights lies in how weights for these three items

were calculated in Oregon. The health state ‘‘have to be

in a bed or in a wheelchair controlled by someone else”

was the last health state in the first series of nested

questions presented on the survey (see questions B, C, D,

and E of the survey). The series of nested questions can

be described as follows:

c Question B—WXYZ

● Question C—WXY

c Question D-W X

● Question E-W.

The weight for Y was estimated by subtracting the

values of question D from question C. Similarly, the

weight for Z was estimated by subtracting the value of

question C from question B. Three of the 4 functional

limitations have incremental values assigned to them.

That is, the weight for Z represents the added decrement

over and above having just X and Y. In contrast health

state W in question E (e.g., the bed/wheelchair item) was

assessed relative to the ‘‘best’ health state. Its value is

calculated as the difference between the value for question

E and the value assigned to “best” health. The other

Oregon functional limitation weight that deviates from

Kaplan’s is “have to use a walker or wheelchair under

your own control. ” It, too, is presented singly following

the second series of nested questions (i.e., questions F, G,

and H) and its weight is relative to “best” health rather

than to the presence of other functional limitations.

The deviant score for the ‘losses of consciousness and

coma” health state could also be explained by its

presentation to respondents. Rather than being described

to respondents by itself as the other symptoms’ are (i.e.,

questions I through Z6), it is presented as part of a nested

question (question B) and its weight is calculated relative

to question C and not to the “best” health state. All other

symptom weights were calculated relative to “best”

health.

Aside from these three extreme differences, most of the

preference weights in California are comparable to

Oregon weights (i.e., more than one-half of Oregon’s

weights are within 20 percent of California weights) (see

figure C-l). Given the differences in survey content and

methods, these similarities are actually surprising. Oregon respondents were told to assume that the health states

described were permanent, while California respondents

were to try and imagine the health state at one point in time

or one day. It is counterintuitive, for example, that Oregon

respondents would rate permanently “experiencing pain

while urinating or having a bowel movement” similar to

California respondents experiencing this symptom at a

point in time (Oregon -.299 vs. California -.292). It may

be that respondents generally ignored the instructions

regarding duration of the health state and imagine them as

permanent or tempera.xy according to their own experience. Some of the descriptive information on the California survey probably helped respondents consider the

health state as temporary. In the description of “cough

and wheezing and shortness of breath” and of “sick or

upset stomach, vomiting, or loose bowel movement, ’ the

California survey included ‘with or without fever, chills,

or aching all over, ’ symptoms almost universally experienced as temporary. In these two cases, the California

weights were considerably more favorable than Oregon

weights (i.e., –0.257 vs. -0.318 and -0.290 vs. -0.370)

(table C-2).

Methods of Adjusting Weights for Inconsistent

Responses and Respondents’ Sociodemographic

and Health Characteristics

More than one-third (38 percent) of Oregon respondents provided some logically inconsistent responses to

the survey. This section describes the nature of inconsistent responses and proposes methods that could have been

used to adjust preference weights for these inconsistencies. Adjusted weights are then compared to Oregon

weights and the effect of using these new weights on the

ranking of CT pairs is assessed. Next, the importance of

differences in preference weights by sociodemographic

and health characteristics is assessed. The preference

18 For S~pliciW, tie ~or~g fmm tie Oregon s~ey is shown here. See table C-2 for diffCrenCCS b he~ti-state description.
Appendix C--Oregon’s Survey of Public Health-State Preferences . 215

Figure C-l-Comparison of Oregon and Kaplan Health-State Weights

Health status/symptom

Can't drive

Glasses/contacts

Hospital

r

Limited recreation

Self-care help

Loss consciousness

Prescribed medication/diet

Lisp/stutter

Overweight/acne

Ear pain

Headache/dizziness

Eye pain

Back/joint pain

-0.5

L

M2

Ml

H19

S2

S1

H1

H18

H14

H16

H17

H12

H15

H6

-0.4 -0.3 -0.2 -0.1 0

Health state/symptom

Trouble walking

Tired/weak

Rash

Bodily function pain

Cough/wheeze

Sex organ drainage

Depressed/upset

Trouble remembering

Stomach aches

Bad bums

Walker

Wheelchair

m Oregon ~ Kaplan

H5

H9

H13

H7

H1O

H3

H11

H4

H8

H2

P2

-0.MO

I 1 P1

-0.6 -0.4 -0.2 0

m Oregon D Kaplan

SOURCES: Oregon Health Services Commission, Salem, OR, unpublished data provided to the Office of Technology

Assessment in 1991; R.M. Kaplan and J,P. Anderson, “The General Health Policy Model: An Integrated

Approach,” Qua/ity of Life Assessments in C/inica/ Trials, B. Spilker (cd.) (New York, NY: Raven Press,

1990).
216 ● Evaluation of the Oregon Medicaid Proposal

Table C-3-Frequency of Ratings of the “Best” and “Worst” Health States Described in the Survey

Best health

Worst health state (Q2)

state (Q I ) o 1-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 100 Total

o 0

1 -9“ : : : : : : : : : : : : : o

10-19 . . . . . . . . . . . 1 1

20-29 . . . . . . . . . . . 1 1 1 1 1 5

30-39 . . . . . . . . . . . 0

40-49 . . . . . . . . . . . 0

50-59 . . . . . . . . . . . 11 2 4 1 1 3 1 1 24

60-69 . . . . . . . . . . . 3 2 1 1 1 2 10

70-79 . . . . . . . . . . . 9 1 8 16 1 3 1 1 1 41

80-89 . . . . . . . . . . . 11 7 8 13 4 3 7 1 1 55

90-99 . . . . . . . . . . . 22 16 18 13 6 2 5 2 2 0 86

100 . . . . . . . . . . . . . 343 109 127 103 33 18 43 2 2 1 1 782

Total . . . . . . . . . 401 133 165 151 46 26 63 7 2 4 3 3 1,004”

asumexm~ ~mplesizeofl,ool beeause ofweighting by county andhousehoki @mPosition.

SOURCE: Office ofTechnology Assessmen~ 1992. Based on analysesofOregon Health Services Commission telephone survey data.

Figure C-2—Health-State Boundaries Set by Survey Responses to Q1and Q2

Q1

100

3 4 %

I I

6% t >

<

16% >

SOURCE: Office of Technology Assessment, 1992. Based on data from the Oregon Health Serviees Commission.

weights for some health states, for example, vary significantly by experience of the health state, Analyses are

presented showing how condition-treatment (CT) pair

placement on the list would change if only selected

subgroups of respondents’ weights were used.

The Origin of Inconsistent Scores

Respondents were told early in the interview how to

scale their responses to the survey. A score of zero was to

be given to a state “as bad as death,” a score of 100 to

states representing “good health,” and a score of 50 to

health states halfway between death and good health.

Survey respondents were then given the opportunity to

provide a personal “boundary” for their health-state

scores when they answered the first two questions on the

survey and rated the “best” and ‘‘worst” health states.

This technique is often used in measuring health-state

preferences. Sometimes, interviewers construct a “thermometer’ with respondent’s upper and lower scores to

remind the respondent what the logical range of responses

are for subsequent questions.

Table C-3 shows that most respondents gave low scores

to the “worst” and high scores to the ‘‘best’ health

states. 19 One-third (34 percent) of respondents had a range

of values of 100-they assigned a value of O to the

‘‘worst and 100 to the “best” health state. Some

respondents, however, had very narrow boundaries-5

percent provided a range of values of 50 or less (e.g., a

score of 50 to 59 for the “worst’ health state and a score

of 80 to 89 for the “best” health state). Figure C-2 shows

the “boundaries” respondents set in responding to the

“best” and “worst” health-state questions.

Thirteen percent of respondents gave a score of less

than 100 (e.g., 70) to the “best” health state, but later

rated health states such as experiencing ear pain higher

19 More tin thr~q~ers (78 ~rmnt) of respondents valued the ‘‘best’ health state ss 100 and ~ pCICent vtlhmd the ‘‘wOrSt’ S@? m 0.
Appendix C---Oregon’s Survey of Public Health-State Preferences ● 217

Table C-4—Frequency of Inconsistent Responses to Survey Used To Assess

Health-State Preferences

Nest Both

Nest 1 + 2a1 or 2 nest 1 + 2

consistent inconsistent inconsistent Total

No boundary inconsistency . . . . . . . 620 148 15 783

Left-sided inconsistentb . . . . . . . . . 42 29 14 85

Right-sided inconsistencyc . . . . . . . . 61 26 7 94

Both left- and right-sided 9 24 6 39

inconsistency . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . 732 227 42 1,001

a Nest I refers to the first set of functional limitation questions that include limitations Ml, P1, and S1. N-t 2 refers to

the second set of functional limitation questions that include limitations M2, P2, and S2. (See questionnaire at the end

of this appendix.)

b ~ft-sided inmnsistewies ~eferto health-state ~res that are lower than those assigned to the “worst” health State.

c Right-sM~ imonsistendes refertohealth-state scmresthat are higherthanthose assigned to the “b=r’health state.

SOURCE: Office of Technology Assessment, 1992. Based on analyses of Oregon Health Services Commission

telephone survey data.

(e.g. 90). For discussion purposes, health-state scores that

are assigned higher scores than the “best” health state

will be referred to as ‘‘right-sided boundary violations. ”

Twelve percent of respondents gave health-state scores

that were lower than that given to the “worst’ health state

(e.g. rating the “worst” health state as 40 and then rating

“having stomach aches, vomiting or diarrhea” as 30).

These health-state scores will be referredtoas‘‘left-sided

boundary violations. ’ Table C-4 shows the frequency of

these boundary violations. At the extreme, eight respondents (1 percent of the total) gave a lower score to the

“best” health state than to the “worst” health state.

Health-state scores are positive when there are rightsided boundary violations. This can be seen by again

examining the way health-state scores are calculated:

Health-state score =

● (’’Best” health-state score - Symptom score)/100

These positive scores have the effect of bringing the

health-state weights 20 which vary from O (perfect health)

to –1 (death) closer to O or perfect health.

The most likely explanation for the boundary violations is that respondents forgot the value assigned to the

“best” and “worst” health states when they were later

asked to value particular health states. 21 Conceivably,

when respondents assigned a health state a lower value

than that assigned to the “worst” health state, they may

have been indicating a health state that they indeed felt

was worse than that health state. That any of the health

states represent states better than good health seems less

plausible. Table C-5 shows the extent to which inconsistent responses were provided for each health state, and

table C-6 shows the number of inconsistent responses

over the course of the interview. More than 1 in 10 (12

percent) of respondents provided at least 5 responses

inconsistent with their “best” and ‘‘worst’ health-state

boundaries.

A second type of inconsistency occurred in response to

the nested functional limitation questions. More than

one-quarter (27 percent) of respondents provided inconsistent responses to one or both of the nested questions.

One example of such a response is giving a less favorable

score to a health state defined by one functional limitation

(e.g., used a wheelchair) than to a health state including

that and an additional limitation (e.g., used a wheelchair

and needed help going to the bathroom or eating). One

possible explanation for these inconsistent responses is

that respondents may have been confused by the length of

some of the nested questions (see survey questions B

through H). Respondents can process simultaneously

only five to nine pieces of information (140) and some of

the questions may exceed this threshold.

When respondents with either type of inconsistent

response are eliminated, the sample size is reduced from

1,001 to 620 (table C-4). The HSC decided to use all

values from the survey, despite the logical inconsistencies

of some responses, because it reported that the deletion of

inconsistent responses did not greatly affect the healthstate weights and it wanted to maintain the total sample,

which was representative of the State’s population.

Weights of consistent as compared with inconsistent

respondents are shown in table C-7 and are graphed in

figure C-3. There are statistically significant differences

for all but five weights when consistent and inconsistent

respondents are compared (table C-7). Figure C-3 shows

that the two sets of weights, although different, are highly

correlated (correlation coefficient = 0.98).

m H~th-s@te weigh~ are the average of individual health-state SCOEs.

ZI me ~t~iewm did not remind respondents of their earlier responses.

328-308 0 - 92 - 8
218 ● Evaluation of the Oregon Medicaid Proposal

Table C-5--Frequency of Inconsistent Responses to the Survey Used To Develop Preference Weights

Percent of time respondents rated larger

number of functional Iimitations as better

than a smaller subset of those

functional limitations

Components of “nested” functional/imitation questions

1st nested question

Ml. Have to stay at hospital or nursing home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.6

P1 . Have to be in bed or in a wheelchair controlled by someone else

S1. Need help to eat or go to the bathroom

HI. Experience loss of consciousness due to seizures, blackouts or coma

2nd nested question

M2. Cannot drive a oar or use public transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5

Have to use a walker or wheelchair under your own control

;:: Are Iimited in the recreational activities you may participate in

Percent of time Percent of time

rated better than rated worse than

“best” health state “worst” health state

Health states/symptoms

H2.

H3.

H4.

H5.

H6.

H7.

H8.

H9.

H1O.

H11.

H12.

H13.

H14.

H15.

H16.

H17.

H18.

H19.

H20.

H21 .

H22.

H23.

Have a bad burn over large areas of your body. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have drainage from your sexual organs and discomfort or pain . . . . . . . . . . . . . . . . . . . .

Have trouble learning, remembering or thinking dearly . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed or broken leg, but you have no

other limitations on activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a painful or weak condition of the back or joints. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain while you are urinating or having a bowel movement . . . . . . . . . . . . . . . . . . . .

Have stomach aches, vomiting or diarrhea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience a lot of tiredness or weakness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cough, wheeze or have trouble breathing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Often depressed or upset. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have headaches or dizziness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have an itchy rash over large areas of your body . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble talking, such as a lisp, stuttering or hoarseness . . . . . . . . . . . . . . . . . . . . . .

Pain or discomfort in your eyes or vision problems that corrective lenses can’t fix. . . . .

Overweight or have acne on your face . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain in your ear or trouble hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are on prescribed medicine or a prescribed diet for health reasons . . . . . . . . . . . . . . . . .

Wear glasses or contact lenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble falling asleep or staying asleep . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with sexual interest or performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

You can’t stop worrying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with the use of drugs or alcohol. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.9

2.3

3.4

4.7

4.1

3.0

2.7

3.2

2.6

3.0

3.2

3.1

5.8

4.7

5.4

4.4

7.7

10.7

i!)

5.6

2.1

4.5

3.2

3.5

1.9

:::

3.1

2.2

2.6

3.0

3.4

2.4

1.7

2.1

1.9

1.9

1.0

0.7

2.3

3.3

2.3

5.9

SOURCE: Office of Technology Assessment, 1992. Based on analyses of Oregon Health Services Commission telephone survey data.

Table C-6-Frequency of Scores Reported as Better or Worse than Scores Assigned to the

Best and Worst Health State (Q1 and Q2)a

Number of scores better

than score assigned to Number of scores worse than score assigned to the worst health state (Q2)

the best health state (Q1 ) o 1 2 3 4 5 6-9 10-26 Total

o . . . . . . . . . . . . . . . . . . . . . . . . . . 783 33 10 7 5 6 8 18 869

1 . . . . . . . . . . . . . . . . . . . . . . . . . . 12 0 0 1 0 2 3 0 17

2 . . . . . . . . . . . . . . . . . . . . . . . . . . 9 0 1 0 0 0 0 0 10

3 . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2 2 0 0 1 0 0 15

4 . . . . . . . . . . . . . . . . . . . . . . . . . . 3 0 2 0 0 1 0 1 7

5 10 0 0 0 0 0 2 0 11

6-9. : : : : : : : : : : : : : : : : : : : : : : : : : 19 3 0 0 1 0 1 2 25

10-26 . . . . . . . . . . . . . . . . . . . . . . . 29 6 1 2 0 2 3 4 46

Total . . . . . . . . . . . . . . . . . . . . . 876 43 15 9 6 10 16 24 1,000

a ROW and Wlumn cells may not add to totals because of sample weighting.

SOURCE: Office of Technology Assessment, 1992. Based on analyses of Oregon Health Services Commission telephone survey data.
Appendix C--Oregon’s Survey of Public Health-State Preferences ● 219

Table C-7—Differences in Preference Weights According to Consistency of Respondenta

Consistent Inconsistent

Functional Iimitations/symptoms respondents respondents

Cannot drive a car or use public transportation (M2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are limited in the recreational activities you may participate in (S2) . . . . . . . . . . . . . . . . . . . .

Have to stay at hospital or nursing home (Ml) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wear glasses or contact lenses (H19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Need help to eat or go to the bathroom (S1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience loss of consciousness due to seizures, blackouts or coma (H1). . . . . . . . . . . .

Have trouble talking, such as a lisp, stuttering or hoarseness (H14) . . . . . . . . . . . . . . . . . . . .

Have pain in your ear or trouble hearing (H17) ., . . . . . . . . . . . . . . . . . . . . ., , . . . . . . . . . . .

Overweight or have acne on your face (H16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

You can’t stop worrying (H23) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble falling asleep or staying asleep (H21 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pain or discomfort in your eyes or vision problems that

corrective lenses can’t fix (H15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed or broken leg,

but you have no other limitations on activity (H5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a painful or weak condition of the back or joints (H6) . . . . . . . . . . . . . . . , . . . . . . . . . . .

Have trouble with sexual interest or performance (H22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience a lot of tiredness or weakness (H9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have an itchy rash over large areas of your body (H13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain while you are urinating or having a bowel movement (H7) . . . . . . . . . . . . . . . . . .

Have headaches or dizziness (H12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cough, wheeze or have trouble breathing (H1O) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have drainage from your sexual organs and discomfort or pain (H3) . . . . . . . . . . . . . . . . . . .

Often depressed or upset (H11) ..,... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a bad burn overlarge areas of your body(H2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have stomach aches, vomiting or diarrhea(H8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble learning, remembering or thinking clearly . . . . . . . . . . . . . . . . . . . . . . . . .

Have to use a walker or wheelchair under your own control (P2) . . . . . . . . . . . . . . . . . . . . . .

Have trouble with the use of drugs or alcohol (H24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have to be in bed or in a wheelchair controlled by someone else (P1) . . . . . . . . . . . . . . . . . .

-0.052

-0.062

-0.070

-0.083

-0,112

-0.117

-0.203

-0.232

-0.232

-0.242

-0.262

-0,270

-0.276

-0.281

-0.287

-0.294

-0.315

-0.316

-0.322

4.33 7

-0.339

-0.354

-0.384

-0.387

-0.395

-0.409

-0.474

-0.613

-0.210 b

aconsistent r~pondents (n _620) are those wnomade no boundary violations and who had consistent responses to the nested questions. fn~nsistent

respondents(n =381) made either boundary violations or provided inconsistent responses to the nested questions.

bDiffere~~be~een consistent andin~nsistent weights aresignifieant (p -.O2)asessessed byt-tests.

SOURCE: Offiee of Technology Assessmen~ 1992. Based on analyses of Oregon Health Sarvices Commission telephone survey data.

Comparing those who made none with those who made

at least one inconsistent response shows that respondents

who are Medicaid recipients, low income, and racial/

ethnic minority group members were significantly more

likely to have provided inconsistent responses. One-half

of respondents with incomes at or below the poverty level,

for example, provided some inconsistent responses, while

37 percent of those with higher incomes provided

inconsistent responses.

Adjusted Weights

Adjustments could have been made for inconsistent

responses. The assumption could be made that when

respondents assigned a higher score to a symptom than to

the “best” health state that they viewed their upper

boundary as 100. Similarly, one could assume that when

respondents assigned a lower score to a symptom than to

the “worst” health state that they viewed their lower

boundary as O. Nine percent of respondents made only

right-sided violations, 9 percent made only left-sided

violations, and 4 percent made both left- and right-sided

violations (see table C-4). Assigning 100 to the “best”

health state if respondents made any right-sided errors and

zero to the “worst’ health state if respondents made any

left-sided errors, using the respondents’ range of responses as the denominator,22 and eliminating inconsistent responses to the nested functional state questions

yields the weights shown in the second column of table

C-8. In general, these scores are lower than the weights

actually used (shown in the first column).

The respondent’s boundary was ignored when the

health-state score was calculated (see formula above). The

Oregon weights were calculated with 100 as a denominator, which assumes that the range of values for health

states was 100 for everyone. For those with ranges of

values less than 100, the use of 100 effectively decreases

the weight assigned to the health state.

Another way to adjust for inconsistent responses is to

assume that responses to question 1 should have been 100

22 me OregOn ~ei~k ~e.e c~cu~t~ Ushg 100 W, he denominator, even though 22 percent of respondents rated tie ‘best’ he~~ s~te ~ less ~

100.
220 . Evaluation of the Oregon Medicaid Proposal

Figure C-3-Survey Weights of Consistent and Inconsistent Respondents

Survey question

Can’t drive

Limited recreation

Hospital

Glasses/contacts

Self-care help

Loss consciousness

Trouble talking

Overweight/acne

Ear pain

worry

sleep problems

Eye pain

Trouble walking

Back/joint pain

Sexual dysfunction

Tired/weak

Rash

Bodily function pain

Headache/dizziness

Cough/wheeze

Sex organ drainage

Depressed/upset

Bad burns

Stomach aches

Trouble remembering

Walker

Drugs/alcohol

Bed or wheelchair

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . .

-0.8 -0.6 -0.4 -0.2 0

Survey weight

—— Consistent + Inconsistent

SOURCE: Office of Technology Assessment, 1992. Based on data from the Oregon Health Services Commission.

and the range of values from best and worst health state Differences in Weights by Sociodemographic and

is 100. These adjusted weights, shown in the third column Health-State Experience

of table C-8, also tend to be lower than those that were

There are numerous significant differences in prefer- used (shown in the first column).

ence weights according to respondent sociodemographic

To test whether the adjustment of weights is important,

characteristics and health-state experience (see table 3-11

in ch. 3). That Oregon’s preference weights varied by

the ranking of (CT pairs (by category and within category sociodemographic and health experience should not be

by net benefit) using adjusted and unadjusted weights was surprising. Kaplan and his colleagues report negative

compared. When adjustments are made for inconsistent correlations between individual’s QWB scores and age,

responses using the first method (i.e., using weights in the number of chronic medical conditions, number of resecond column of table C-8),23 the resultant change in ported symptoms or problems, number of physician

weights shifts the relative placement of 49 CT pairs (7 contacts, and dysfunctional status (109). After reviewing

percent) by 10 or more lines relative to the ranking the literature, Froberg concluded that age and experience

expected when unadjusted weights are used to rank CT with the health state being rated may influence rater’s

pairs. Despite these shifts, there would have been no valuations, but that the effects of most other demographic

changes in CT pair coverage with line 587 defining and experiential variables (e.g., sex, religion, marital

coverage. status) are small or nonexistent (75). Analyses of the

23 me ~ei@tS fi fie fmt ~lm of table C.7 ~ adjusted forri@ and left-sided bOUII&ry violation and exclude inconsistent responses tO the neStd

questions.
Appendix C--Oregon’s Survey of Public Health-State Preferences ● 221

Table C-8—Health-State Preference Weights Calculated by Different Methods

Oregon OTA adjusted OTA adjusted

Functional Iimitations/symptoms weightsa method 1 b method 2C

Mobility

Ml. Have to stay at hospital or nursing home . . . . . . . . . . . . . . . . . . . . . .

M2. Cannot drive a car or use public transportation . . . . . . . . . . . . . . . . .

Physical activity

P1 . Have to be in bed or in a wheelchair controlled

by someone else . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

P2. Have to use a walker or wheelchair under

your own control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Social activity

S1 . Need help to eat or go to the bathroom . . . . . . . . . . . . . . . . . . . , . . .

S2. Are limited in the recreational activities

you may participate in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Health states/symptoms

HI.

H2.

H3.

H4.

H5.

H6.

H7.

H8.

H9.

H1O.

H11.

H12.

H13.

H14.

H15.

H16.

H17.

H18.

H19.

H20.

H21 .

H22.

H23.

Have losses of consciousness from seizures,

blackouts or coma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a bad burn over large areas of your body , . . . . . . . . . . . . . . . .

Have drainage from your sexual organs and

discomfort or pain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble learning, remembering or

thinking clearly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed

or broken leg, but you have no other imitations

on activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . .

Have a painful or weak condition of the

back or joints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . .

Have pain while you are urinating or having

a bowel movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have stomach aches, vomiting or diarrhea. . . . . . . . . . . . . . . . . . . .

Experience a lot of tiredness or weakness . . . . . . . . . . . . . . . . . . . . .

Cough, wheeze or have trouble breathing . . . . . . . . . . . . . . . . . . . . .

Are often depressed or upset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have headaches or dizziness . . . . . . . . . . . . . . . . . . . , ... , . . . . . . .

Have an itchy rash over large areas of your body . . . . . . . . . . . . . . .

Have trouble talking, such as a lisp, stuttering

or hoarseness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain or discomfort in your eyes or vision

problems that corrective lenses can’t fix. . . . . . . . . . . . . . . . . . . . . . .

Are overweight or have acne on your face . . . . . . . . . . . . . . . . . . . .

Have pain in your ear or trouble hearing . . . . . . . . . . . . . . . . . . . . . .

Are on prescribed medicine or a prescribed diet

for health reasons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wear glasses or contact lenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble falling asleep or staying asleep . . . . . . . . . . . . . . . . . . .

Have trouble with sexual interest or performance . . . . . . . . . . . . . . .

Can’t stop worrying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with the use of drugs or alcohol . . . . . . . . . . . . . . . . . .

-0.049 (0.137)

-0.046 (0.1 12)

-0.560 (0.257)

-0.373 (0.246)

-0.106 (0.146)

-0.062 (0.099)

-4.114 (0.175)

-0.372 (0.265)

-0,325 (0.240)

-0.367 (0.235)

-0.077 (0.104)

-0.065 (0.093)

-0.653 (0.224)

-0.447 (0.232)

-0.121 (0.134)

-0.071 (0.092)

-0.128 (0.141)

-0.448 (0.263)

-0,395 (0.243)

-0.444 (0.228)

-0.069 (0.096)

-0.059 (0.086)

-0.609 (0.223)

-0.417 (0.222)

-0.110 (0.1 23)

-0.064 (0.085)

-0.114 (0.129)

-0.420 (0.251)

-0.372 (0.236)

-0.414 (0.216)

-0.299 (0.200)

-0.300 (0.196)

-0.346 (0.228)

-0.418 (0.227)

-0.321 (0.190)

-0.366 (0.21 3)

-0.374 (0.218)

-0.352 (0.212)

-0.344 (0.216)

-0.234 (0.1 89)

-0.294 (0.195)

-0.260 (0.21 5)

-0.263 (0.196)

-0.169 (0.1 71)

-0.099 (0.148)

-0.295 (0.206)

-0.323 (0.247)

-0.261 (0.204)

-0.502 (0.275)

a Weights as report~ by Oregon Health Services COmm ~sion.

b Adjust~ weights ~~ulated by assigning 100 t.the (tbesf’ health state if r~pon~nts made any right-sid~ errors and O to the “worst” health State if

respondents made any left-sided errors, using the respondents rangeof responses as the denominator, and eliminating irmnsistent responses to the nested

functional state questions.

c Adjust~ weights Ca[alatd by assigning 100 to r* Ponses to Q1.

SOURCE: Office of Technology Assessment, 1992. Based on analyses of Oregon Health Services Commission telephone survey data.

Oregon survey data using multivariate techniques show race/ethnicity, and residence sometimes affect the

that respondent age and experience with the health state weights; and that Medicaid participation and poverty do

often significantly affect the weights, respondent sex, not affect the weights.

Z$ ~ySi5 ofv~anm Wm u5~ t. ~5~5 the @que effecw of respondent sociodemographk and health experience c~acteristics con~ofl~g for other

factors (see table 3-11 inch. 3).
222 ● Evaluation of the Oregon Medicaid Proposal

Table C-9-Differences in Preference Weights According to Respondent Health-State Experience

No experience Experience

Functional Iimitations/symptoms weight (number) weight (number)

Cannot drive a car or use public transportation (M2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have to stay at hospital or nursing home (Ml) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Are limited in the recreational activities you may participate in (S2). . . . . . . . . . . . . . . . . . . . . . .

Wear glasses or contact lenses (H19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Need help to eat or go to the bathroom (S1 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience loss of consciousness due to seizures, blackouts or coma (HI) . . . . . . . . . . . . . . . .

Have trouble talking, such as a lisp, stuttering or hoarseness (H14). . . . . . . . . . . . . . . . . . . . . . .

You can’t stop worrying (H23) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain in your ear or trouble hearing (H17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Overweight or have acne on your face(H16). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pain or discomfort in your eyes or Vision problems that corrective lenses can’t fix (H15), . . . . .

Have trouble falling asleep or staying asleep (H21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have difficulty in walking because of a paralyzed or broken Ieg, but you have no other

limitations on activity(H5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a painful or weak condition of the back or joints (H6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience a lot of tiredness or weakness (H9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with sexual interest or performance(H22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have an itchy rash overlarge areas of your body(H13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have pain while you are urinating or having a bowel movement (H7) . . . . . . . . . . . . . . . . . . . . .

Have headaches or dizziness (H12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Often depressed or upset (H11 ) . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have drainage from your sexual organs and discomfort or pain (H3) . . . . . . . . . . . . . . . . . . . . . .

Cough, wheeze or have trouble breathing (H1O) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have a bad burn over large areas of your body (H2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble learning, remembering or thinking clearly . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have to use a walker or wheelchair under your own control (P2) . . . . . . . . . . . . . . . . . . . . . . . . .

Have stomach aches, vomiting or diarrhea(H8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have trouble with the use of drugs or alcohol (H24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Have to be in bed or in a wheelchair controlled by someone else (P1) . . . . . . . . . . . . . . . . . . . . .

-0.044(826)

-0.056(556)

-0.062(679)

-0.078(310)

-0.104(956)

--0.116(937)

-0.189(970)

-0.218(820)

-0.222(684)

-0.233(552)

-0.251 (910)

-0.259(651)

-0.260(857)

-0.265(473)

-0.282(761)

-0.284(886)

-0.302(831)

-0.308(787)

-0.324(607)

-0.329(738)

-0.330(882)

-0.338(700)

-0.372(960)

-0.375(874)

-0.385(922)

-0.387(617)

-0.460(902)

-0.564(926)

-0.056(173)

-0.041 (441)

-0.063(321)

-0.044(689)

-0.147 (40)

-0.082 (59)

-0.155 (31)

-0.205(170)

-0.204(315)

-0.192(438)

-0.216 (85)

-0.230(343)

-0.214(141)

-0.243(525)

-0.253(235)

-0.207 (85)

-0.273(166)

-0.266(204)

-0.276(388)

-0.319(256)

-0.290(107)

-0.271 (294)

-0.399 (30)

-0.314(122)

-0.238 (78)

-0.346(381)

-0.396 (74)

-0.504 (74)

SOURCE: Office ofTechnology Assessmen~ 1992. Based on analysesofOregon Health Services Commission telephone surveydata.

Of some concern are the 12 significant differences in

preference scores by health-state experience (see table

3-11 in ch.3). For all of the 12 differences, respondents

who had experienced the health state viewed it more

favorably than those who had not. Table C-9 and figure

C-4 show the weights of respondents with and without

health-state experience. Although different, the two sets

of weights are highly correlated (correlation coefficient

=0.96)

If ranking had been determined by category and net

benefit within category and the preference weights of

those having experienced the health state in question had

been used instead of average weights, there would have

been shifts in CT pair placement on the list. A total of 45

CT pairs (6 percent) would shift up or down the list by10

or more lines relative to the placement expected if average

scores were used. Following these shifts, six CT pairs

would change coverage status with coverage set at line

587 (three would move up to be covered, three would

move down to lose coverage).

Because those who have experienced a symptom or

functional limitation view it as less burdensome than

those who have nonexperienced it, applying the "experience” weights usually has the effect of shifting the CT

pair down the list. Take, for example, a treatment for a

condition that improves mobility and reduces the probability that a patient would need to use a walker or

wheelchair following treatment. This reduced chance of

reliance on a walker or wheelchair is valued more by those

never having experienced their use. If weights of those

with experience with wheelchairs and walkers are used,

this CT pair would move down the list.

Given the significant differences in some weights by

sex (see table 3-1 1), it may be appropriate to selectively

apply women’s or men’s weights to conditions that only

affect one sex. Applying women’s weights for the

symptoms “drainage from sexual organs” and “sexual

dysfunction” to dysmenorrhea (CT pair 574), which is

characterized by these symptoms, for example, shifts this

CT pair down the list 10 lines. Women view these

symptoms more favorably then men do. Box C-5 shows

how the calculation of net benefit for the dysmenorrhea

CT pair is affected by using men’s and women’s weights.

Summary

The science of defining and measuring health-state

preferences is evolving and is important because there is

an increasing need to assess health care interventions in

terms of mortality and morbidity, taking into account

public preferences for various morbidity states. Measures
Appendix C-Oregon’s Survey of Public Health-State Preferences . 223

Figure C-4-Survey Weights of Respondents With and Without

Health-State Experience

Survey weight

~ No experience - Experience

SOURCE: OfficeofT%hnology Assessment 1992. 8asedondata from the Oregon Health Services Commission.

of health-state preference have been incorporated into the ●

design of clinical trials, and their analyses show that the

ability to detect a treatment’s effectiveness is sometimes

improved when quality-of-life measures are used (108).

Oregon conducted a survey to assess public health-state

preferences and used the preference weights from this

survey to assess the net benefit of the 709 treatments on

the prioritized list. In the final prioritization scheme used

by the HSC, the quantified net benefit term that included

consideration of patient preferences was not an important

determinant of CT pair order. There has, however, been

considerable debate as to whether the preferences as

assessed in Oregon could be used as a part of a

prioritization process.

●

OTA concludes that the public health-state preferences

as assessed in Oregon should not yet be used as part of a

prioritization process for the following reasons:

More than one-third of respondents provided inconsistent responses to the survey. Respondents who

were poor, Medicaid recipients, or members of

racial/ethnic minority groups were more likely to

give inconsistent responses. The extent of inconsistent responses may indicate that respondents were

not able to comprehend the content of the survey by

phone. Most of the preferences of consistent respondents were significantly different from those of

inconsistent respondents, but the two sets of weights

are highly correlated. When adjustments are made

for inconsistencies, the weights change and when

applied to the list, significantly change the order of

7 percent of CT pairs (i.e., change the order by 10 or

more lines).

There is considerable person-to-person variation in

preferences, as evidenced by relatively large standard deviations associated with mean weights. Some

of this variation can be explained by differences in

preferences according to characteristics such as age,
Box C-5-Calculating Net Benefit Using Women’s vs. Men’s Weights for

the Condition-Treatment (CT) Pair Dysmenorrhea

Women’s weights

Without treatment With treatment

QoL

State

pa FL/Sb Weight c

value d(P X Value)

1. Death . . . . . . . . . . . . . . . . . 0.00 — –1.000 0.000 0.0000

2. Morbidity state 1 . . . . . . . . 0.90 H3 -0.3071 0.6929 0.62361

3. Morbidity state 2 . . . . . . . . 0.10 H22 -0.2557 0.7443 0.07443

4. Morbidity state 3 . . . . . . . . — — — — —

5. Perfect health . . . . . . . . . . . 0.00 — 0.000 1.000 0.0000

Z (P x QoL value) . . . . . . . 0.69804

Men’s weights

Without treatment

QoL

pa FL/Sb Weightc

valued(P X Value)

0.00 — -1.000 0.000 0.0000

0.20 H3 -0.3071 0.6929 0.13858

0.05 H22 -0.2557 0.7443 0.037215

— — —

0.75 — 0.000 1.000 0.7500

0.925795

With treatment

QoL QoL

State

pa FL/Sb Weight c

value d(P X value)

1. Death . . . . . . . . . . . . . . . . . 0.00 — -1.000 0.000 0.0000

2. Morbidity state 1 . . . . . . . . 0.90 H3 -0.3510 0.6490 0.5841

3. Morbidity state 2 . . . . . . . . 0.10 H22 -0.3059 0.6941 0.06941

4. Morbidity state 3 . . . . . . . . — — — — —

5. Perfect health . . . . . . . . . . . 0.00 — 0.000 1.000 0.0000

Z (P X QoL Value) . . . . . . . 0.65351

QoL QoL

pa FL/ S

b Weightc

valued(P X value)

0.00 — -1.000 0.000 0.0000

0.20 H3 -0.3510 0.6490 0.1298

0.05 H22 -0.3059 0.6941 0.034705

— — —

0.75 — 0.000 1.000 0.7500

0.914505

NOTE: Net benefit is the difference between the value of Z (P x QoL value) for patients with and without treatment. Forwornen, the net benefit is .925795 -0.69S04. 0.227755. For men,

the net benefit is 0.914505465351 = 0.260995.

a P - probability of being in state.

b FUS _ ~WtiMal Iimitationkymptom assodated with health state (see box 3-D for description of health states).

c Wejght= thewe~~thepu~~~gm tothe~~tional[imitatio~symptom. Can be interpreted as the amount Wken may from Pedwt h~lth(vaiu$’d ~1 ) associated with the presence

of a functional limitation/symptom. Weights for all telephone survey items are shown in box 3-D.

d QoLval~ -quality ~ life ~lue -(1 +w~gM), ~en there ismorethan one functio~l limitat~n or symptom ~ign~ to the health ~ate, weights are dded before SUmming to 1. Can

be interpreted aa the value associated with the state on a scale from O (death) to 1 (perfect health).

SOURCE: Office of Technology Assessment, 1992. Based on data from the Oregon Heaith Services Commission.
Appendix C--Oregon’s Survey of Public Health-State Preferences ● 225

sex, and whether the respondent had experienced the

condition in question. When average weights of

subpopulations are applied (e.g., women, those with

experience with the health state), the order of

selected CT pairs changes significantly (i.e., by 10 or

more lines).

● Oregon used an adaptation of the QWB scale to

assess health-state preferences. The majority of

health states as measured by Oregon and Kaplan are

similar. This finding is surprising, given that California respondents were asked to consider the health

state in question at one point in time while Oregon

respondents were to consider the health state to be

permanent. The literature suggests that duration of a

health state dramatically affects preference (234). It

is possible that respondents in both California and

Oregon disregarded the instructions and gave preferences using their own frame of reference.

. An examination of a possible cause of three extreme

differences in health-state preference between California and Oregon respondents points to a possible

limitation in how preferences are calculated. There

appear to be differences in preferences when health

states are measured as compared with “best” health

versus as compared with another symptomatic health

state.

In light of the extent of inconsistent responses, the

Oregon weights should have been adjusted before being

incorporated into the net benefit calculation. The inconsistencies in responses are troublesome, especially as

inconsistent respondents were more likely to have been

low income, Medicaid recipients, and members of racial/

ethnic minority groups. Nonetheless, if one assumes that

the inconsistencies do not reflect total incomprehension

of the survey, corrections could have been made to

minimize their effect.

The second issue, that preference weights differ

significantly by sociodemographic and health characteristics, is more troubling. In light of the finding that using

different weights for certain CT pairs (e.g., women’s

weights for dysmenorrhea) alters CT pair order on the list,

careful consideration might be given to when subpopulation weights should be applied It may be that finding

such differences invalidates the premise that health

preferences are universally held and hence the use of such

weights at all.

The last issue identified, that many of the preference

weights estimated by Kaplan and Oregon are similar

when they should probably be different, points to

potential limitations in the underlying method. It maybe

that respondents cannot articulate preferences while

simultaneously considering externally defined prognosis

or duration of the health state.

In light of these issues, OTA concludes that much

additional research is needed to validate health-state

preference instruments and measurement techniques before they can be used as part of resource allocation

decisions.
226 . Evaluation of the Oregon Medicaid Proposal

REP : Phone No.

PAGE : Area No .
Appendix C-Oregon’s Survey of Public Health-State Preferences ● 227

B . Now , here is the second . You have to stay at a

hospital or nursing home, have to be in bed o r

in a wheelchair controlled by someone else, nee d

help to eat or go to the bathroom, and have losse s

of consciousness from seizures, blackouts or coma .

Again , on a scale of O to 100, what score woul d

you give in this situation? . . . . . . . . . . .

C. Moving on to other situations, you have to stay a t

a hospital or nursing home, have to be in bed o r

in a wheelchair controlled by someone else, an d

need help to eat or go to the bathroom, but hav e

no other health problems . . . . . . . . . . . . .

SCORE

DK/NA. . 999

SCORE

DK/NA. . 999

D. You can be taken anywhere, but have to be i n

bed or in a wheelchair controlled by someon e

else , need help to eat or go to the bathroom ,

but have no other health problems. . . . . . . . . . SCORE

DK\NA. . 9 9 9

E. You can be taken anywhere, but have to be i n

bed or in a wheelchair controlled by someon e

else . Otherwise, you have no restrictions o n

activity and have no other health problems. . . . . SCOR E

DK\NA. . 999

F. You cannot drive a car or use publi c

transportation , you have to use a walker o r

wheelchair under your own control, and ar e

limited in the recreational activities yo u

may participate in . You have no other healt h

problems. . . . . . . . . . . . . . . . . . . . . . SCORE

DK\NA. . 999

G. You can be taken anywhere but you have to us e

a walker or a wheelchair under your own control,

and are limited in the recreational activitie s

you may perform, but have no other health problems .SCORE

DK\NA. . 99 9

H . You can be taken anywhere, but you have to us e

a walker or a wheelchair under your own control.

Otherwise, you have no restrictions on activit y

and have no other health problems . . . . . . . . . SCORE

DK/NA. . 99 9

I . You can go anywhere and have no limitation s

or other activity, but wear glasses or contac t

lenses. . . . . . . . . . . . . . . . . . . . . . . SCORE

DK/NA. . 999
228 ● Evaluation of the Oregon Medicaid Proposal

Before we continue , I‘d like to remind you that we are asking you t o

rate each health situation on a scale of O to 100, where O is deat h

and 100 is good health. You may use any number from O

rating .

J .

K.

L.

M.

N.

o.

P.

Q.

R.

s.

You can go anywhere and have no limitations

on physical or other activity, but have pai n

or discomfort in your eyes or vision problem s

that corrective lenses can't fix. . . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but have stomac h

aches, vomiting or diarrhea . . . . . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but have troubl e

falling asleep or staying asleep. . . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but have a ba d

burn over large areas of your body. . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but are o n

prescribed medicine or a prescribed diet fo r

health reasons. . . . . . . . . . . . . . . . . . .

You can go anywhere and have no limitation s

on physical or other activity, but hav e

drainage from your sexual organs and discomfort or pain. . . . . . . . . . . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but have troubl e

with sexual interest or performance . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but have pai n

in your ear or trouble hearing. . . . . . . . . . .

You can go anywhere and have no limitations

on physical or other activity, but have troubl e

learning, remembering or thinking clearly . . . . .

You can go anywhere . You have difficult y

walking, but no other limitations on activity . . .

to 100 for you r

SCORE

DK\NA. . 999

SCORE

DK/NA. . 999

SCORE

DK/NA. . 999

SCORE

DK/NA. . 999

SCORE

DK/NA. . 99 9

SCORE

DK/NA. . 999

SCORE

DK\NA. . 999

SCORE

DK/NA. . 999

SCORE

DK\NA. . 999

SCORE

DK/NA. . 999
Appendix C-Oregon’s Survey of Public Health-State Preferences . 229

As we continue , please remember we are asking you to rate each healt h

situation on a scale of O to 100 , where O is death and 100 is goo d

health . You may use any number form O to 100 in your ratings.

T .

u .

v .

w .

x .

Y .

Z 1 .

Z2.

Z3.

Z4.

Z5.

You can go anywhere . You have difficulty i n

walking because of a paralyzed or broken leg ,

but you have no other limitations on activity . . .

You can go anywhere and have no limitation s

on physical or other activity, but you hav e

trouble talking, such as a lisp, stutterin g

or hoarseness . . . . . . . . . . . . . . . . . . .

You can go anywhere and have no limitation s

on physical or other activity, but you can’ t

stop worrying . . . . . . . . . . . . . . . . . . .

You can go anywhere and have no limitation s

on physical or other activity, but you have a

painful or weak condition of the back or joints . .

You can go anywhere and have no limitation s

on physical or other activity, but you have a n

itchy rash over large areas of your body. . . . . .

You can go anywhere and have no limitations on your

physical or other activity, but you have pai n

while you are urinating or having a bowel movement.

SCORE

DK/NA. . 999

SCORE

DK/NA. . 999

SCORE

DK/NA. . 999

SCORE

DK/NA. . 999

SCORE

DK/NA. . 99 9

SCORE

DK/NA. . 99 9

You can go anywhere and have no limitations on

physical activity, but you have trouble with th e

use of drugs or alcohol. . . . . . . . . . . .

You can go anywhere and have no limitations o n

physical activity, but you have headaches o r

dizziness. . . . . . . . . . . . . . . . . . .

You can go anywhere and have no limitations o n

physical or other activity, but you experienc e

a lot of tiredness or weakness . . . . . . . .

You can go anywhere and have no limitations o n

physical or other activity, but you are ofte n

depressed or upset . . . . . . . . . . . . . .

You can go anywhere and have no limitations o n

physical or other activity, but you cough ,

wheeze or have trouble breathing . . . . . . .

. . SCORE

DK/NA. . 99 9

. . SCORE

DK/NA. . 999

a

. . SCORE

DK/NA. . 99 9

. . SCORE

DK/NA. . 999

. . SCORE

DK\NA. . 999
230 ● Evaluation of the Oregon Medicaid Proposal

Z6 . You can go anywhere and have no limitations o n

physical or other activity, but are overweigh t

or have acne on your face . . . . . . . . . . . . SCORE

DK/NA. . 99 9

Thank you for your ratings. Next, I have here a list of medica l

conditions. As I read each one , will you please tell me if you hav e

had or presently have the condition ? (INT: START WITH RED-CHECKED

ITEM AND WORK YOUR WAY THROUGH ALL 30.)

I NO YES HAD

bumu~a Awn

1. You have been, at some time, unable t o

drive a car or use publi c

transportation . . . . . . . . . . .

2 . You have used a walker or wheelchai r

under your own control . . . . . . .

3 . You have been limited in th e

recreational activities in whic h

you participate. . . . . . . . . . .

4. You

i n

o r

5. You

o r

6. YOU

o r

7. You

have experienced difficult y

walking because of a paralyzed

broken leg. . . . . . . . . . . .

have had stomach aches, vomiting

diarrhea. . . . . . . . . . . . .

have had trouble falling aslee p

staying asleep. . . . . . . . . .

have been overweight or

have had acne on your face. . . . .

8. You have experienced pain in your

ear or have had trouble hearing . . .

9. You have stayed in a hospital or

in a nursing home . . . . . . . . . .

1 0 . You have had trouble with th e

use of drugs or alcohol. . . . . . .

11. You have had drainage from your sexua l

organs and discomfort or pain. . . .

1

1

1

1

1

1

1

1

1

1

1

2

2

2

2

2

2

2

2

2

2

2

3

3

3

3

3

3

3

3

3

3

3

YES,

flONTH

tEARS
Appendix C-Oregon’s Survey of Public Health-State Preferences ● 231

YES , s

I NO YES HAD MONTCONDITION

12. You have had headaches or dizziness .

13. You have been in a bed or a wheelchair

controlled by someone else. . . . . .

1 4 . You have often felt depresse d

or upset . . . . . . . . . . . . . .

1 5 . You have had trouble learning ,

remembering or thinking clearly. . .

16. You have experienced pain while

urinating or havin g

a bowel movement . . . . . . . . . .

1 7 . You have coughed, wheezed or

had trouble breathing. . . . . . . .

18. You have had pain or weakness in your

back or joints . . . . . . . . . . .

19. You have had an itchy rash over large

areas or your body . . . . . . . . .

20. You wear glasses or contact lenses. .

21. You have had trouble with sexua l

interest or performance. . . . . . .

22. You have had difficulty in walking. .

23. You have had trouble talking. . . . .

24. You have been unable to stop worrying

DK/NA!

1

1

1

1

1

1

1

1

1

1

1

1

1

25. You have experienced pain or discomfort

in your eyes or had vision problems that

corrective lenses can’t fix. . . . . 1

NOT HAD OR HAVE YEAR.

2 3

2 3

2 3

2 3

2

2

2

2

2

2

2

2

2

2

3

3

3

3

3

3

3

3

3

3

26. You have been on prescribed medicine

or a prescribed diet for health

reasons . . . . . . . . . . . . . . . 1

27. You have had a bad burn over

large areas of your body . . . . . . 1

2 8 . You have experienced a lot of tiredness

or weakness. . . . . . . . . . . . . 1

2

2

2

3

3

3
232 ● Evaluation of the Oregon Medicaid Proposal

2 9 . You have needed help in eating

or going to the bathroom . . . . . . 1

30. You have had loss in consciousness

due to seizures, blackouts or coma . 1 2

3

3

Finally, a few questions about yourself. . .

31. Including yourself, how many persons are living in your

immediate household?

NUMBER OF PERSONS

Refused . . . . . 99

32. How many are 18 years or older?

33. How many are under 18 years of age?

NUMBER OF PERSONS

Refused . . . . . 99

NUMBER OF PERSONS

Refused . . . . . 99

3 4 . We are interested in the level of health insurance coverage fo r

Oregon families . Is anyone in your household presently covered b y

health insurance, that is , a health insurance pla n which pay s

any part of a doctor or a hospital bill ? Do not count Medicare ,

Medicaid or plans that pay only for accidents .

DK/NA . . . . 3

NO. . . . . . 2

I

YES . . . . . 1

b 34a. How many adults and children in your househol d

are covered by this type of health insurance plan ?

NUMBER COVERED

34b. Are there any adults or children in your household

who are not covered by this type of health

insurance?

DK/NA . . . . . . . 1

NO . . . . . . . . 2

I

YES . . . . . . . . 3

ti34c. How many adults or children in your household

are not covered by this type of health insurance?

NUMBER
Appendix C--Oregon’s Survey of Public Health-State Preferences ● 233

35. Incidentally, do

card, or not?

you or anyone in your household carry a

DK/NA. . . . . .

NO . . . . . . .

~y’s” “ “ “ “ “ “

Medicai d

. 1

. 2

[ INT : REFER

THEN COMPARE

k 35a. How many persons in your household are covere d

NUMBER COVERED

by

TO Q 31 FOR THE TOTAL HH SIZE AND WRITE IT HERE. ( )*

THE INCOME LEVEL FOR THE HH SIZE IN THE TABLE BELOW AND

ASK THE FOLLOWING QUESTION:]

36. By the way, is your total household income f o r

below $ ?

HH SIZE INCOME ABOVE.

SAME .

1 . . . . . . . . . . . . $ 6,00 0 BELOW.

2 . . . . . . . . . . . . 8,00 0 DK/NA.

3 . . . . . . . . . . . . 10,000

4 . . . . . . . . . . . . 12,000

5 ● . . . . . . . . . . . 14,000

6 . . . . . . . . . . . . 16,000

7 . . . . . . . . . . . . 18,250

8 . . . . . . . . . . . . 20,250

9 . . . . . . . . . . . . 22,250

10. . . . . . . . . . . . 24,250

1989 above or

.

.

.

.

.

●

✎

✎

37. Thinking back over the past 12 months, was there any

you or someone in your household should have seen a

for some reason did not ?

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1

2

3

4

when

doctor but

DK/NA . . . . . 1

NO. . . . . ● . 2

YES.. . . . . . 3

+37a. What do you feel is the main reason this person or

persons did not see a doctor when they should have ?

(PROBE!)

What else ?

38. Would you please tell me in (or near) which town or city yo u

live ?

TOWN OR CITY

Refused . . . . . . . . . . . . . 999
234 . Evaluation of the Oregon Medicaid Proposal

3 9 . Which one of thes e best describes your racial or ethni c

heritage -- white , black , America n Indian , Orienta l or Hispanic ?

WHITE 1

2

3

4

5

6

—

● ✎ ✎ ✎ ✎ ✎

BLACK ✎ ✎ ✎ ✎ ✎ ✎

AMERICAN INDIAN .

ORIENTAL. . . . .

HISPANIC. . . . .

Refused . . . . .

40. One final question . What you r age on your last birthday ?

YEARS . . .

Refused . . 99

4 1 . Is there anything else you would like t o tell us about you r

health or about healt h care in Oregon?

(THANK YOU FOR YOUR COOPERATION!)

--- ---- ---- ---- ---- ---- ---- ---- - -

OBSERVATION) :

R'S Sex? MALE ..... 1

FEMALE . . . . . 2

- -

(BY

42.

Interviewer's Sig . Dat e
Appendix D

Prioritized Health Services List

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

PNEUMOCOCCAL PNEUMONIA, OTHER BACTERIAL PNEUMONIA, BRONCHOPNEUMONIA, INFLUENZA WITH PNEUMONIA

MEDICAL THERAPY

020.3-.5,022.1,073,466,481 -483,485-486,487.1

90000-99999

1 Category: 1

TUBERCULOSIS

MEDICAL THERAPY

010-012

90000-99999

2 Category: 5

PERITONITIS

MEDICAL AND SURGICAL TREATMENT

567

90000-99999

3 Category: 1

FOREIGN BODY IN PHARYNX, LARYNX, TRACHEA, BRONCHUS & ESOPHAGUS

REMOVAL OF FOREIGN BODY

933.0- .1,934.0-.1,935.1

31635,40804

4 Category: 1

APPENDICITIS

APPENDECTOMY

540-543

44950,44900,44960

5 Category: 1

RUPTURED INTESTINE

REPAIR

569.3

44600-10

6 Category: 1

HERNIA WITH OBSTRUCTION AND/OR GANGRENE

REPAIR

550.0-.1,551-552

39502-41, 43330-31, 43885, 44050, 44346, 49500-611, 49000, 51500,55540

7 Category: 1

CROUP SYNDROME, ACUTE LARYNGOTRACHEITIS

MEDICAL THERAPY, INTUBATION, TRACHEOTOMY

464.0-.4

90000-99999,31500,31600

8 Category: 1

ACUTE ORBITAL CELLULITIS

MEDICAL THERAPY

376.0

90000-99999

9 Category: 1

ECTOPIC PREGNANCY

SURGERY

633

58700, 58720,58770,58980,59135

10 Category: 1

INJURY TO MAJOR BLOOD VESSELS OF UPPER EXTREMITY

LIGATION

903

37618

11 Category: 1

RUPTURED SPLEEN

REPAIR/SPLENECTOMY/INCISION

865.04

38100,49000,38115

12 Category: 1

–235–
236 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: ACUTE PELVIC INFLAMMATORY DISEASE

Treatment: MEDICAL AND SURGICAL TREATMENT

I C D-9: 614.0,614.3,616.5,615. 0

CPT: 11043,58150,58805,58925,58980,90000-99999

Line: 1 3 Category: 1

Diagnosis: ACUTE PYELONEPHRITIS, RENAL & PERINEPHRIC ABSCESS

Treatment: MEDICAL AND SURGICAL THERAPY

IcD-9: 590.1-. 2

CPT: 50200,50220,90000-99999

Line: 1 4 Category: 1

Diagnosis: ANAPHYLACTIC SHOCK DUE TO FOOD, DRUG OR OTHER NON-VENOMOUS SOURCE

Treatment: MEDICAL THERAPY

I C D-9: 995.0,995. 2

CPT: 90000-99999

Line: 1 5 Category: 1

Diagnosis: GALLSTONE WITH CHOLECYSTITIS AND OTHER DISORDERS OF BILE DUCT

Treatment: CHOLECYSTECTOMY

IcD-9: 574.0-.1,574.3-.4,575.0- .5,576.1-. 3

CPT: 47420-60,47480-90,47500-605,49000

Line: 1 6 Category: 1

Oiagnosis: RESPIRATORY OBSTRUCTION

Treatment: REPAIR OF CHOANAL ATRESIA

ICD-9: 748.0

CPT: 30540

Line: 1 7 Category: 2

Diagnosis: SYPHILI S

Treatment: MEDICAL THERAPY

[CD-9: 090-097

CPT: 90000-99999

Line: 1 8 Category: 5

Diagnosis: POLYCYTHEMIA NEONATORUM, SYMPTOMATIC

Treatment: MEDICAL THERAPY

ICD-9: 776.4

CPT: 36450,90000-99999

Line: 20 Category: 2

Diagnosis: PREGNANCY

Treatment: OBSTETRICAL CARE

Line: 21 Category: 2

Diagnosis: LOU BIRTH WEIGHT (500 GM AND OVER)

Treatment: MEDICAL THERAPY

ICD-9: 765.12- .19,769,778.1

CPT: 90000-99999

Line: 2 2 Category: 2

Diagnosis: SYNDROME OF “INFANT OF A DIABETIC MOTHER” AND NEONATAL HYPOGLYCEMIA

Treatment: MEDICAL THERAPY

ICD-9: 775.O,775.6

CPT: 36510,36660,90000-99999

Line: 2 3 Category: 2

Treatment: MEDICAL THERAPY

ICD-9: 771 .4-.5

CPT: 900O0-99999

Line: 2 4 Category: 2
Appendix D--Prioritized Health Services List . 237

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: GALACTOSEMIA

Treatment: MEDICAL THERAPY

[CD-9: 271 .1,774.5

CPT: 90000-99999

Line: 2 5 Category: 2

Diagnosis: HYPOGLYCEMIC COMA; HYPOGLYCEMIA

Treatment: MEDICAL THERAPY

ICD-9: 251.0-251. 2

CPT: 90000-99999

Line: 2 6 Category: 3

Diagnosis: WHOOPING COUGH

Treatment: MEDICAL THERAPY

ICD-9: 032-033

CPT: 90000-99999

Line: 2 7 Category: 1

Diagnosis: PHENYLKETONURIA (PKU)

Treatment: MEDICAL THERAPY

ICD-9: 270.1

CPT: 90000-99999

Line: 2 8 Category: 4

Diagnosis: CONGENITAL HYPOTHYROIDISM

Treatment: MEDICAL THERAPY

I C D-9: 24 3

CPT: 90000-99999

Line: 2 9 Category: 4

Diagnosis: ACUTE OSTEOMYELITIS

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 730.0

CPT: 90000-99999

Line: 3 0 Category: 1

Diagnosis: DEEP OPEN WOUND OF NECK, INCLUDING LARYNX; FRACTURE OF LARYNX OR TRACHEA, OPEN

Treatment: REPAIR

ICD-9: 874,807.6

CPT: 12001-12007,13101,13131-50

Line: 3 1 Category: 1

Diagnosis: DISEASES OF PHARYNX INCLUDING RETROPHARYNGEAL ABSCESS

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 478.21-.22,478.2 4

CPT: 42700-42999,90000-99999

Line: 3 2 Category: 1

Diagnosis: PNEUMOTHORAX AND HEMOTHORAX

Treatment: TUBE THORACOSTOMY/THORACOTOMY, MEDICAL THERAPY

ICD-9: 512,860.2

CPT: 90000-99999,32020,32100,32500

Line: 3 3 Category: 1

Diagnosis: HYPOTENSION

Treatment: MEDICAL THERAPY

ICD-9: 458

CPT: 90000-99999

Line: 3 4 Category: 1

Diagnosis: FRACTURE OF SHAFT OF BONE, OPEN

Treatment: REDUCTION

ICD-9: 812.3,813.3,813.9,818. 1,821 .1,823.3,823.9

CPT: 245OO-15,255OO-25575,2561O-2562O, 27500-06,27750-58,27800-06

Line: 3 5 Category: 1

DIAGNOSIS: PERIPHERAL NERVE INJURY

Treatment: NEUROPLASTY

Line: 3 6 Category: 12
238 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: PYOGENIC ARTHRITIS

Treatment: MEDICAL AND SURGICAL TREATMENT

[CO-9: 711

Line: 3 7 Category: 1

Diagnosis: INTESTINAL OBSTRUCTION w/o MENTION OF HERNIA

Treatment: EXCISION

ICD-9: 560.0,560.2,560.8-.9

CPT: 44005,64020,44050,44110-30,44140-44

Line: 38 Category: 1

Diagnosis: PATENT DUCTUS ARTERIOSUS

Treatment: LIGATION

ICD-9: 747.0

CPT: 33820-22

Line: 3 9 Category: 2

Diagnosis: HEMATOLOGICAL DISORDERS OF FETUS AND NEWB0RN

Treatment: MEDICAL THERAPY

ICD-9: 776.0-.1,776. 3

CPT: 90000-99999

Line: 4 0 Category: 2

Diagnosis: CONDITIONS INVOLVING THE TEMPERATURE REGULATION OF NEWBORNS

Treatment: MEDICAL THERAPY

IcD-9: 778.2-. 4

CPT: 90000-99999

Line: 4 1 Category: 2

Diagnosis: BIRTH TRAUMA FOR BABY

Treatment: MEDICAL THERAPY

IcD-9: 7 6 7

CPT: 90000-99999

Line: 42 Category: 2

Diagnosis: HYPOCALCEMIA, HYPOMAGNESEMIA AND OTHER ENDOCRINE AND METABOLIC DISTURBANCES SPECIFIC TO THE FETUS AND

NEWBORN

Treatment: MEDICAL THERAPY

CPT: 36510,36660,90000-99999

Line: 4 3 Category: 2

Diagnosis: PERINATAL DISORDERS OF DIGESTIVE SYSTEM

Treatment: MEDICAL THERAPY

ICD-9: 777.1-.4

CPT: 90000-99999

Line: 4 4 Category: 2

Diagnosis: ANEMIA OF PREMATURITY OR TRANSIENT NEONATAL NEUTROPENIA

Treatment: MEDICAL THERAPY

IcD-9: 776.6-. 9

CPT: 90000-99999

Line: 4 5 Category: 2

Diagnosis: HYDROPS FETALIS

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 4 6 Category: 2

Diagnosis: ACUTE BACTERIAL MENINGITIS

Treatment: MEDICAL THERAPY

ICD-9: 024,027.0,036,32 0

CPT: 90000-99999

Line: 4 7 Category: 3

Diagnosis: HYPOTHERMIA

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 4 8 Category: 3
Appendix D-Prioritized Health Services List . 239

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: BURN, PARTIAL THICKNESS WITHOUT VITAL SITE, 1O-3O% OF BODY SURFACE

Treatment: FREE SKIN GRAFT, MEDICAL THERAPY

ICD-9: 941.26-.27,.36-.37,942.20- .24, .29- .34, .39,943.2- .3,944.20- .24,.26-.34, .36- .38,945.20-.21, .23- .31,.33-

.39,946.2- .3,948,949.2-.3

CPT: 11000, 11040-1,11960-70,14020, 14040-1,15000-15121,15200, 15220, 15240,15260,15350,15400, 15500-10,16000-

16035,35206,90000-99999

Line: 4 9 Category: 3

Diagnosis: ACUTE MYOCARDIAL INFARCTION

Treatment: MEDICAL THERAPY

ICD-9: 410

CPT: 90000-99999

Line: 5 0 Category: 3

Diagnosis: ACUTE PULMONARY HEART DISEASE AND PULMONARY EMBOLI

Treatment: MEDICAL THERAPY

ICD-9: 415

CPT: 90000-99999

Line: 5 1 Category: 3

Diagnosis: THYROTOXICOSIS WITH OR WITHOUT GOITER, ENDOCRINE EXOPHTHALMOS; CHRONIC THYROIDITIS

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 242,245. 1-.9,246.8,376.2

CPT: 60245,67440,67599-67622,90000-99999

Line: 5 2 Category: 5

Diagnosis: LIFE-THREATENING ARRHYTHMIAS

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 427.1 ,427.4- .5,746.86,996.01

CPT: 33200-33208,33212,33820,90000-99999

Line: 5 3 Category: 3

Diagnosis: FRACTURE OF RIBS AND STERNUM, OPEN

Treatment: STABILIZ E

ICD-9: 807.1,807. 3

CPT: 21805,21810,21825

Line: 5 4 Category: 1

Diagnosis: FATAL RICKETTSIAL AND OTHER ARTHROPOD-BORNE DISEASES

Treatment: MEDICAL THERAPY

ICD-9: 080-083,085.0,085.5,085 .9

CPT: 90000-99999

Line: 5 5 Category: 1

Diagnosis: POISONING BY INGESTION AND INJECTION

Treatment: MEDICAL THERAPY

ICD-9: 960.2-.5,961.0, .3- .9,962.0, .2-.8,963.0, .2- .9,964.5, .7-.8,965.5- .7,966,968.0,968.5- .7,969.6,970. 1,971.0-

.2,972.3,972.6,972.8,974.0- .4,974.7,975.0- .1,975.7,977.0,978-985

CPT: 43235-47,90000-99999

Line: 5 6 Category: 1

Diagnosis: PERITONSILLAR ABSCESS

Treatment: INCISION AND DRAINAGE OF ABSCESS, MEDICAL THERAPY

ICD-9: 475

CPT: 10160,42700,90000-99999

Line: 5 7 Category: 1

Diagnosis: RUPTURE BLADDER, NONTRAUMATIC

Treatment: CYSTORRHAPHY SUTURE

I C D-9: 596. 6

CPT: 51860-51865

Line: 5 8 Category: 1

Diagnosis: FRACTURE OF FACE BONES

Treatment: SURGERY

ICD-9: 802

CPT: 21310-37,21454-5,21461 ,21462, 21360,21365,21385-6, 21406, 21421 -22,2147O,3O14O,3O52O,3O62D,31O21

Line: 5 9 Category: 1
240 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: LIFE-THREATENING EPISTAXIS

Treatment: SEPTOPLASTY/REPAIR/CONTROL HEMORRHAGE

ICD-9: 784.7

CPT: 30520-30999

Line: 6 0 Category: 1

Diagnosis: ACUTE MASTOIDITIS

Treatment: MASTOIDECTOMY, MEDICAL THERAPY

ICD-9: 383.0

CPT: 69601-46,69670,90000-99999

Line: 6 1 Category: 1

Diagnosis: ACQUIRED DEFORMITY OF HEAD AND COMPOUND/DEPRESSED FRACTURES OF SKULL

Treatment: CRANIOTOMY/CRANIECTOMY

ICD-9: 738.0-.1,800,803,80 4

CPT: 21365,21395,61304-576,62000

Line: 6 2 Category: 1

Diagnosis: DISLOCATION OF ELBOW, HAND, ANKLE, FOOT, CLAVICLE AND SHOULDER, OPEN

Treatment: RELOCATION

ICD-9: 831 .04,831.1,832.1,833.1 ,834. 1,837.1,838.1

CPT: 23520-52,23650-80,24600-35,25660-95,26641 -715,27840-48

Line: 6 3 Category: 1

Diagnosis: SEPTICEMIA

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 6 4 Category: 1

Diagnosis: ERYSIPELAS

Treatment: MEDICAL THERAPY

ICD-9: 035

CPT: 90000-99999

Line: 6 5 Category: 1

Diagnosis: STEVENS-JOHNSON SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 695.1

CPT: 90000-99999,11100-11101

Line: 6 6 Category: 1

Diagnosis: DISORDERS OF BILE DUCT

Treatment: EXCISION, REPAIR

[CD-9: 576.4-. 9

CPT: 47420-60,47500-999

Line: 6 7 Category: 1

Diagnosis: RUPTURE LIVER

Treatment: SUTURE/REPAIR

ICD-9: 864.04

CPT: 47350,47360

Line: 6 8 Category: 1

Diagnosis: RESPIRATORY FAILURE

Treatment: MEDICAL THERAPY

ICD-9: 518.81

CPT: 31600,90000-99999

Line: 6 9 Category: 1

Diagnosis: LUNG CONTUSION OR LACERATION

Treatment: MEDICAL THERAPY

ICD-9: 861.21,861.31

CPT: 90000-99999

Line: 7 0 Category: 1

Diagnosis: TRANSPLACENTAL HEMORRHAGE

Treatment: MEDICAL THERAPY

ICD-9: 772.0,772.3- .4,776.5

CPT: ‘90000-99999

Line: 7 1 Category: 2
Appendix D-Prioritized Health Services List ● 241

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

NEONATAL THYROTOXICOSIS

MEDICAL THERAPY

775.3

90000-99999

72 Category: 2

DRUG REACTIONS & INTOXICATIONS SPECIFIC TO NEWBORN

MEDICAL THERAPY

779.4

90000-99999

73 Category: 2

NEONATAL MYASTHENIA GRAVIS

MEDICAL THERAPY

775.2

90000-99999

74 Category: 2

CLEFT PALATE WITH AIRWAY OBSTRUCTION, PIERRE ROBlN DEFORMITY

LIP-TONGUE SUTURE, MEDICAL THERAPY

749.0,519. 8

30140,30520,30620,41510,90000-99999

75 Category: 2

DRUG WITHDRAWAL SYNDROME IN NEWBORN

MEDICAL THERAPY

779.5

90000-99999

76 Category: 2

TOXIC EFFECT OF GASES, FUMES, AND VAPORS

HYPERBARIC OXYGEN

986-987

99180-99182

77 Category: 3

PHLEBITIS & THROMBOPHLEBITIS, DEEP

LIGATION AND DIVISION, MEDICAL THERAPY

451.0- .2,451.8

REWIRING HYPERBARIC OXYGEN

78 Category: 3

DISLOCATION KNEE & HIP, OPEN

RELOCATION

835.1 ,836.4,836.6

27250-55,27550-27557

79 Category: 3

EMPYEMA AND ABSCESS OF LUNG

MEDICAL AND SURGICAL TREATMENT

510,513. 0

9OOOO-99999,31622,32OOO-321OO

80 Category: 3

CERVICAL VERTEBRAL DISLOCATIONS, OPEN OR CLOSED; OTHER VERTEBRAL DISLOCATIONS, OPEN

REPAIR/RECONSTRUCTION

839.0-.1,839.3,839.5,839. 7

22315,22325-22327,22505,22590-22650,22840-22855

81 Category: 3

OPEN FRACTURE OF EPIPHYSIS OF LOWER EXTREMITIES

REDUCTION

820.11,821.3 2

27516-27519

82 Category: 3

SPINAL CORD INJURY WITHOUT EVIDENCE OF VERTEBRAL INJURY

MEDICAL THERAPY

952

90000-99999

83 Category: 3
242 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: ASPIRATION PNEUMONIA

Treatment: MEDICAL THERAPY

[CD-9: 507

CPT: 90000-99999,31645,31500

Line: 8 4 Category: 3

Diagnosis: ACUTE INFLAMMATION OF THE HEART DUE TO RHEUMATIC FEVER

Treatment: MEDICAL THERAPY

ICD-9: 391,392.0

CPT: 90000-99999

Line: 8 5 Category: 3

Diagnosis: FRACTURE AND OTHER INJURY OF CERVICAL VERTEBRA

Treatment: CERVICAL LAMINECTOMY, MEDICAL THERAPY

ICD-9: 806.0-806.1 ,805.0-805.1,952.0

Line: 8 6 Category: 3

Diagnosis: FRACTURE OF HIP, CLOSED

Treatment: REDUCTION

ICD-9: 820.00,820.02- .09,820.2,820.8

CPT: 27230-27232,27235-27240,27242-27248

Line: 8 7 Category: 3

Diagnosis: SUBARACHNOID AND INTERCEREBRAL HEMORRHAGE/HEMATOMA

Treatment: BURR HOLES, CRANIECTOMY/CRANIOTOMY

ICD-9: 430-432,852-85 3

Line: 8 8 Category: 3

Diagnosis: ACUTE PANCREATITIS

Treatment: MEDICAL THERAPY

ICD-9: 577.0

CPT: 90000-99999

Line: 8 9 Category: 3

Diagnosis: HYDATIDIFORM MOLE

Treatment: D & C, HYSTERECTOMY

ICD-9: 630

CPT: 58120,58150-200

Line: 9 0 Category: 1

Diagnosis: THROMBOCYTOPENIA

Treatment: MEDICAL THERAPY

ICD-9: 2 8 7

CPT: 90000-99999

Line: 91 Category: 1

Diagnosis: TOXIC EFFECT OF VENOM

Treatment: MEDICAL THERAPY

ICD-9: 989.5

CPT: 90000-99999

Line: 9 2 Category: 1

Diagnosis: CANCRUM ORIS

Treatment: MEDICAL THERAPY

ICD-9: 528.1

CPT: 90000-99999

Line: 9 3 Category: 1

Diagnosis: CANDIDIASIS OF LUNG, DISSEMINATED CANDIDIASIS, CANDIDAL ENDOCARDITIS AND MENINGITIS

Treatment: MEDICAL THERAPY

[co-9: 112.4-.5,112.81,112.8 3

CPT: 90000-99999

Line: 9 4 Category: 1

Diagnosis: MYOCARDITIS, PERICARDITIS AND ENDOCARDITIS

Treatment: MEDICAL THERAPY

ICD-9: 420-423

CPT: 90000-99999

Line: 9 5 Category: 1
Appendix D--Prioritized Health Services List ● 243

Diagnosis: RUPTURE

Treatment: SURGERY

ICD-9: 530.4

CPT: 43100-0

Line: 9 6

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

OF ESOPHAGUS

,43110-43235,43330-31

Category: 1

Diagnosis: TOXIC EPIDERMAL NECROLYSIS AND STAPHYLOCOCCAL SCALDED SKIN SYNDROME

Treatment: MEDICAL THERAPY

[CD-9: 695.1

CPT: 90000-99999,11100-11101

Line: 9 7 Category: 1

Diagnosis: CHOLERA, RAT-BITE FEVER AND TOXIC EFFECTS OF MUSHROOMS, FISH, BERRIES, ETC.

Treatment: MEDICAL THERAPY

ICD-9: 001,026,988

CPT: 90000-99999

Line: 9 8 Category: 1

Diagnosis: DELIRIUM: AMPHETAMINE, COCAINE, OR OTHER PSYCHOACTIVE SUBSTANCE

Treatment: MEDICAL THERAPY

ICD-9: 292.81,293.0 0

CPT: 90220

Line: 9 9 Category: 1

Diagnosis: INJURY TO BLOOD VESSELS OF THE THORACIC CAVITY

Treatment: REPAIR

ICD-9: 901

CPT: 37616

Line: 10 0 Category: 1

Diagnosis: NECROTIZING ENTEROCOLITIS IN FETUS OR NEWBORN AND PERINATAL INTESTINAL PERFORATION

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 777.5-. 6

CPT: 3651O,3666O,9OOOO-99999

Line: 10 1 Category: 2

Diagnosis: DISSEMINATED INTRAVASCULAR COAGULATION

Treatment: MEDICAL THERAPY

ICD-9: 286.6,776. 2

CPT: 90000-99999

Line: 10 2 Category: 2

Diagnosis: CEREBRAL DEPRESSION, COMA, & OTHER ABNORMAL CEREBRAL SIGNS OF NEWBORN

Treatment: MEDICAL THERAPY

ICD-9: 779.2

CPT: 3651O,3666O,9OOOO-99999

Line: 10 3 Category: 2

Diagnosis: TORSION OF OVARY

Treatment: OOPHORECTC+4Y, OVARIAN CYSTECTOMY

ICD-9: 620.5

CPT: 58925,58940-43,59120-26

Line: 10 4 Category: 1

Diagnosis: SPONTANEOUS ABORTION COMPLICATED BY INFECTION AND/OR HEMORRHAGE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 634.0-. 1

CPT: 59820-21,90000-99999

Line: 10 5 Category: 1

Diagnosis: OTHER RESPIRATORY CONDITIONS OF FETUS AND NEWBORN

Treatment: MEDICAL THERAPY

ICD-9: 770.0- .6,770.8-.9

CPT: 90000-99999

Line: 10 6 Category: 2

Diagnosls: OTHER NONINFECTIOUS GASTROENTERITIS AND COLITIS

Treatment: MEDICAL THERAPY

[CD-9: 558

CPT: 90000-99999

Line: 10 7 Category: 3
244 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: UNSPECIFIED DISEASES DUE TO MYCOBACTERIA, ACTINOMYCOTIC INFECTIONS, AND TOXOPLASMOSIS

Treatment: MEDICAL THERAPY

[CD-9: 031.9,039,13 0

CPT: 90000-99999

Line: 10 8 Category: 3

Diagnosis: BOTULISM

Treatment: MEDICAL THERAPY

ICD-9: 005.1

CPT: 90000-99999

Line: 10 9 Category: 3

Diagnosis: ABSCESS OF INTESTINE

Treatment: DRAIN ABSCESS, MEDICAL THERAPY

ICD-9: 569.5

CPT: 9OOOO-99999,45355,45386,4531O-45315

Line: 111 Category: 3

Diagnosis: ADULT RESPIRATORY DISTRESS SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 518.4-. 5

CPT: 90000-99999

Line: 11 2 Category: 3

Diagnosis: HERPETIC ENCEPHALITIS

Treatment: MEDICAL THERAPY

ICD-9: 054.3

CPT: 90000-99999

Line: 11 3 Category: 3

Diagnosis: ARTHROPOD-B0RNE VIRAL DISEASES

Treatment: MEDICAL THERAPY

ICD-9: 060-066

CPT: 90000-99999

Line: 11 4 Category: 3

Diagnosis: FRACTURE OF PELVIS, OPEN AND CLOSED

Treatment: REDUCTION

ICD-9: 808

CPT: 27033,27210-27225

Line: 11 6 Category: 3

Diagnosis: SUBACUTE MENINGITIS (EG. TUBERCULOSIS, CRYPTOCOCCOSIS)

Treatment: MEDICAL THERAPY

ICD-9: 013,054.72, 117.5,117.9,123. 1,130.8,321-322

CPT: 90000-99999

Line: 11 8 Category: 3
Appendix Prioritized Health Services List ● 245

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

CRUSH INJURIES: TRUNK, UPPER LIMBS, LOWER LIMB INCLUDING BLOOD VESSELS

SURGICAL TX

900,902,926. 11- .12,927.03,927.2- .9,927. 10,928,925,927.00,927.01

15220,24495,25020,25023,27600-27602,29105-29131 ,29240-29280,29345-29440, 29520-29580,37615-18

119 Category: 3

ACUTE GLOMERULONEPHRITIS AND OTHER ACUTE RENAL FAILURE

MEDICAL THERAPY INCLUDING DIALYSIS

580.0,580.8-.9,58 4

90000-99999

120 Category: 3

ACCIDENTS INVOLVING EXPOSURE TO NATURAL ELEMENTS (EG. LIGHTNING STRIKE, HEATSTROKE)

MEDICAL THERAPY

90000-99999

121 Category: 1

DISSECTING OR RUPTURED ANEURYSM

SURGICAL TREATMENT

441 .0-.1,441.3,441.5

33860-77,35081-103,35301 -11,35331-51,35450-515,35526-31 ,35536-52,35560-63,35601- 16,35626-46,35651,35663

122 Category: 1

ARTERIAL EMBOLISM/THROMBOSIS: ABDOMINAL AORTA, THORACIC AORTA

SURGICAL TREATMENT

444.0-.1,. 8

34101 ,34201,35081,35363,35381 ,35536-51

123 Category: 3

CONGENITAL ANOMALIES OF DIGESTIVE SYSTEM EXCLUDING NECROSIS

MEDICAL AND SURGICAL THERAPY

751

44050,45100,45120-21 ,46070,46080

124 Category: 2

CONVULSIONS AND OTHER CEREBRAL IRRITABILITY IN NEWBORN

MEDICAL THERAPY

779.0-. 1

90000-99999

125 Category: 2

ACUTE NECROSIS OF LIVER

MEDICAL THERAPY

570

90000-99999

126 Category: 3

MEDICAL THERAPY

114-118

90000-99999

127 Category: 3

INTRASPINAL AND INTRACRANIAL ABSCESS

MEDICAL AND SURGICAL TREATMENT

324

63172-63173,63266-63273,90000-99999

128 Category: 3

ANEURYSM OF PULMONARY ARTERY

SURGICAL TREATMENT

417.1

33910-33915

129 Category: 3

FLAIL CHEST

MEDICAL AND SURGICAL TREATMENT

807. 4

21800-25,90000-99999

130 Category: 3
246 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: SEVERE HEAD INJURY: HEMATOMA/EDEMA W/ MODERATE/PROLONGED LOSS OF CONSCIOUSNESS

Treatment: SURGICAL TREATMENT

ICD-9: 851 .03,851.13,851.83,851.93,851 .43,851 .53

CPT: 61108,61314-15,62140-41

Line: 131 Category: 3

Diagnosis: RUPTURE OF PAPILLARY MUSCLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 429.5-. 6

CPT: 33542,90000-99999

Line: 13 2 Category: 3

Diagnosis: ANAEROBIC INFECTIONS REQUIRING HYPERBARIC OXYGEN

Treatment: HYPERBARIC OXYGEN

ICD-9: 611.3,639.0,639.6,670.2,670.4,673.0, 709.3, 729.4, 785.4,958.0,996.52,996.6- .7,998.8,999.1

CPT: 99180-99182

Line: 13 3 Category: 3

Diagnosis: TRAUMATIC AMPUTATION OF ARM(S) & HAND(S) (COMPLETE)(PARTIAL) U & U/O COMPLICATION

Treatment: REPLANTATION/AMPUTATE

ICD-9: 887.0-.3,887.5-. 7

CPT: 20802,20804,20805,20806,23900,23920,23921 ,24900,24920,24925,24930,24931 ,24935,24940,25900-9

Line: 13 4 Category: 3

Diagnosis: ACUTE VASCULAR INSUFFICIENCY OF INTESTINE

Treatment: COLECTOMY

ICD-9: 557.0

CPT: 44140,44120-25,44141 ,44143,34151 ,34421,34451

Line: 13 5 Category: 3

Diagnosis: BURN, PARTIAL THICKNESS GREATER THAN 30% OF BODY SURFACE

Treatment: FREE SKIN GRAFT, MEDICAL THERAPY

ICD-9: 941.26-.27,942.20-.24, .29,943.2,944.20- .24,.26- .28,945.20- .21,.23-

.29,946.2,948.30, .40,.50,.60, .70, .80,.90,949.2

10, 15770,90200,16000-16035,35206,90000-99999

Line: 13 6 Category: 3

Diagnosis: ACUTE GLOMERULONEPHRITIS: WITH LESION OF RAPIDLY PROGRESSIVE GLOMERULONEPHRITIS

Treatment: MEDICAL THERAPY INCLUDING DIALYSIS

ICD-9: 580.4

CPT: 90000-99999

Line: 13 7 Category: 3

Diagnosis: IRON DEFICIENCY ANEMIA AND OTHER NUTRITIONAL DEFICIENCIES

Treatment: MEDICAL THERAPY

ICD-9: 260-268,269.0-.3,280

CPT: 90000-99999

Line: 138 Category: 5

Diagnosis: TETANUS NEONATORUM

Treatment: MEDICAL THERAPY

ICD-9: 771.3

CPT: 90000-99999

Line: 13 9 Category: 2

Diagnosis: TRAUMATIC AMPUTATION OF LEG(S) (COMPLETE)(PARTIAL) H/ & U/O COMPLICATION

Treatment: REPLANTATION/AMPUTATE

ICD-9: 897.0- .3,897.6-.7

Line: 14 0 Category: 3

Diagnosis: TRAUMATIC AMPUTATION OF FOOT/FEET (COMPLETE)(PARTIAL) w/ & w/o COMPLICATION

Treatment: REPLANTATION/AMPUTATE

ICD-9: 896,897.6-. 7

CPT: 20838, 20840,27888,28800-28805

Line: 141 Category: 3
Appendix D--Prioritized Health Services List ● 247

PRIORITIZED HEALTH SERVICES LIST OF NAY 1, 1991

Diagnosis: ALCOHOL WITHDRAWAL DELIRIUM; ALCOHOL HALLUCINOSIS; UNCOMPLICATED ALCOHOL WITHDRAWAL; WITHDRAWAL FROM

AMPHETAMINES, COCAINE, OPIOID, SEDATIVES, HYPNOTICS, ETC.

Treatment: MEDICAL THERAPY

ICD-9: 291.00,291.30,291.8 0

CPT: 90220,90844

Line: 14 2 Category: 1

Diagnosis: PREVENTIVE SERVICES, CHILDREN

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 14 3 Category: 4

Diagnosis: STREPTOCOCCAL SORE THROAT AND SCARLET FEVER

Treatment: MEDICAL THERAPY

ICD-9: 034

CPT: 90000-99999

Line: 14 4 Category: 1 0

Diagnosis: RHEUMATIC FEVER

Treatment: MEDICAL THERAPY

ICD-9: 390

CPT: 90000-99999

Line: 14 5 Category: 1 0

Diagnosis: CONGENITAL ANOMALIES OF UPPER ALIMENTARY TRACT, EXCLUDING TONGUE

Treatment: MEDICAL AND SURGICAL THERAPY

ICD-9: 750.2-. 9

CPT: 43300-52,90000-999$9

Line: 14 6 Category: 2

Diagnosis: HYPERTENSION AND HYPERTENSIVE DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 401,402.01

CPT: 90000-99999

Line: 14 7 Category: 5

Diagnosis: HYPERTENSIVE HEART AND RENAL DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 404

CPT: 90000-99999

Line: 14 8 Category: 5

Diagnosis: ACUTE AND SUBACUTE ISCHEMIC HEART DISEASE

Treatment: SURGICAL TREATMENT

ICD-9: 411.1,996.0 3

CPT: 92950-93799,33510-16,33210,33570

Line: 14 9 Category: 3

Diagnosis: DIABETES MELLITUS, TYPE I

Treatment: MEDICAL THERAPY

ICD-9: 250.01,250.1-250.3,250.6, 251 .3,775.1

CPT: 10060,10100,11000,11042, 11050-1,11400-2,11420,11 700-1,11710-1,11730,11740, 12001,17002,

69210,90000-99999

Line: 15 0 Category: 5

Diagnosis: ASTHMA

Treatment: MEDICAL THERAPY

ICD-9: 493

CPT: 90000-99999

Line: 151 Category: 5

Treatment: MEDICAL THERAPY

ICD-9: 531-535

CPT: 90000-99999

Line: 15 2 Category: 5
248 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: NON-INSULIN DEPENDENT DIABETES

Treatment: MEDICAL THERAPY

ICD-9: 250.00

CPT: 10060,10100,11000,11042, 11050-1 ,11600-2,11420,11700- 1, 11710-1, 11~0,11740,12001 ,17000-

2,17100, 17110,17200,17340,20550,20600-

Line: 15 3 Category: 5

Diagnosis: ACQUIRED HYPOTHYROIDISM, DYSHORMONOGENIC GOITER

Treatment: MEDICAL THERAPY

ICD-9: 244,246.1

CPT: 90000-99999

Line: 15 4 Category: 5

Diagnosis: CALCULUS OF BILE DUCT WITH OTHER CHOLECYSTITIS

Treatment: MEDICAL THERAPY

ICD-9: 574.4

CPT: 90000-99999

Line: 15 5 Category: 5

Diagnosis: PHYSICAL AND SEXUAL ABUSE INCLUDING RAPE

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 15 6 Category: 1

Diagnosis: GONOCOCCAL INFECTION OF EYE

Treatment: MEDICAL THERAPY

ICD-9: 098.4

CPT: 90000-99999

Line: 15 7 Category: 10

Diagnosis: HIV DISEASE INCLUDING ACQUIRED IMMUNODEFICIENCY SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 042.9,043.9,044. 9

CPT: 90000-99999

Line: 15 8 Category: 5

Diagnosis: EPILEPSY

Treatment: MEDICAL THERAPY

ICD-9: 345.1,345. 9

CPT: 90000-99999

Line: 15 9 Category: 5

Diagnosis: HEREDITARY HEMOLYTIC ANEMIAS (EG. SICKLE CELL)

Treatment: MEDICAL THERAPY

ICD-9: 282

CPT: 90000-99999

Line: 16 0 Category: 5

Diagnosis: STERILIZATIO N

Treatment: VASECTOMY

ICD-9: v25. 2

CPT: 55250

Line: 161 Category: 6

Diagnosis: STERILIZATION

Treatment: TUBAL LIGATION

[CD-9: v25.2

CPT: 58600-11

Line: 162 Category: 6

Diagnosis: BIRTH CONTROL

Treatment: CONTRACEPTION MANAGEMENT

ICD-9: v25.O-.1,V25.4-.9

CPT: 90000-99999

Line: 16 3 Category: 6
Appendix D-Prioritized Health Services List . 249

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: IMMINENT DEATH REGARDLESS OF DIAGNOSIS

Treatment: COMFORT CARE

ICD-9: o

CPT: 90000-99999

Line: 16 4 Category: 7

Diagnosis: DENTAL SERVICES (EG. INFECTIONS)

Treatment: RESTORATIVE DENTAL SERVICE

[CD-9: O

CPT: 00415,00501,01550,02910, 02920,02940,03110,03120, 03220,03310,03320,03330, D3340,03350,05410-

1,05420,05510,05951,06930,071 10,07210,07440-1,07510,07S20,07910- 12,07990,09110

Line: 16 5 Category: 1 0

Diagnosis: PREVENTIVE DENTAL SERVICES

Treatment: CLEANING AND FLUORIDE

ICD-9: V72.2

CPT: 00502,00999,01201,01203,01330,01351 ,O593l-5,O5952-3,O5956-7,O5982,O59W,O726O,O749O,O794O-9,O7955 ,09610

Line: 16 6 Category: 8

Diagnosis: PREVENTIVE SERVICES FOR ADULTS WITH PROVEN EFFECTIVENESS

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 16 7 Category: 9

Diagnosis: SOMATIC MEDICINE

Treatment: MEDICAL THERAPY

ICD-9: V70.4

CPT: 90000-99999

Line: 16 8 Category: 5

Diagnosis: CANCER OF CERVIX, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 180

Line: 16 9 Category: 5

Diagnosis: GONOCOCCAL INFECTIONS AND OTHER VENEREAL DISEASES

Treatment: MEDICAL THERAPY

ICD-9: 098,099.O-099.2,099.4-O99.9

CPT: 90000-99999

Line: 17 0 Category: 1 0

Diagnosis: DYSPLASIA OF CERVIX AND CERVICAL CARCINOMA IN SITU

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 078.1 ,233. 1,622.0-.2,623.0- .1,623.4,623.7,795.0

105,57150,57180,57400,57454,57510-20,90000-99999

Line: 171 Category: 5

Diagnosis: CANCER OF BREAST, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 174-175,198.2,233.0,238.3, 239.2

CPT: 11200, 11401-02,11623,11%0-70, 13132, 133OO,1572O,171OO, 17200, 17999,19120,19160-240, 19316-

10,58960,62256,90000-99999

Line: 17 2 Category: 5

Diagnosis: UNDESCENDED TESTICLE

Treatment: ORCHIECTOMY, REPAIR

ICD-9: 752.5

CPT: 54520-54565,54300-440

Line: 17 3 Category: 5

Diagnosis: CANCER OF TESTIS, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 186,236.4

Line: 17 4 Category: 5

328-308 0 - 92 - 9
250 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: COARCTATION OF THE AORTA

Treatment: SURGICAL/EXCISION

ICD-9: 747.10

CPT: 33840-33851

Line: 17 5 Category: 5

Diagnosis: PYODERMA

Treatment: MEDICAL THERAPY

ICD-9: 686.0-.1

CPT: 90000-99999

Line: 176 Category: 3

Diagnosis: ANGINA PECTORIS; OTHER FORMS OF CHRONIC ISCHEMIC HEART DISEASE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 412-414,996.0 3

Line: 17 7 Category: 5

Diagnosis: CANCER OF ENDOCRINE SYSTEM, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 164.0, 193-194, 198.7,234.8,237.0- .4,239.7

CPT: 11050-51 ,11600-46,12042,13132, 14060, 17000-1,17100,17340,31505,69081 ,21632,32095-100,32480-90,32480-

Line: 17 8 Category: 5

Diagnosis: CANCER OF OVARY, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

[CO-9: 183.0,198.6,236. 2

85,90000-99999

Line: 17 9 Category: 5

Diagnosis: ADDISON’S DISEASE

Treatment: MEDICAL THERAPY

[CO-9: 255.4,255. 5

CPT: 90000-99999

Line: 18 0 Category: 5

Diagnosis: CONSTITUTIONAL APLASTIC ANEMIA

Treatment: MEDICAL THERAPY

ICD-9: 284.0

CPT: 90000-99999

Line: 181 Category: 5

Diagnosis: CORONARY ARTERY ANOMALY

Treatment: ANOMALOUS CORONARY ARTERY LIGATION

ICD-9: 746.85

CPT: 33502

Line: 18 2 Category: 2

Diagnosis: CONGENITAL ANOMALIES OF URINARY SYSTEM

Treatment: RECONSTRUCTION

ICD-9: 753.0-.1,753.3-. 9

CPT: 55899

Line: 18 3 Category: 5

Diagnosis: TOTAL ANOMALOUS PULMONARY VENOUS CONNECTION

Treatment: COMPLETE REPAIR

ICD-9: 747.41

CPT: 33730

Line: 18 4 Category: 2

Diagnosis: ULCERS, GI HEMORRHAGE

Treatment: HEMIGASTRECTOMY

ICD-9: 531-534,578

CPT: 43204,43610-41,43825-40

Line: 18 5 Category: 5
Appendix D--Prioritized Health Services List . 251

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: CANCER OF UTERUS, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 179,182,236. 0

Line: 18 6 Category: 5

Diagnosis: COAGULATION DEFECTS

Treatment: MEDICAL THERAPY

ICD-9: 286.0-.5, .7-. 9

CPT: 90000-99999

Line: 18 7 Category: 5

Diagnosis: COMMON TRUNCUS

Treatment: TOTAL REPAIR/REPLANT ARTERY

ICD-9: 745.0

CPT: 33786,33788

Line: 18 8 Category: 5

Diagnosis: HODGKIN’S DISEASE

Treatment: CHEMOTHERAPY, RADIATION THERAPY

ICD-9: 201

CPT: 38100,49000,49200,49220,90000-99999

Line: 18 9 Category: 5

Diagnosis: CONGENITAL STENOSIS AND INSUFFICIENCY OF AORTIC VALVE

Treatment: SURGICAL VALVE REPLACEMENT

ICD-9: 746.3-. 4

CPT: 33405-33417

Line: 19 0 Category: 5

Diagnosis: ACQUIRED HEMOLYTIC ANEMIAS

Treatment: MEDICAL THERAPY

ICD-9: 283

CPT: 90000-99999

Line: 191 Category: 5

Diagnosis: BULBUS CORDIS ANOMALIES & ANOMALIES OF CARDIAC SEPTAL CLOSURE: DOUBLE OUTLET RIGHT VENTRICLE

Treatment: SHUNr

ICD-9: 745.11

CPT: 33750-33766

Line: 19 2 Category: 2

Diagnosis: CONGENITAL PULMONARY VALVE ATRESIA

Treatment: SHUNT

ICD-9: 746.01

CPT: 33750-33766

Line: 19 3 Category: 5

Diagnosis: NON-DISSECTING ANEURYSM WITHOUT RUPTURE

Treatment: SURGICAL TREATMENT

ICD-9: 441.2,441.4,441.9,44 2

CPT: 33860-77,35081-103,35188, 35301 - 11 ,35331 -51 ,35450-515,35526-31 ,35536-52,35560-63,35601 -16,35626-

66,35651 ,35663,37618,61532,61700,61712

Line: 19 4 Category: 5

Diagnosis: PITUITARY DISORDERS: PANHYPOPITUITARISM, IATROGENIC AND OTHER

Treatment: MEDICAL THERAPY

ICD-9: 253.2,253.4,253.7, 253.8

CPT: 90000-99999

Line: 19 5 Category: 5

Diagnosis: OTHER AND UNSPECIFIED TYPE ENDOCARDIAL CUSHION DEFECTS

Treatment: REPAIR ATRIOVENTRICULAR

ICD-9: 745.60,745.69,745.8,745. 9

CPT: 33670

Line: 19 6 Category: 5

Diagnosis: INTERRUPTED AORTIC ARCH

Treatment: TRANSVERSE ARCH GRAFT

ICD-9: 747.11

CPT: 33870

Line: 19 7 Category: 2
252 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: HEREDITARY FRUCTOSE INTOLERANCE, INTESTINAL DISACCHARIDASE AND OTHER DEFICIENCIES

Treatment: MEDICAL THERAPY

ICD-9: 271 .2-.9

CPT: 90000-99999

Line: 19 8 Category: 5

Diagnosis: CONGENITAL TRICUSPID ATRESIA AND STENOSIS

Treatment: REPAIR

ICD-9: 746.1

CPT: 33649

Line: 19 9 Category: 5

Treatment: AV REPLACEMENT, VAL VtM@PLA$~, MEDICAL THERAPY

Line: 2 0 0 Category: 5

— S87.12 Pet Capita Cost Pet Month _

Diagnosis: CONGENITAL MITRAL VALVE STENOSIS

Treatment: MITRAL VALUE REPLACEMENT

ICD-9: 746.5

CPT: 33420-33430

Line: 201 Category: 2

Diagnosis: DISEASES OF MITRAL VALVE

Treatment: VALVULOPLASTY, MV REPLACE, MEDICAL THERAPY

ICD-9: 394,424.0,996.0 2

Line: 20 2 Category: 5

Diagnosis: ADRENOGENITAL DISORDERS

Treatment: MEDICAL THERAPY

[co-9: 255. 2

CPT: 90000-99999,50700

Line: 20 3 Category: 5

Diagnosis: CANCER OF VAGINA, VULVA AND OTHER FEMALE GENITAL ORGANS, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 181, 183.2-.9,184,236.1,236.3

58240,58260,58720,58960,90000-99999

Line: 20 4 Category: 5

Diagnosis: CANCER OF URINARY SYSTEM, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 188-189, 198.0-.1,233.7,236.7,236.9,239.4

60,51530,51550-97,51700,51720,52234-40,52281 ,52500,53670,53220,63277,90000-99999

Line: 20 5 Category: 5

Diagnosis: CANCER OF EYE & ORBIT, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 190,234.0,238. 8

Line: 20 6 Category: 5

Diagnosis: CANCER OF SOFT TISSUE, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 164.1,171,238.1

28043-46,32522,90000-99999

Line: 20 7 Category: 5

Diagnosis: ARTERIAL ANEURYSM OF NECK

Treatment: REPAIR

ICD-9: 442.81-.8 2

Line: 20 8 Category: 5
Appendix D-Prioritized Health Services List . 253

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: HODGKI N

I

S DISEASE

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

ICD-9: 201

CPT: 38230-41

Line: 20 9 Category: 5

Diagnosis: TETRALOGY OF FALLOT (TOF)

Treatment: TOTAL REPAIR TETRALOGY

[CD-9: 745.2

CPT: 33692-33696

Line: 21 0 Category: 5

Diagnosis: COMPLETE , CORRECTED AND OTHER TGA

Treatment: TRANSPOSITION OF VESSELS

[CD-9: 745.10,745.12,745.1 9

CPT: 33782-33784

Line: 21 1 Category: 2

Diagnosis: CONGENITAL CYSTIC LUNG - MILD AND MODERATE

Treatment: LUNG RESECTION

[co-9: 748. 4

CPT: 32500

Line: 21 2 Category: 5

Diagnosis: CHRONIC HEPATITIS

Treatment: MEDICAL THERAPY

ICD-9: 571.4,571.8-. 9

CPT: 90000-99999

Line: 21 3 Category: 5

Diagnosis: OTHER SPECIFIED APLASTIC ANEMIAS

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

ICD-9: 284.8

CPT: 38240

Line: 21 4 Category: 5

Diagnosis: CANCER OF PENIS AND OTHER MALE GENITAL ORGAN, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 187,233.5

Line: 21 5 Category: 5

Diagnosis: BENIGN NEOPLASM OF THE BRAIN

Treatment: CRANIOTOMY/CRANIECTOMY

ICD-9: 225.0

CPT: 61304-61576,61712,62223,63276

Line: 21 6 Category: 5

Diagnosis: INFECTIOUS SKIN CONDITIONS

Treatment: MEDICAL THERAPY

ICD-9: 526.4,706.2,737.32,757.39,757. 9

Line: 21 7 Category: 5

Diagnosis: HEARING LOSS - AGE 3 OR UNDER

Treatment: MEDICAL THERAPY

ICD-9: 388-389

CPT: 90000-99999

Line: 21 8 Category: 4

Diagnosis: URETERAL CALCULUS

ICD-9: 592.1

CPT: 50392,50561 ,50951-80,52320,52325,52332, 52335-36,53020,90000-99999

Line: 21 9 Category: 5

Diagnosis: BENIGN CEREBRAL CYSTS

Treatment: DRAINAGE

ICD-9: 348.0,349. 2

CPT: 61120-61152,61314-61315,61522-61524,61680-61712

Line: 22 0 Category: 5
254 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

CANCER OF BONES, TREATABLE

MEDICAL AND SURGICAL TREATMENT

170, 198.5,238.0,239.2

25,32500,60252-54,60500-605,63276,90000-99999

221 Category: 5

AMEBIASIS

MEDICAL THERAPY

006.0-.1,006. 9

90000-99999

222 Category: 1 0

LIVER ABSCESS AND SEQUELAE OF CHRONIC LIVER DISEASE

MEDICAL THERAPY

572.0-. 2

90000-99999

223 Category: 5

MEDICAL THERAPY

694.4-.9

90000-99999

224 Category: 5

INTESTINAL MALABSORPTION

MEDICAL THERAPY

579

90000-99999

225 Category: 5

ACROMEGALY & GIGANTISM, OTHER & UNSPECIFIED ANTERIOR PITUITARY HYPERFUNCTION, BENIGN NEOPLASM OF THYROID

GLANDS & OTHER ENDOCRINE GLANDS

MEDICAL AND SURGICAL TREATMENT

226 Category: 5

MALIGNANT MELANOMA OF SKIN, TREATABLE

MEDICAL AND SURGICAL TREATMENT

172,238.2,239.2

95,54135,55842-45,90000-99999

227 Category: 5

PARALYTIC ILEUS

MEDICAL THERAPY

560.1

90000-99999

228 Category: 5

URETERAL STRICTURE OR OBSTRUCTION

OPEN RESECTION, PERCUTANEOUS NEPHROSTOLITHOTOMY, NEPHROLITHOTOMY, LITHOTRIPSY

593.3-.4

50060-81 ,50700-16,50590,52276

229 Category: 5

TREATABLE DEMENTIA

MEDICAL THERAPY

291 .2,290.40,292.82,293.9,294.8

90000-99999

230 Category: 5

CHRONIC OSTEOMYELITIS

INCISION & DRAINAGE

730.1-.2

1,27607,28005,27360,27640- 1,28120-4

231 Category: 5
Appendix D-Prioritized Health Services List . 255

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: CHRONIC PYELONEPHRITIS

Treatment: MEDICAL THERAPY

ICD-9: 590.0

CPT: 90000-99999

Line: 23 2 Category: 5

Diagnosis: TORSION OF TESTIS

Treatment: ORCHIECTOMY, REPAIR

ICD-9: 608.2

Line: 2 3 3 Category: 10

Diagnosis: LEUKOPLAKIA OF CERVIX, DYSTROPHY OF VULVA

Treatment: MEDICAL THERAPY

[co-9: 622.2,624. 0

CPT: 90000-99999

Line: 23 4 Category: 5

Diagnosis: CANCER OF LUNG, BRONCHUS, PLEURA, TRACHEA, MEDIASTINUM & OTHER RESPIRATORY ORGANS, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

21,66984,69433,90000-99999

Line: 23 5 Category: 5

Diagnosis: ACUTE LYMPHOCYTIC LEUKEMIA (CHILD)

Treatment: CHEMOTHERAPY, RADIATION THERAPY

ICD-9: 204.0

CPT: 90000-99999

Line: 23 6 Category: 5

Diagnosis: DISORDERS OF AMINO-ACID TRANSPORT AND METABOLISM (NON PKU)

Treatment: MEDICAL THERAPY

ICD-9: 270.0,270.2-270. 9

CPT: 90000-99999

Line: 23 7 Category: 5

Diagnosis: PNEUMOCYSTIS CARINII PNEUMONIA

Treatment: MEDICAL THERAPY

ICD-9: 136.3

CPT: 90000-99999

Line: 23 8 Category: 5

Diagnosis: NON-HODGKIN’S LYMPHOMAS

Treatment: CHEMOTHERAPY, RADIATION THERAPY

Line: 23 9 Category: 5

Diagnosls: CANCER OF STOMACH, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

Line: 24 0 Category: 5

Diagnosis: DISORDERS OF THYROCALCITONIN SECRETION

Treatment: THYROIDECTOMY

ICD-9: 246.0

CPT: 60240

Line: 241 Category: 5

Diagnosis: AORTIC PULMONARY FISTULA

Treatment: REPAIR SINUS OF VALSALVA

ICD-9: 417.0

CPT: 33702-33710

Line: 24 2 Category: 5
256 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: POLYARTERITIS NODOSA AND ALLIED CONDITIONS

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 24 3 Category: 5

Diagnosis: MYELOID, MONOCYTIC, ACUTE LYMPHOCYTIC AND OTHER SPECIFIED LEUKEMIAS

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

CPT: 38230-41

Line: 24 4 Category: 5

Diagnosis: CANCER OF COLON, RECTUM, SMALL INTESTINE AND ANUS, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

Line: 24 5 Category: 5

Diagnosis: CARDIOMYOPATHY, HYPERTROPHIC MUSCLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 425

Line: 24 6 Category: 5

Diagnosis: PERNICIOUS ANEMIA

Treatment: MEDICAL THERAPY

ICD-9: 281

CPT: 90OO0-99999

Line: 24 7 Category: 5

Diagnosis: CYSTIC FIBROSIS

Treatment: MEDICAL THERAPY

ICD-9: 277. 0

CPT: 90000-99999

Line: 248 Category: 5

Diagnosis: AGRANULOCYTOSIS

Treatment: BONE MARROW TRANSPLANTATION (5-6 LOCI MATCH)

ICD-9: 288.0

CPT: 38240

Line: 24 9 Category: 5

Diagnosis: ATRIAL SEPTAL DEFECT, SECUNDUM

Treatment: REPAIR SEPTAL DEFECT

ICD-9: 745.5

CPT: 33640-33643

Line: 250 Category: 5

Diagnosis: ATRIAL SEPTAL DEFECT, PRIMUM

Treatment: REPAIR SEPTAL DEFECT

ICD-9: 745.61

CPT: 33640

Line: 251 Category: 5

Diagnosis: STROKE

Treatment: MEDICAL THERAPY

[CD-9: 434,436

CPT: 90000-99999

Line: 25 2 Category: 3

Diagnosis: GANGRENE; ATHEROSCLEROSIS OF ARTERIES OF EXTREMITIES, DIABETES MELLITUS w/PERIPHERAL CIRCULATORY DISORDER,

CHRONIC ULCER OF SKIN, GAS GANGRENE, OTHER PERIPHERAL VASCULAR DISEASE

Treatment: AMPUTATlON

Line: 25 3 Category: 5
Appendix Prioritized Health Services List ● 257

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

BUDD-CHIARI SYNDROME, AND OTHER VENOUS EMBOLISM AND THROMBOSIS

THROMBECTOMY/LIGATION

453

254 Category: 5

OPPORTUNISTIC INFECTIONS IN lMMUNOCOMPROMISED HOSTS

MEDICAL THERAPY

90000-99999

255 Category:

VENTRICULAR SEPTAL DEFECT

CLOSURE

745.4,745. 7

33681-33688

256 Category:

CANCER OF SKIN, EXCLUDING

5

— S92.1O Per Capita Cost Per Month _

5

MALIGNANT MELANOMA, TREATABLE

MEDICAL AND SURGICAL TREATMENT

173,198.2

6,38500-780,51575-95,54135,55842-45,90000-99999

257 Category: 5

CANCER OF PROSTATE GLAND, TREATABLE

MEDICAL AND SURGICAL TREATMENT

185,233.4,236.5

258 Category: 5

HEART FAILURE

MEDICAL THERAPY

428

90000-99999

259 Category: 5

APLASTIC ANEMIAS DUE TO DISEASE OR TREATMENT

MEDICAL THERAPY

284. 8

90000-99999

260 Category: 5

ULCERATION OF INTESTINE

COLECTOMY, ENTEROSTOMY

569.82

44150-60,64300-16,45385

261 Category: 5

CANCER OF RETROPERITONEUM, PERITONEUM, OMENTUM & MESENTERY, TREATABLE

MEDICAL AND SURGICAL TREATMENT

158, 197.6,197.8,235.5

31300,31540- 1,32100,39200,42415,45333,46917, 21044-45,30117-18,30500,32900,39010,40810- 16,41116,41135,41150-

55,42104-20,42842-45,42880,49081 ,90000-99999

262 Category: 5

EBSTEIN’S ANOMALY

REPAIR SEPTAL DEFECT

746.2

33640-33647

263 Category: 5

DISEASES OF WHITE BLOOD CELLS

MEDICAL THERAPY

288.1-. 9

90000-99999

264 Category: 5
258 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: CANCER OF ORAL CAVITY, PHARYNX, NOSE AND LARYNX, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

Line: 26 5 Category: 5

Diagnosis: BENIGN NEOPLASM OF ISLETS OF LANGERHANS

Treatment: EXCISION OF TUMOR

ICD-9: 211.7

CPT: 60699

Line: 26 6 Category: 5

Diagnosis: PREMALIGNANT LESIONS AND CARCINOMA IN SITU OF SKIN

Treatment: DESTRUCT/EXCISION/MEDICAL THERAPY

ICD-9: 232,702

Line: 26 7 Category: 5

Diagnosis: ADRENAL OR CUTANEOUS HEMORRHAGE OF FETUS OR NEONATE

Treatment: MEDICAL THERAPY

ICD-9: 772.5-. 9

CPT: 90000-99999

Line: 26 8 Category: 2

Diagnosis: SIALOADENITIS, ABSCESS, FISTULA OF SALIVARY GLANDS

Treatment: SURGERY

ICD-9: 527.2-. 4

Line: 26 9 Category: 5

Diagnosis: LIPIDOSES AND OTHER DISORDERS OF METABOLISM

Treatment: MEDICAL THERAPY

ICD-9: 272,277.1,277.5,277.9,330. 1

CPT: 90000-99999

Line: 27 0 Category: 5

Diagnosis: LEUKOPLAKIA OF ORAL MUCOSA, INCLUDING TONGUE

Treatment: INCISION/EXCISION TONGUE, BIOPSY

ICD-9: 528.6

CPT: 41OOO-41599

Line: 271 Category: 5

Diagnosis: MALARIA AND RELAPSING FEVER

Treatment: MEDICAL THERAPY

ICD-9: 084,087

CPT: 90000-99999

Line: 27 2 Category: 1

Diagnosis: REGIONAL ENTERITIS, IDIOPATHIC PROCTOCOLITIS

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 555,556

Line: 27 3 Category: 5

Diagnosis: CONGENITAL PULMONARY VALVE STENOSIS

Treatment: PULMONARY VALVE REPAIR

ICD-9: 746.02

CPT: 33470-33471

Line: 27 4 Category: 2

Diagnosis: URETERAL FISTULA (INTESTINAL)

Treatment: NEPHROSTOMY

ICD-9: 593.82

Line: 27 5 Category: 5
Appendix D--Prioritized Health Services List . 259

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: DISORDERS OF ARTERIES, VISCERAL

Treatment: BYPASS GRAFT

ICD-9: 447.08447.2-. 9

Line: 27 6 Category: 5

Diagnosis: DISEASES OF ENDOCARDIUM

Treatment: MEDICAL THERAPY

ICD-9: 424

CPT: 90000-99999

Line: 27 7 Category: 5

Diagnosis: CHRONIC LEUKEMIAS

Treatment: CHEMOTHERAPY, RADIATION THERAPY

Line: 27 8 Category: 5

Diagnosis: CYSTICERCOSIS, OTHER CESTODE INFECTION, TRICHINOSIS

Treatment: MEDICAL THERAPY

ICD-9: 123.1-.9,12 4

CPT: 90000-99999

Line: 27 9 Category: 5

Diagnosis: LEPTOSPIROSIS

Treatment: MEDICAL THERAPY

ICD-9: 100

CPT: 90000-99999

Line: 28 0 Category: 1

Diagnosis: ENCEPHALOCELE; CONGENITAL HYDROCEPHALUS

Treatment: SHUNT

ICD-9: 742.0,742. 3

CPT: 62180-62258

Line: 281 Category: 2

Diagnosis: ANAL AND RECTAL POLYP

Treatment: EXCISION OF POLYP

ICD-9: 569.0

CPT: 45310,45333,45170

Line: 28 2 Category: 5

Diagnosis: BENIGN NEOPLASMS OF DIGESTIVE SYSTEM

Treatment: SURGICAL TREATMENT

5,46500,46610

Line: 28 3 Category: 11

Diagnosis: DIABETES INSIPIDUS

Treatment: MEDICAL THERAPY

ICD-9: 253.5

CPT: 90000-99999

Line: 28 4 Category: 5

Diagnosis: DISORDERS OF PLASMA PROTEIN METABOLISM

Treatment: MEDICAL THERAPY

ICD-9: 273

CPT: 90000-99999

Line: 28 5 Category: 5

Diagnosis: CUSHINGI

S SYNDROME; HYPERALDOSTERONISM, OTHER CORTICOADRENAL OVERACTIVITY, MEDULLOADRENAL HYPERFUNCTION

Treatment: MEDICAL THERAPY/ADRENALECTOMY

ICD-9: 255.0,255. 1,255.3,255.6

Line: 28 6 Category: 5
260 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF NAY 1, 1991

Diagnosis: DISORDERS OF PANCREATIC ENDOCRINE SECRETION

Treatment: MEDICAL THERAPY

ICD-9: 251 .4-.9

CPT: 90000-99999,48155

Line: 28 7 Category: 1 3

Diagnosis: GUILLAIN-BARRE SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 357.0

CPT: 90000-99999

Line: 28 8 Category: 3

Diagnosis: LEUKOPLAKIA OF ORAL MUCOSA, INCLUDING TONGUE

Treatment: MEDICAL THERAPY

ICD-9: 528.6

CPT: 90000-99999

Line: 28 9 Category: 5

Diagnosis: HEREDITARY ANGIONEUROTIC EDEMA

Treatment: MEDICAL THERAPY

ICD-9: 277.6

CPT: 90000-99999

Line: 29 0 Category: 5

Diagnosis: METASTATIC INFECTIONS WITH LOCALIZED SITES

Treatment: MEDICAL THERAPY

ICD-9: 003.2,006.3- .9,014-018,022. 1

CPT: 90000-99999

Line: 291 Category: 5

Diagnosis: CHRONIC RESPIRATORY DISEASE ARISING IN THE NEONATAL PERIOD

Treatment: MEDICAL THERAPY

ICD-9: 770.7

CPT: 90000-99999

Line: 29 2 Category: 5

Diagnosis: NON LIFE-THREATENING ARRHYTHMIAS

Treatment: MEDICAL THERAPY, PACEMAKER

Line: 29 3 Category: 5

Diagnosis: LYMPHOID LEUKEMIA

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

ICD-9: 204.1-. 9

CPT: 38240

Line: 29 4 Category: 5

Diagnosis: SYSTEMIC LUPIS EQYTHEMATOSUS, OTHER DIFFUSE DISEASES OF CONNECTIVE TISSUE

Treatment: MEDICAL THERAPY

ICD-9: 710.0,710.8,710. 9

CPT: 90000-99999

Line: 29 5 Category: 5

Diagnosis: HYPOPLASIA AND DYSPLASIA OF LUNG

Treatment: MEDICAL THERAPY

ICD-9: 748.5

CPT: 90000-99$99

Line: 29 6 Category: 2

Diagnosis: PORTAL VEIN THROMBOSIS

Treatment: SHUNT

[CD-9: 452

CPT: 37140,49625

Line: 29 7 Category: 5

Diagnosis: TETANUS

Treatment: MEDICAL THERAPY

[CD-9: 037

CPT: 90000-99999

Line: 29 8 Category: 1
Appendix D-Prioritized Health Services List ● 261

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: VESICOURETERAL REFLUX

Treatment: MEDICAL THERAPY, REPLANTATION

ICD-9: 593.7

CPT: 90000-99999

Line: 29 9 Category: 5

Diagnosis: CONGENITAL HYDRONEPHROSIS

Treatment: NEPHRECTOMY/REPAIR

ICD-9: 753.2

CPT: 50230,50400-504

Line: 30 0 Category: 5

Diagnosis: DISORDERS OF PARATHYROID GLAND; BENIGN NEOPLASM OF PARATHYROID GLAND

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 227.1,252

CPT: 60500-05,90000-99999

Line: 301 Category: 5

Diagnosis: PULMONARY FIBROSIS

Treatment: MEDICAL THERAPY

ICD-9: 515-517

CPT: 90000-99999

Line: 30 2 Category: 5

Diagnosis: INTRACEREBRAL HEMORRHAGE

Treatment: MEDICAL THERAPY

ICD-9: 431

CPT: 90000-99999

Line: 30 3 Category: 3

Diagnosis: COARCTATION OF THE AORTA

Treatment: BALLOON DILATION - VALVE REPLACEMENT

ICD-9: 747.10

CPT: 33405-33417

Line: 30 4 Category: 5

Diagnosis: LEPROSY

Treatment: MEDICAL THERAPY

ICD-9: 030

CPT: 90000-99999

Line: 30 5 Category: 5

Diagnosis: CHRONIC OBSTRUCTIVE PULMONARY DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 492,496

CPT: 90000-99999

Line: 30 6 Category: 5

Diagnosis: CONSTITUTIONAL APLASTIC ANEMIAS

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

ICD-9: 284.0

CPT: 38240

Line: 30 7 Category: 5

Diagnosis: ACUTE LYMPHOCYTIC LEUKEMIAS (ADULT) AND MULTIPLE MYELOMA

Treatment: CHEMOTHERAPY, RADIATION THERAPY

ICD-9: 204.0,203.0,203. 8

CPT: 45360,90000-99999

Line: 3 0 8 Category: 5

Diagnosis: DISORDERS RELATING TO LONG GESTATION AND HIGH BIRTHWEIGHT

Treatment: MEDICAL THERAPY

ICD-9: 766

CPT: 90000-99999

Line: 30 9 Category: 2
262 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: NEPHROTIC SYNDROME AND OTHER CHRONIC RENAL FAILUR E

Treatment: MEDICAL THERAPY INCLUDING DIALYSIS

CPT: 90000-99999

Line: 31 0 Category: 5

— $98.51 Pm CqdWCo8tPw#onttt —

Diagnosis: ACUTE NON-LYMPHOCYTIC LEUKEMIAS

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

ICD-9: 205.0, 206.0,207.0,208.0

CPT: 38230-41

Line: 311 Category: 5

Diagnosis: END STAGE RENAL DISEASE

Treatment: RENAL TRANSPLANT

ICD-9: 583.8-. 9

CPT: 50360

Line: 31 2 Category: 5

Diagnosis: OTHER ANEURYSM OF ARTERY, PERIPHERAL

Treatment: SURGICAL TREATMENT

ICD-9: 442.0,462.3,442. 9

21.35141-62

Line: 31 3 Category: 5

Diagnosis: DISORDERS MINERAL METABOLISM

Treatment: MEDICAL THERAPY

ICD-9: 275

CPT: 90000-99999

Line: 31 4 Category: 5

Diagnosis: NEONATAL CONJUNCTIVITIS, DACRYOCYSTITIS AND CANDIDA INFECTION

Treatment: MEDICAL THERAPY

ICD-9: 771.6-. 7

CPT: 90000-99999

Line: 31 5 Category: 2

Diagnosis: ESOPHAGEAL VARICES

Treatment: MEDICAL THERAPY/SHUNT/SCLEROTHERAPY

ICD-9: 456.0-. 2

Line: 31 6 Category: 5

Diagnosis: CHRONIC PANCREATITIS

Treatment: MEDICAL THERAPY

[CO-9: 577.1

CPT: 90000-99999

Line: 31 7 Category: 5

Diagnosis: HYPERPLASIA OF PROSTATE

Treatment: TRANSURETHRAL RESECTION, MEDICAL THERAPY

ICD-9: 600

Line: 31 8 Category: 11

Diagnosis: END STAGE RENAL DISEASE

Treatment: MEDICAL THERAPY INCLUDING DIALYSIS

ICD-9: 250.4,583.8-. 9

CPT: 11060,90000-99999

Line: 31 9 Category: 5

Diagnosis: GIANT CELL ARTERITIS, KAWASAKI DISEASE, HYPERSENSITIVITY ANGIITIS

Treatment: MEDICAL THERAPY

ICD-9: 446.1- .2,446.5

CPT: 90000-99999

Line: 32 0 Category: 3

Diagnosis: DERMATOMYOSITIS, POLYMYOSITIS

Treatment: MEDICAL THERAPY

ICD-9: 710.3,710. 4

CPT: 90000-99999

Line: 321 Category: 5
Appendix D-Prioritized Health Services List . 263

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: SYSTEMIC SCLEROSIS

Treatment: MEDICAL THERAPY

ICD-9: 710.1

CPT: 90000-99999

Line: 32 2 Category: 5

Diagnosis: UNWANTED PREGNANCY (Note: This line item is not priced as part of the list.)

Treatment: ABORTION

ICD-9: 635-639,779. 6

CPT: 59105-06,59840-52

Line: 32 3 Category: 6

Diagnosis: COMMON VENTRICLE

Treatment: TOTAL REPAIR TETRALOGY

ICD-9: 745.3

CPT: 33692-33696

Line: 32 4 Category: 5

Diagnosis: HERPES ZOSTER & HERPES SIMPLEX U/OPHTHALMIC COMPLICATIONS

Treatment: MEDICAL THERAPY

ICD-9: 053.2,054. 4

CPT: 90000-99999

Line: 32 5 Category: 1 0

Diagnosis: HYPHEMA

Treatment: REMOVAL OF BLOOD CLOT

ICD-9: 364.41

CPT: 65815,65930

Line: 32 6 Category: 1 0

Diagnosis: PENETRATING WOUND OF ORBIT

Treatment: SURGICAL TREATMENT

ICD-9: 870.3,870.8,870. 9

Line: 32 7 Category: 12

Diagnosis: PURULENT ENDOPHTHALMITIS

Treatment: VITRECTOMY

ICD-9: 360.0

CPT: 67005-67036

Line: 32 8 Category: 12

Diagnosis: PRIMARY AND OTHER ANGLE-CLOSURE GLAUCOMA

Treatment: IRIDECTOMY, LASER SURGERY

ICD-9: 365.20,365.22

CPT: 66761,66505,66625-66630

Line: 32 9 Category: 10

Diagnosis: GLAUCOMA ASSOCIATED WITH DISORDERS OF THE LENS

Treatment: EXTRACTION OF CATARACT

ICD-9: 365.5,360.1 9

CPT: 66920-66984

Line: 33 0 Category: 11

Diagnosis: PRIMARY AND OPEN ANGLE GLAUCOMA

Treatment: TRABECULECTOMY

ICD-9: 365.10-365.11

CPT: 66170

Line: 331 Category: 11

Diagnosis: GLAUCOMA: BORDERLINE, OPEN-ANGLE, CORTICOSTEROID-INDUCED, ASSOC. U/CONGENITAL ANOMALIES, DYSTROPHIES &

SYSTEMIC SYNDROMES, ASSOC. U/DISORDER OF THE LENS, ASSOC. U/OTHER OCULAR DISORDERS, OTHER & UNSPECIFIED

Treatment: MEDICAL THERAPY

ICD-9: 365.0-365 .1,365.3-365.9

CPT: 90000-99999

Line: 33 2 Category: 1 3

Diagnosis: DEGENERATION OF MACULA AND POSTERIOR POLE

Treatment: VITRECTOMY, LASER SURGERY

[CD-9: 362.5

CPT: 67038,67210

Line: 33 3 Category: 11

Diagnosis: VITREOUS HEMORRHAGE

Treatment: VITRECTOMY

ICD-9: 379.23

CPT: 67036

Line: 334 Category: 12
264 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: PRIMARY AND OTHER OPEN-ANGLE GLAUCOMA

Treatment: LASER TRABECULOPLASTY

ICD-9: 365.10-365.11

CPT: 65855

Line: 33 5 Category: 11

Diagnosis: PRIMARY AND OTHER OPEN-ANGLE GLAUCOMA

Treatment: CYCLOCRYOTHERAPY

ICD-9: 365.10-365.11

CPT: 66720-66721

Line: 3 3 6 Category: 11

Diagnosis: CATARACT

Treatment: EXTRACTION OF CATARACT

ICD-9: 366.0-. 3

CPT: 66920-84

Line: 33 7 Category: 11

Diagnosis: RETINAL DETACHMENT WITH RETINAL DEFECT

Treatment: VITRECTOMY

ICD-9: 361.0

CPT: 67036-67112

Line: 33 8 Category: 1 2

Diagnosis: OPEN WOUND OF EYEBALL

Treatment: CORNEAL LACERATION REPAIR

ICD-9: 871

CPT: 65280-65285

Line: 33 9 Category: 1 2

Diagnosis: CHRONIC INFLAMMATORY DISORDER OF ORBIT

Treatment: MEDICAL THERAPY

I C D-9: 376. 1

CPT: 90000-99999

Line: 34 0 Category: 1 3

Diagnosis: AFTER CATARACT

Treatment: DISCISSION, LENS CAPSULE

ICD-9: 366.5

CPT: 66800-66821

Line: 34 1 Category: 11

Diagnosis: ACUTE, SUBACUTE, CHRONIC AND OTHER CERTAIN TYPES OF IRIDOCYCLITIS

Treatment: MEDICAL THERAPY

ICD-9: 364.0-. 3

CPT: 90000-99999

Line: 34 2 Category: 1 3

Diagnosis: DIABETIC AND OTHER RETINOPATHY

Treatment: LASER SURGERY

ICD-9: 250.5,362.0-362. 2

CPT: 67210,67227-8

Line: 34 3 Category: 11

Diagnosis: RETROLENTAL FIBROPLASIA

Treatment: CRYOSURGERY

ICD-9: 362.21

CPT: 67101-67122

Line: 34 4 Category: 11

Diagnosis: APHAKIA AND OTHER DISORDERS OF LENS

Treatment: INTRAOCULAR LENS

ICD-9: 379.3

CPT: 66985

Line: 345 Category: 11

Diagnosis: EXOTROPIA

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 378

Line: 34 6 Category: 11
Appendix D--Prioritized Health Services List . 265

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: FOREIGN BODY IN CONJUNCTIVAL SAC

Treatment: REMOVAL CONJUNCTIVAL FOREIGN BODY

ICD-9: 930.1

CPT: 65205-22

Line: 34 7 Category: 1 0

Diagnosis: BENIGN NEOPLASM OF PITUITARY GLAND

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 227.3

Line: 34 8 Category: 5

Diagnosis: TRAUMATIC AMPUTATION OF THUMB OR OTHER FINGER (COMPLETE)(PARTIAL) U/ & U/O COMPLICATION

Treatment: REPLANTATION/AMPUTATE

ICD-9: 885-886

Line: 34 9 Category: 1 2

Diagnosis: OPEN WOUNDS

Treatment: REPAIR

891,892.2,893,894.2

7,69440,69666,69667

Line: 35 0 Category: 1 0

Diagnosis: ABSCESSES AND CYSTS OF BARTHOLIN’S GLAND AND VULVA

Treatment: INCISION AND DRAINAGE, MEDICAL THERAPY

ICD-9: 616.2-. 9

Line: 351 Category: 1 0

Diagnosis: PILONIDAL CYST WITH ABSCESS

Treatment: MEDICAL AND SURGICAL TREATMENT

[CD-9: 685.0

CPT: 10080-81 ,11770-72,90000-99999

Line: 35 2 Category: 1 4

Diagnosis: ACUTE THYROIDITIS

Treatment: MEDICAL THERAPY

ICD-9: 245.0

CPT: 90000-99999

Line: 35 3 Category: 1 0

Diagnosis: ACUTE OTITIS MEDIA

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 35 4 Category: 1 0

Diagnosis: CHRONIC OTITIS MEDIA

Treatment: PE TUBES/T & A/TYMPANOPLASTY

ICD-9: 381.5- .7,382.1-.3

CPT: 69400-69410,42820,69631-69633

Line: 35 5 Category: 11

Diagnosis: CHOLESTEATOMA

Treatment: SURGICAL TREATMENT

ICD-9: 385.30

Line: 35 6 Category: 1 3

Diagnosis: ACUTE SINUSITIS

Treatment: MEDICAL THERAPY

ICD-9: 461

CPT: 90000-99999

Line: 35 7 Category: 1
266 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: ACUTE CONJUNCTIVITIS

Treatment: MEDICAL THERAPY

[CD-9: 372.0,077

CPT: 90000-99999

Line: 35 8 Category: 1 4

Diagnosis: SPINA BIFIDA WITHOUT HYDROCEPHALUS

Treatment: MEDICAL THERAPY

ICD-9: 741.9

CPT: 90000-99999

Line: 35 9 Category: 2

Diagnosis: EDEMA AND OTHER CONDITIONS INVOLVING THE INTEGUMENT OF THE FETUS AND NEWBORN

Treatment: MEDICAL THERAPY

ICD-9: 778.5-. 9

CPT: 90000-99999

Line: 36 0 Category: 2

Diagnosis: CONGENITAL RUBELLA AND OTHER CONGENITAL INFECTIOUS DISEASES

Treatment: MEDICAL THERAPY

ICD-9: 771.0-. 2

CPT: 90000-99999

Line: 361 Category: 2

Diagnosis: FEEDING PROBLEMS IN NEWB0RN

Treatment: MEDICAL THERAPY

[CO-9: 779.3

CPT: 90000-99999

Line: 36 2 Category: 2

Diagnosis: DYSTONIA (UNCONTROLLABLE)

Treatment: MEDICAL THERAPY

ICD-9: 333

CPT: 90000-99999

Line: 36 3 Category: 5

Diagnosis: MULTIPLE VALVULAR DISEASE

Treatment: SURGICAL TREATMENT

ICD-9: 396-397

CPT: 33450-74,33480-92

Line: 364 Category: 5

Diagnosis: BILIARY ATRESIA

Treatment: LIVER TRANSPLANT

ICD-9: 751,6 1

CPT: 47135

Line: 365 Category: 5

— S102.26 Per Capita Cost Per Month —

Diagnosis: CIRRHOSIS OF LIVER OR BILIARY TRACT WITHOUT MENTION OF ALCOHOL

Treatment: LIVER TRANSPLANT

ICD-9: 571 .5-.6

CPT: 47135

Line: 36 6 Category: 5

Diagnosis: CHRONIC PULMONARY HEART DISEASE, OTHER DISEASES OF PULMONARY CIRCULATION, ACUTE & SUBACUTE ENDOCARDITIS,

ACUTE MYOCARDITIS, CARDIOMYOPATHY, OTHER CONG. ANOMALIES OF HEART AND CIRC. SYSTEM

Treatment: CARDIAC TRANSPLANT

ICD-9: 416-417,421-422,425,746-747

CPT: 33945

Line: 36 7 Category: 5

Diagnosis: ACUTE AND SUBACUTE NECROSIS OF LIVER

Treatment: LIVER TRANSPLANT

ICD-9: 570

CPT: 47135

Line: 36 8 Category: 3

Diagnosis: DIVERTICULITIS OF COLON

Treatment: COLON RESECTION

I C D-9: 562. 1

Line: 36 9 Category: 3
Appendix D--Prioritized Health Services List ● 267

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

CYST AND PSEUDOCYST OF PANCREAS

DRAINAGE OF PANCREATIC CYST

577. 2

370 Category: 5

CANCER OF BRAIN AND NERVOUS SYSTEM, TREATABLE

MEDICAL AND SURGICAL TREATMENT

371 Category: 5

ATHEROSCLEROSIS, VISCERAL

SURGICAL TREATMENT

440.0-. 1

35501-15,35526-31,35536-51 ,35560-63,35601-16,35626-46,35663

372 Category: 5

HYPERSOMNIA W/SLEEP APNEA

MEDICAL THERAPY, TRACHEOTOMY

780.53,34 7

90000-99999,31600-10

373 Category: 5

DISLOCATION KNEE & HIP, CLOSED

RELOCATION

835.0,836.3,836. 5 8718.35- .36

374 Category: 1 2

DISLOCATION OF ELBOW, HAND, ANKLE, FOOT, CLAVICLE AND SHOULDER, CLOSED

RELOCATION

375 Category: 1 2

TRACHOMA

MEDICAL THERAPY

076

90000-99999

376 Category: 1 0

CLEFT LIP, CONGENITAL FISTULA OF LIP

LIP EXCISION AND REPAIR

749.1,750.25

40650-720

377 Category: 11

CLEFT PALATE

REPAIR & PALATOPLASTY

749. 0

42200-26,42235-81

378 Category: 11

CLEFT PALATE WITH CLEFT LIP

EXCISION & REPAIR VESTIBULE OF MOUTH

749.2

40800-40899

379 Category: 11

CLOSED FRACTURE OF EPIPHYSIS OF LOWER EXTREMITIES

REDUCTION

820.01,821.22

27516-27519

380 Category: 12

FRACTURE OF SHAFT OF BONE, CLOSED

REDUCTION

381 Category: 10
268 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: PARAPLEGIA, QUADRIPLEGIA

Treatment: MEDICAL THERAPY AND REHABILITATION

[CD-9: 343,344.0-. 1

CPT: 90000-99999

Line: 38 2 Category: 1 3

Diagnosis: PARKINSON'S DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 332

CPT: 90000-99999

Line: 38 3 Category: 1 3

Diagnosis: MULTIPLE SCLEROSIS AND OTHER DEMYELINATING DISEASES OF CENTRAL NERVOUS SYSTEM

Treatment: MEDICAL THERAPY AND REHABILITATION

ICD-9: 340-341,334

CPT: 90000-99999

Line: 38 4 Category: 5

Diagnosis: CEREBRAL PALSY

Treatment: MEDICAL THERAPY

ICD-9: 343.0-.3,.9,344.1,741 .9,335.21 ,335.11,335.0

CPT: 90000-99999

Line: 38 5 Category: 1 3

Diagnosis: SUPERFICIAL INJURIES WITH INFECTION

Treatment: MEDICAL THERAPY

CPT: 12001-14,90000-99999

Line: 38 6 Category: 1 0

Diagnosis: LYME DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 088

CPT: 90000-99999

Line: 38 7 Category: 1 3

Diagnosis: CHRONIC ULCER OF SKIN

Treatment: MEDICAL THERAPY

ICD-9: 707

CPT: 90000-99999, 11000-44,15920-99

Line: 38 8 Category: 1 3

Diagnosis: CELLULITIS, NON-ORBITAL

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 38 9 Category: 1 0

Diagnosis: ATOPIC DERMATITIS

Treatment: MEDICAL THERAPY

ICD-9: 691.8

CPT: 90000-99999,11100

Line: 39 0 Category: 1 3

Diagnosis: CONTACT DERMATITIS AND OTHER ECZEMA

Treatment: MEDICAL THERAPY

ICD-9: 692

CPT: 90000-99999,11900-11901

Line: 391 Category: 1 3

Diagnosis: ACNE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 695.3

Line: 39 2 Category: 1 3

Diagnosis: PSORIASIS AND SIMILAR DISORDERS

Treatment: MEDICAL THERAPY

[cD-9: 69 6

CPT: 90000-99999,11900-11901

Line: 39 3 Category: 1 3
Appendix D--Prioritized Health Services List ● 269

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: ABSCESS OF BURSA OR TENDON

Treatment: INCISION AND DRAINAGE

ICD-9: 727.89

CPT: 27301 ,26990,26034,23930,23030,28001 ,27603

Line: 39 4 Category: 10

Diagnosis: ABSCESS OF PROSTATE

Treatment: TURP, DRAIN ABSCESS

ICD-9: 601.2

CPT: 52601

Line: 39 5 Category: 10

Diagnosis: INFECTIVE OTITIS EXTERNA

Treatment: MEDICAL THERAPY

[CD-9: 380.1-.2,054.73,112.8 2

CPT: 90000-99999

Line: 39 6 Category: 14

Diagnosis: CHRONIC OTITIS MEDIA

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 39 7 Category: 13

Diagnosis: DENTAL SERVICES (EC. DENTAL CARIES, FRACTURED TOOTH)

Treatment: RESTORATIVE DENTAL SERVICE

ICD-9: o

Line: 39 8 Category: 1 0

Diagnosis: RHEUMATOID ARTHRITIS, OSTEOARTHRITIS, AND ASEPTIC NECROSIS OF BONE

Treatment: ARTHROPLASTY

24366,24800-2&802,26516-26536

Line: 39 9 Category: 11

Diagnosis: RHEUMATOID ARTHRITIS AND OTHER INFLAMMATORY POLYARTHROPATHIES

Treatment: MEDICAL THERAPY

ICD-9: 714

CPT: 90000-99999

Line: 40 0 Category: 1 3

Diagnosis: GOUT

Treatment: MEDICAL THERAPY

ICD-9: 274

CPT: 90000-99999

Line: 401 Category: 13

Diagnosis: CRYSTAL ARTHROPATHIES

Treatment: MEDICAL THERAPY

ICD-9: 712

CPT: 90000-99999

Line: 40 2 Category: 13

Diagnosis: SYMPATHETIC UVEITIS AND DEGENERATIVE DISORDERS AND CONDITIONS

Treatment: ENUCLEATION

ICD-9: 360.11 ,360.2,360.4

CPT: 65105

Line: 40 3 Category: 12

Diagnosis: DISLOCATIONS OF NON-CERVICAL VERTEBRA, CLOSED

Treatment: REPAIR/RECONSTRUCTION

[CD-9: 839.2,839.4,839. 6

Line: 40 4 Category: 12
270 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: LUMBAR SPINAL STENOSIS

Treatment: LAMINECTOMY/LAMINOTOMY

ICD-9: 344.6

CPT: 63005,63017,63031 ,63042,63047

‘Line: 40 5 Category: 11

Diagnosis: FISTULA INVOLVING FEMALE GENITAL TRACT

Treatment: CLOSURE OF FISTULA

ICD-9: 619

Line: 40 6 Category: 11

Diagnosis: HYMEN AND VAGINAL SEPTUM

Treatment: HYMENECTOMY

ICD-9: 623.2-.3,752.40,752.4 2

CPT: 56700-20

Line: 40 7 Category: 11

Diagnosis: RECTAL PROLAPSE

Treatment: PARTIAL COLECTOMY

[CD-9: 569.1

CPT: 44140-44

Line: 40 8 Category: 11

Diagnosis: CONGENITAL ABSENCE OF VAGINA

Treatment: ARTIFICIAL VAGINA

ICD-9: 752.49

CPT: 57291-57292

Line: 40 9 Category: 11

Diagnosis: PLEURISY

Treatment: MEDICAL THERAPY

ICD-9: 511

CPT: 90000-99999,32000

Line: 41 0 Category: 1 0

Diagnosis: HYPOSPADIAS AND EPISPADIAS

Treatment: REPAIR

ICD-9: 752.6

CPT: 54300-440

Line: 41 1 Category: 11

Diagnosis: FRACTURE OF VERTEBRAL COLUMN WITH SPINAL CORD INJURY, SACRUM AND COCCYX

Treatment: LAMINECTOMY

ICD-9: 806.6-806. 9

CPT: 61720-61793

Line: 41 2 Category: 1 0

Diagnosis: LOWER EXTREMITY: COMPARTMENT SYNDROME

Treatment: DECOMPRESSION

ICD-9: 958.8

CPT: 27600-02

Line: 41 3 Category: 3

Diagnosis: OCCLUSION AND STENOSIS OF PRECEREBRAL ARTERIES

Treatment: THROMBOENDARTERECTOMY

ICD-9: 433

CPT: 35301

Line: 41 4 Category: 11

Diagnosis: ATHEROSCLEROSIS, PERIPHERAL

Treatment: SURGICAL TREATMENT

Line: 41 5 Category: 11

Diagnosis: DISPLACEMENT OF CERVICAL INTERVERTEBRAL DISC WITHOUT MYELOPATHY

Treatment: CERVICAL LAMINECTOMY, MEDICAL THERAPY

ICD-9: 722.0,722. 2

Line: 41 6 Category: 11
Appendix D--Prioritized Health Services List . 271

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosls: CALCULUS OF BLADDER OR KIDNEY

Treatment: OPEN RESECTION, PERCUTANEOUS NEPHROSTOLITHOTOMY, NEPHROLITHOTOMY, LITHOTRIPSY

ICD-9: 592.0,594. 1

CPT: 50060-81 ,50130,50392-93,50700- 16,50590,52317

Line: 41 8 Category: 11

Diagnosis: ANAL FISTULA

Treatment: FISTULECTOMY

ICD-9: 565.1

CPT: 46211,46270-85,46000-30

Line: 41 9 Category: 1 0

Diagnosis: RESIDUAL FOREIGN BODY IN SOFT TISSUE

Treatment: REMOVAL

ICD-9: 729.6

CPT: 28190,28192

Line: 42 0 Category: 1 0

— S11O.59 Per Capita Cost Per Month —

Diagnosis: GLYCOGENOSIS

Treatment: MEDICAL THERAPY

ICD-9: 271.0

CPT: 90000-99999

Line: 421 Category: 5

Diagnosis: MALUNION & NONUNION OF FRACTURE

Treatment: SURGICAL TX

ICD-9: 733.8

Line: 42 2 Category: 11

Diagnosls: OSTEOPOROSIS

Treatment: MEDICAL THERAPY

ICD-9: 733.0

CPT: 90000-99999

Line: 42 3 Category: 13

Diagnosis: OPHTHALMIC INJURY: LACRIMAL SYSTEM LACERATION

Treatment: CLOSURE

ICD-9: 870.2

CPT: 68760

Line: .424 Category: 1 7

Diagnosis: DISORDERS OF REFRACTION AND ACCOMMODATION

Treatment: MEDICAL THERAPY

ICD-9: 367

CPT: 90000-99999

Line: 425 Category: 13

Diagnosis: VINCENT’S DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 101

CPT: 90000-99999

Line: 42 6 Category: 1

Diagnosis: URETHRITI S

Treatment: MEDICAL THERAPY

ICD-9: 597

CPT: 90000-99999

Line: 42 7 Category: 10
272 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: TRICHOMONAL URETHRITIS, TRICHOMONAL PROSTATITIS

Treatment: MEDICAL THERAPY

ICD-9: 131.02,131.03,131.8,131 .9

CPT: 90000-99999

Line: 42 8 Category: 1 0

Diagnosis: UTERINE LEIOMYOMA

Treatment: TOTAL HYSTERECTOMY OR MYOMECTOMY

[CD-9: 218-219

Line: 4 2 9 Category: 11

Diagnosis: REDUCTION DEFORMITY OF LOWER LIMB

Treatment: EPIPHYSEAL,OSTEOPLASTY

[CD-9: 755.3

Line: 43 0 Category: 11

Diagnosis: MIGRAINE

Treatment: MEDICAL THERAPY

ICD-9: 346

CPT: 90000-99999

Line: 43 1 Category: 1 3

Diagnosis: ANAL FISSURE

Treatment: FISSURECTOMY

ICD-9: 565.0

CPT: 46200,46700,46940

Line: 43 2 Category: 1 0

Diagnosis: STRESS INCONTINENCE, FEMALE

Treatment: URETHROPEXY/PESSARY

ICD-9: 625.6

CPT: 51840-41,57160

Line: 43 3 Category: 11

Diagnosis: BODY INFESTATIONS (EG. LICE, SCABIES)

Treatment: MEDICAL THERAPY

ICD-9: 132-134

CPT: 90000-99999

Line: 43 4 Category: 1 4

Diagnosis: SIALOLITHIASIS, MUCOCELE, DISTURBANCE OF SALIVARY SECRETION, OTHER AND UNSPECIFIED DISEASES OF SALIVARY

GLANDS

Treatment: SURGERY

[co-9: 527.5-527. 9

Line: 43 5 Category: 11

Diagnosis: ANOMALIES OF EXTERNAL EAR U/ IMPAIRMENT OF HEARING

Treatment: RECONSTRUCT OF EAR CANAL

ICD-9: 744.0

CPT: 69320

Line: 436 Category: 11

Diagnosis: CERVICITIS, ENDOCERVICITIS, HEMATOMA OF VULVA, OVARIAN CYSTS AND NONINFLAMMATORY DISORDERS OF THE VAGINA

Treatment: MEDICAL THERAPY

ICD-9: 616.0,620.0- .2,620.9,622.3- .4,622.6- .7,623.6,623.8- .9,624.5,626.7

CPT: 90000-99999

Line: 43 7 Category: 1 0

Diagnosis: BENIGN NEOPLASM OF KIDNEY

Treatment: MEDICAL THERAPY

ICD-9: 223.1

CPT: 90000-99999

Line: 43 8 Category: 11
Appendix Prioritized Health Services List ● 273

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

NONINFLAMMATORY DISORDERS OF CERVIX

MEDICAL THERAPY

622.4- .9,624.2,624.5-.9

90000-99999

439 Category: 11

CEREBRAL PALSY

REPAIR/RECONSTRUCTION

343.0- .38343.9,344.1,741.9,335 .21,335.11,335.0

.440 Category: 11

HYPOPLASTIC LEFT HEART SYNDROME

NORWOOD PROCEDURE

746. 7

33480-33485

441 Category:

OTHER SPECIFIED ANOMALIES

APICAL-AORTIC CONDUIT

746.8

33404

442 Category:

UTERINE PROLAPSE

SURGICAL REPAIR

618

57160,58150,58260-85

2

OF HEART

5

443 Category: 11

SHIGELLOSIS, GIARDIASIS, INTESTINAL HELMINTHIASIS

MEDICAL THERAPY

004,007. 1,120-122,123.0,125- 129

90000-99999

444 Category: 10

CORNEAL ULCER

MEDICAL THERAPY

370.0

90000-99999,65286

445 Category: 10

CARPAL TUNNEL SYNDROME, CONTRACTURE OF PALMAR FACIA

SURGICAL TREATMENT

354.0,354.2,728. 6

446 Category: 11

DEFORMITIES OF UPPER BODY & LIMBS

REPAIR/REVISION/RECONSTRUCTION/RELOCATION/FASCIECTOMY

447 Category: 11

MENSTRUAL BLEEDING DISORDERS

MEDICAL THERAPY

626.2- .6,626.8,627.0

90000-99999

448 Category: 10

RUPTURE OF SYNOVIUM

REMOVAL OF BAKER’S CYST

727.51

27435

449 Category: 11
274 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF HAY 1, 1991

Diagnosis: DEFORMITIES OF FOOT

Treatment: FASCIOTOMY/lNCISION/REPAIR/ARTHRODESIS

Line: 45 0 Category: 11

Diagnosis: FOREIGN BODY IN UTERUS, VULVA AND VAGINA

Treatment: MEDICAL AND SURGICAL TREATMENT

[CD-9: 939.1-. 2

CPT: 57410,58120,90000-99999

Line: 451 Category: 1 0

Diagnosis: VAGINITI S

Treatment: MEDICAL THERAPY

ICD-9: 112. 1,131.00-.01,131.09,623.5,625 .1

CPT: 57150,90000-99999

Line: 4 5 2 Category: 10

Diagnosis: PRIAPISM, ORCHITIS, EPIDIDYMITIS, SEMINAL VESICULITIS, FOREIGN BODY IN PENIS, URETHRAL STRICTURE

Treatment: MEDICAL THERAPY, REMOVAL OF FOREIGN BODY, DILATION

ICD-9: 595.0,598,604,607.3,608.0,939. 9

CPT: 51700,52275-76,53600-01 ,53620-21 ,53660-61 ,53670,54115,54154,54640,54700-861 ,55401,55450,90000-99999

Line: 45 3 Category: 1 0

Diagnosis: BENIGN NEOPLASM OF EXTERNAL FEMALE GENITAL ORGANS

Treatment: BIOPSY/EXCISION

I C D-9: 221 .1-221.9

CPT: 56-440, 56501,56600,57105,57135

Line: 45 4 Category: 11

Diagnosis: BALANOPOSTHITIS AND OTHER DISORDERS OF PENIS

Treatment: MEDICAL THERAPY

ICD-9: 607.1,607. 8

CPT: 90000-99999

Line: 45 5 Category: 1 0

Diagnosis: NONINFLAMMATORY DISORDERS AND BENIGN NEOPLASMS OF OVARY AND FALLOPIAN TUBES

Treatment: SALPINGECTOMY, OOPHORECTOMY

ICD-9: 620.4,620.8,220,221. 0

CPT: 58140-50,58700-58720,58925,58940

Line: 45 6 Category: 11

Diagnosis: BONE SPUR

Treatment: OSTECTOMY

ICD-9: 726.91

CPT: 28119,28899

Line: 45 7 Category: 11

Diagnosis: BELL’S PALSY, EXPOSURE KERATOCON JUNCTIVITIS

Treatment: TARSORRHAPHY

ICD-9: 351.0,370.3 4

CPT: 67880

Line: 45 8 Category: 1 0

Diagnosis: NASAL POLYP, BENIGN NEOPLASM OF NASAL CAVITIES, MIDDLE EAR & ACCESSORY SINUSES

Treatment: RECONSTRUCTION

[CD-9: 471 .9,212.0

Line: 45 9 Category: 11

Diagnosis: CYST OF THYROID

Treatment: SURGERY - EXCISION

ICD-9: 246.2

CPT: 60200,60100

Line: 46 0 Category: 11

Diagnosis: ORBITAL CYST

Treatment: ORBITOTOMY

ICD-9: 376.81

CPT: 67400-67450

Line: 461 Category: 11
Appendix D--Prioritized Health Services List . 275

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

OTOSCLEROSIS

STAPEDECTOMY

387

69650-62

462 Category: 11

FOREIGN BODY: ACCIDENTALLY LEFT DURING A PROCEDURE, GRANULOMA OF MUSCLE, GRANULOMA OF SKIN & SUBCUTANEOUS

TISSUE

REMOVAL OF FOREIGN BODY

998.4,728.82,709. 4

463 Category: 11

HYPERTROPHY OF BREAST

SUBCUTANEOUS TOTAL MASTECTOMY, BREAST REDUCTION

611.1

19140,19318

464 Category: 11

OBSTRUCTION OF NASOLACRIMAL

PROBING NASOLACRIMAL DUCT

375.55

68825-68830

465 Category: 11

DUCT, NEONATAL

THROMBOSED AND COMPLICATED HEMORRHOIDS

HEMORRHOIDECTOMY, INCISION

455.1-.2,455.4-.5,455.7- . 8

10140,45336,46083,46220,46250-62,66320,46934-36

466 Category: 11

STENOSIS OF NASOLACRIMAL DUCT (ACQUIRED)

DACRYOCYSTORHINOSTOMY

375.4,375.5 6

68720-68730

467 Category: 11

URETHRAL FISTULA

EXCISION, MEDICAL THERAPY

599.1

50650-50660,90000-99999

468 Category: 11

ENDOMETRIOSIS

MEDICAL AND SURGICAL TREATMENT WITHOUT HYSTERECTOMY

617

58145-50,58984,90000-99999

469 Category: 13

PTOSIS (ACQUIRED) WITH VISION IMPAIRMENT

PTOSIS REPAIR

374.3

15823,67904

470 Category: 11

ENTROPION AND TRICHIASIS OF EYELID; ECTROPION; BENIGN NEOPLASM OF EYELID

ECTROPION/ENTROPION REP.

216. 1,374.0-374.1

17340,67700-67850,67880, 67914-67924

471 Category: 11

BENIGN NEOPLASM BONE & ARTICULAR CARTILAGE, OTHER BENIGN NEOPLASM OF CONNECTIVE AND OTHER SOFT TISSUE

BIOPSY-EXCISION

213,215,225.3-. 4

10003,11050,11400-46, 13131 ,17100-200,20550,21556, 21600, 21920-21935,22106,23065- 23077,23140-23156,23100-

23101,24065-24077,24110, 25120-25136,25170,26100-261 17,26200- 15,26250-62,26449,27040-49, 27065-7,27075-

9,27323-9, 27637,28108,28122-4 ,28285,64774,69140

472 Category: 11
276 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: FOREIGN BODY IN EAR & NOSE

Treatment: REMOVAL OF FOREIGN BODY

[CD-9: 931-932

CPT: 69200-69205,30300-20

Line: 47 3 Category: 1 0

Diagnosis: PTERYGIUM

Treatment: EXCISION OR TRANSPOSITION OF PTERYGIUM U/O GRAFT

ICD-9: 372.4

CPT: 65420

Line: 47 4 Category: 11

Diagnosis: OPEN WOUND OF EAR DRUM

Treatment: TYMPANOPLASTY

ICD-9: 872.61

CPT: 69610-43

Line: 47 5 Category: 1 0

— $117.21 Per Capita Cost Per Month —

Diagnosis: ENOPHTHALMOS

Treatment: ORBITAL IMPLANT

ICD-9: 376.50

CPT: 67550

Line: 47 6 Category: 11

Diagnosis: HEARING LOSS - OVER AGE OF THREE

Treatment: MEDICAL THERAPY

ICD-9: 388-389

CPT: 90000-99999

Line: 477 Category: 11

Diagnosis: PARALYSIS OF VOCAL CORDS OR LARYNX, OTHER DISEASES OF LARYNX

Treatment: INCISION/EXCISION/ENDOSCOPY

ICD-9: 478.3,478. 7

CPT: 31300-31579,31580-31605

Line: 47 8 Category: 11

Diagnosis: DENTAL CARIES (PERIAPICAL INFECTION)

Treatment: SURGERY

ICD-9: 521.0

CPT: 41899

Line: 47 9 Category: 11

Diagnosis: IMPACTED TEETH

Treatment: SURGERY

ICD-9: 520.6,524.3-. 4

CPT: 21254,30520,41899

Line: 48 0 Category: 11

Diagnosis: RECURRENT EROSION OF THE CORNEA

Treatment: CORNEAL TATTOO, REMOVAL OF CORNEAL EPITHELIUMS; WITH OR WITHOUT CHEMOCAUTERIZATION

ICD-9: 371.42

CPT: 65600,65435

Line: 48 1 Category: 11

Diagnosis: CHRONIC SINUSITIS, NASAL POLYPS, OTHER DISORDERS OF NASAL CAVITY AND SINUSES

Treatment: SURGICAL

ICD-9: 471,473,478.1

CPT: 11426-41,30000-31299

Line: 48 2 Category: 11

Diagnosis: OSTEOARTHRITIS AND ALLlED DISORDERS

Treatment: MEDICAL THERAPY

ICD-9: 715

CPT: 90000-99999

Line: 48 3 Category: 13

Diagnosis: DEVIATED NASAL SEPTUM, ACQUIRED DEFORMITY OF NOSE, OTHER DISEASES OF UPPER RESPIRATORY TRACT

Treatment: EXCISION OF CYST/RHINECTt14Y/PROSTHESES

Line: 48 4 Category: 11
Appendix D-Prioritized Health Services List ● 277

PRIORITIZED HEALTH SERVICES LIST OF HAY 1, 1991

Diagnosis: ADHESIVE CAPSULITIS OF SHOULDER, ARTICULAR CARTILAGE DISORDER OF SHOULDER, PERIOSTITIS OF SHOULDER

Treatment: REPAIR/RECONSTRUCTION

Line: 48 5 Category: 11

Diagnosis: MENOPAUSAL MANAGEMENT

Treatment: MEDICAL THERAPY OTHER THAN HORMONE REPLACEMENT

ICD-9: 627.2-. 9

CPT: 90000-99999

Line: 48 6 Category: 1 3

Diagnosis: EQUINUS DEFORMITY OF FOOT, ACQUIREO

Treatment: ARTHROTOMY

ICD-9: 736.72

CPT: 27612

Line: 48 7 Category: 11

Diagnosis: CYSTS OF ORAL SOFT TISSUES

Treatment: MEDICAL THERAPY

ICD-9: 528.4

CPT: 90000-99999

Line: 48 8 Category: 11

Diagnosis: STOMATITIS, CELLULITIS AND ABSCESS OF ORAL SOFT TISSUE, AND DISEASES OF LIPS

Treatment: MEDICAL THERAPY

ICD-9: 528.0,528.3,528. 5

CPT: 90000-99999

Line: 48 9 Category: 10

Diagnosis: OTHER SPECIFIED CONDITIONS OF THE TONGUE

Treatment: EXCISION, BIOPSY

ICD-9: 529.8

Line: 49 0 Category: 11

Diagnosis: SPECIFIC DISORDERS OF THE TEETH AND SUPPORTING STRUCTURES

Treatment: EXCISION OF DENTOALVEOLAR STRUCTURE

ICD-9: 525.8

Line: 49 1 Category: 11

Diagnosis: PARAPLEGIA

Treatment: SURGICAL PREVENTION OF CONTRACTURES

ICD-9: 344.1

CPT: 27003

Line: 49 2 Category: 11

Diagnosis: PERIPHERAL ENTHESOPATHIES

Treatment: SURGICAL TREATMENT

10,29345,29355,29365

Line: 49 3 Category: 11

Diagnosis: CHRONIC DISEASE OF TONSILS AND ADENOIDS

Treatment: TONSILLECTOMY AND ADENOIDECTOMY

ICD-9: 474

CPT: 42820-36,42860,42870

Line: 49 4 Category: 11

Diagnosis: GANGLION OF TENDON OR JOINT

Treatment: EXCISION

ICD-9: 727.4

CPT: 28090

Line: 49 5 Category: 11

Diagnosis: KERATOCON JUNCTIVITIS SICCA, NOT SPECIFIED AS SJOGREN’S

Treatment: PUNCTAL OCCLUSION, TARSORRHAPHY

ICD-9: 370.33

CPT: 68760,67880

Line: 49 6 Category: 11
278 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: PARAPLEGIA

Treatment: ARTHRODESIS

ICD-9: 344.1

CPT: 27870

Line: 49 7 Category: 11

Diagnosis: OVARIAN CYST

Treatment: OOPHORECTOMY

I C D-9: 256.1,256. 4

CPT: 58940

Line: 49 8 Category: 1 2

Diagnosis: HISTIOCYTOSI S

Treatment: MEDICAL THERAPY

I C D-9: 277. 8

CPT: 90000-99999

Line: 49 9 Category: 5

Diagnosis: CANCER OF ESOPHAGUS, TREATABLE

Treatment: MEDICAL AND SURGICAL THERAPY

ICD-9: 150,195.2,230.1

Line: 500 Category: 5

Diagnosis: OCCUPATIONAL LUNG DISEASES

Treatment: MEDICAL THERAPY

ICD-9: 500-505

CPT: 90000-99999

Line: 501 Category: 5

Diagnosis: LESION OF PLANTAR NERVE

Treatment: MEDICAL THERAPY, EXCISION

ICD-9: 355.6

CPT: 28080,90000-99999

Line: 5 0 2 Category: 11

Diagnosis: NONTOXIC NODULAR GOITER

Treatment: THYROIDECTOMY

ICD-9: 241

CPT: 60245,60220

Line: 50 3 Category: 11

Diagnosis: HERNIA WITHOUT OBSTRUCTION OR GANGRENE

Treatment: REPAIR

ICD-9: 550.9,553

Line: 50 4 Category: 11

Diagnosis: BENIGN NEOPLASM OF RESPIRATORY AND INTRATHORACIC ORGANS

Treatment: LOBECTOMY, MEDICAL THERAPY

ICD-9: 212

Line: 50 5 Category: 11

Diagnosis: MUSCULAR DYSTROPHY

Treatment: MEDICAL THERAPY

ICD-9: 359

CPT: 90000-99999

Line: 50 6 Category: 5

Diagnosis: TRANSIENT CEREBRAL ISCHEMIA

Treatment: MEDICAL THERAPY

ICD-9: 435

CPT: 90000-99999

Line: 50 7 Category: 1 0

Diagnosis: PERITONEAL ADHESION

Treatment: SURGICAL TREATMENT

ICD-9: 568

CPT: 44005,44610,45110,49000

Line: 50 8 Category: 1
Appendix D--Prioritized Health Services List . 279

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: ALCOHOLIC FATTY LIVER OR ALCOHOLIC HEPATITIS

Treatment: MEDICAL THERAPY

ICD-9: 571.0-. 1

CPT: 90000-99999

Line: 50 9 Category: 5

Diagnosis: SPINA BIFIDA WITH HYDROCEPHALUS

Treatment: MEDICAL THERAPY

ICD-9: 741.0

CPT: 90000- 999999,63706

Line: 51 0 Category: 5

Diagnosis: OTHER DEFICIENCIES OF CIRCULATING ENZYMES (ALPHA 1-ANTITRYPSIN DEFICIENCY)

Treatment: MEDICAL THERAPY

I C O-9: 277. 6

CPT: 90000-99999

Line: 511 Category: 5

Diagnosis: DIABETES MELLITUS WITH END STAGE RENAL DISEASE

Treatment: PANCREAS/KIDNEY TRANSPLANT

ICD-9: 250.4

CPT: 50389

Line: 51 2 Category: 5

Diagnosis: CANCER OF GALLBLADDER AND OTHER BILIARY, TREATABLE

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 156,197.8,230. 8

Line: 51 3 Category: 5

Diagnosis: ACUTE POLIOMYELITIS

Treatment: MEDICAL THERAPY

ICD-9: 045

CPT: 90000-99999

Line: 51 4 Category: 3

Diagnosis: PITUITARY DWARFISM

Treatment: MEDICAL THERAPY

ICD-9: 253.3

CPT: 90000-99999

Line: 51 5 Category: 1 3

Diagnosis: UNSPECIFIED POLYNEUROPATHY

Treatment: MEDICAL THERAPY

ICD-9: 357.9

CPT: 90000-99999

Line: 51 6 Category: 3

Diagnosis: HEREDITARY HEMORRHAGIC TELANGIECTASIA

Treatment: EXCISION

ICD-9: 448.0

CPT: 11400-11426

Line: 51 7 Category: 5

Diagnosis: DISEASES OF THYMUS GLAND

Treatment: MEDICAL THERAPY

ICD-9: 254

CPT: 90000-99999

Line: 51 8 Category: 5

Diagnosis: CEREBRAL DEGENERATIONS USUALLY MANIFEST IN CHILDHOOD

Treatment: MEDICAL THERAPY

ICD-9: 330

CPT: 90000-99999

Line: 51 9 Category: 5

Diagnosls: CHRONIC RHEUMATIC PERICARDITIS, RHEUMATIC MYOCARDITIS

Treatment: MEDICAL THERAPY

ICD-9: 393,398.0

CPT: 90000-99999

Line: 52 0 Category: 5
280 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 199 1

CANCER OF LIVER, TREATABLE

MEDICAL AND SURGICAL TREATMENT

155, 197.7,235.3

31300,31540-1 ,32100,39200,42415,45333,46917, 11042,32900,37617,43260,43630-

38,43860,44005,44025,44305,47010,48150,44131 ,47120-30,47600-20,47710,49000,49080,90000-99999

521 Category: 5

ACUTE NON-LYMPHOCYTIC LEUKEMIAS

CHEMOTHERAPY

205.0,206.0,207.0,208.0

522 Category: 5

MULTIPLE MYELOMA AND CHRONIC LEUKEMIAS

BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

202.4,203,205.1-.9,206.1- .9,207.1- .8,208.1-.9

38230-41

523 Category: 5

MALIGNANT NEOPLASM OF OTHER ENDOCRINE GLANDS AND RELATED STRUCTURES, TREATABLE

BONE MARROW RESCUE AND TRANSPLANT

194

38240,38230

524 Category: 5

ANOMALIES OF GALLBLADDER, BILE DUCTS, AND LIVER

MEDICAL AND SURGICAL TREATMENT

751.6

90000-99999,47400-47999

525 Category: 5

CANCER OF PANCREAS, TREATABLE

MEDICAL AND SURGICAL TREATMENT

157,230.9

526 Category:

PARASITIC INFESTATION OF

MEDICAL THERAPY

373. 6

90000-99999

527 Category:

ATELECTASIS (COLLAPSE OF

MEDICAL THERAPY

518.0-.1

90000-99999,31645

528 Category:

5

EYELID

10

LUNG)

10

HEMORRHAGE AND INFARCTION OF THYROID

MEDICAL THERAPY

246.3

90000-99999

529 Category: 10

RETINAL TEAR

LASER PROPHYLAXIS

361.30

67141-67145

530

SPONTANEOUS

MEDICAL AND

category: 10

AND MISSED ABORTION

SURGICAL TREATMENT

631-632,634.2-.9

59820-21,90000-99999

531 Category:

INFLAMMATION OF LACRIMAL

MEDICAL THERAPY

375

90000-99999

532 Category:

10

PASSAGES

10

— S120.76 Per capita Cost Pe~ Month —
Appendix D--Prioritized Health Services List ● 281

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: MINOR BURNS

Treatment: MEDICAL THERAPY

CPT: 11000-1,11040-4,11960-70, 14020,14040-1,14060,15200, 15220,15240,15260,15350, 15400, 15500-10,15770,16000-

16035,20550,20610,35206,64450,90000-99999

Line: 53 3 Category: 1 0

Diagnosis: ALLERGIC RHINITIS AND CONJUNCTIVITIS

Treatment: MEDICAL THERAPY

lCD-9: 477,471,472,372.00-.1 4

CPT: 90000-99999

Line: 53 4 Category: 1 3

Diagnosis: CORNEAL ULCER

Treatment: CONJUNCTIVAL FLAP

ICD-9: 370.0

CPT: 68360

Line: 53 5 Category: 1 0

Diagnosis: HYPERESTROGENISM

Treatment: HYSTERECTOMY, MEDICAL THERAPY

ICD-9: 256.0

CPT: 58120,58150,90000-99999

line: 53 6 Category: 1 0

Diagnosis: PELVIC PAIN SYNDROME

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 614.1 -.2,614.4,614.6-.9,615. 1-.9,625.0-.2,625.4-.5,625 .8-.9

CPT: 11043,58150,58805,58925,58980,90000-99999

Line: 537 Category: 13

Diagnosis: RETAINED DENTAL ROOT

Treatment: EXCISION OF DENTOALVEOLAR STRUCTURE

ICD-9: 525.3

Line: 53 8 Category: 1 0

Diagnosis: KERATITIS: CORNEAL ULCER, SUPERFICIAL U/O CONJUNCTIVITIS, OTHER AND UNSPECIFIED KERATOCON JUNCTIVITIS,

INTERSTITIAL & DEEP, CORNEAL NEOVASCULARIZATION

Treatment: KERATOPLASTY

ICD-9: 370.0,371 .0-371.1,371.23,371 .4-371.6

CPT: 65730,65920,66985

Line: 53 9 Category: 1 0

Diagnosis: TRANSIENT NEPHROTIC SYNDROME WITH LESION OF MINIMAL CHANGE GLOMERULONEPHRITIS

Treatment: MEDICAL THERAPY

ICD-9: 581.3

CPT: 90000-99999

Line: 540 Category: 10

Diagnosis: TONGUE TIE AND OTHER ANOMALIES OF TONGUE

Treatment: FRENOTOMY, TONGUE T I E

ICD-9: 750.0-.1

CPT: 40806,40819,41010,41115

Line: 541 Category: 11

Diagnosis: BRANCHIAL CLEFT CYST

Treatment: EXCISION

ICD-9: 744.42

CPT: 42810,42815

Line: 54 2 Category: 11

Diagnosis: ATROPHY OF EDENTULOUS ALVEOLAR RIDGE

Treatment: VESTIBULOPLASTY, GRAFTS, IMPLANTS

I C D-9: 525. 2

Line: 5 4 3 Category: 11

328-308 0 - 92 - 10
282 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 199 1

Diagnosis: SPINE DEFORMITIES

Line: 54 4 Category: 11

Diagnosis: BENIGN NEOPLASM OF MALE GENITAL ORGANS: TESTIS, PROSTATE, EPIDIDYMIS

Treatment: MEDICAL THERAPY

ICD-9: 222.0,222.2,222.3,222.8, 222. 9

CPT: 90000-99999

Line: 54 5 Category: 11

Diagnosis: DISORDERS OF BLADDER

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 596.0-.5,5%.7-. 9

CPT: 90000-99999,51800-45,51880-980,53660-61 ,53670

Line: 54 6 Category: 11

Diagnosis: HYPERTELORISM OF ORBIT

Treatment: ORBITOTOMY

ICD-9: 376.41

CPT: 67400

Line: 54 7 Category: 11

Diagnosis: DENTAL SERVICES (EG. TOOTH LOSS)

Treatment: RESTORATIVE DENTAL SERVICE

ICD-9: O

80,07950,09630

Line: 54 8 Category: 1 2

Diagnosis: DENTAL SERVICES (EG. MALPOSITIONED TOOTH)

Treatment: RESTORATIVE DENTAL SERVICE

ICD-9: O

Line: 54 9 Category: 11

Diagnosis: DENTAL SERVICES (EG. INSUFFICIENT ROOM TO RESTORE TOOTH)

Treatment: RESTORATIVE DENTAL SERVICE

ICD-9: 0

Line: 55 0 Category: 11

Diagnosis: UNSPECIFIED DISEASE OF HARD TISSUES OF TEETH (AVULSION)

Treatment: INTERDENTAL WIRING

[CD-9: 525.9

CPT: 21497

Line: 55 1 Category: 1 2

Diagnosis: RETAINED INTRAOCULAR FOREIGN BODY, MAGNETIC & NONMAGNETIC

Treatment: FOREIGN BODY REMOVAL

ICD-9: 360.5-360.6

CPT: 65230,65260-65265

Line: 552 Category: 12

Diagnosis: INTERNAL DERANGEMENT OF KNEE

Treatment: ARTHROSCOPIC REPAIR

I C D-9: 717.1-.3,717.40,717.42-.4 9

CPT: 29870-89,27403-29

Line: 55 3 Category: 1 2

Diagnosis: CLOSED FRACTURE OF EPIPHYSIS OF UPPER EXTREMITIES

Treatment: REDUCTION

ICD-9: 812.09,812.44,813.4 3

CPT: 25350,25600-20

Line: 55 4 Category: 1 2
Appendix D--Prioritized Health Services List ● 283

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: CONGENITAL DISLOCATION OF HIP; COXA VARA & VALGA, CONGENITAL

Treatment: REPAIR/RECONSTRUCTION

ICD-9: 754.3,755.62,755.6 1

CPT: 27179,27181,27185

Line: 55 5 Category: 1 2

Diagnosis: MECHANICAL AND OTHER COMPLICATION OF INTERNAL ORTHOPEDIC AND PROSTHETIC DEVICE, IMPLANT AND GRAFT; IMPLANT

OR GRAFT; INFECTION & INFLAMMATORY REACTION DUE TO INTERNAL PROSTHETIC DEVICE

Treatment: TREATMENT, ARTHROPLASTY

CPT: 27485-27488,27265,27266, 27134,27137,27138

Line: 55 6 Category: 12

Diagnosis: DISORDERS OF SHOULDER

Treatment: REPAIR/RECONSTRUCTION

ICD-9: 727.61 ,726.10,840.4

Line: 5 5 7 Category: 12

Diagnosis: CONGENITAL DISLOCATION OF KNEE, GENU VARUM & VALGUM (ACQ’D), CONGENITAL BOWING OF FEMUR, TIBIA & FIBULA,

GENU RECURVAUM (ACQ’D), CONGITAL GENU RECURVATUM LONG BONES OF LEGS, CONGENITAL DEFORMITIES OF KNEE

Treatment: OSTEOTOMY

ICD-9: 736.42,754.40-.43,755.6 4

CPT: 27455,27448-27450

Line: 55 8 Category: 12

Diagnosis: CONGENITAL DEFORMITIES OF KNEE

Treatment: ARTHROSCOPIC REPAIR

ICD-9: 755.64

CPT: 29870-89,27403-29

Line: 55 9 Category: 13

Diagnosis: UNSPECIFIED RETINAL VASCULAR OCCLUSION; CENTRAL RETINAL VEIN OCCLUSION, VENOUS TRIBUTARY (BRANCH) OCCLUSION

Treatment: LASER SURGERY

ICD-9: 362.30,362.35,362.3 6

CPT: 67228

Line: 56 0 Category: 12

Diagnosis: EXFOLIATION OF TEETH DUE TO SYSTEMIC CAUSES

Treatment: EXCISION OF DENTOALVEOLAR STRUCTURE

ICD-9: 525.0

Line: 561 Category: 12

Diagnosis: RUBEOSIS IRIDI S

Treatment: LASER SURGERY

ICD-9: 364.42

CPT: 67228,66720-66721

Line: 56 2 Category: 12

Diagnosis: TRAUMATIC AMPUTATION OF TOE (COMPLETE)(PARTIAL) W/ & W/O COMPLICATION

Treatment: REPLANTATION/AMPUTATE

ICD-9: 895

CPT: 20838-40,28810-25

Line: 56 3 Category: 12

Diagnosis: PERIPHERAL NERVE DISORDERS (NON-INJURY)

Treatment: NEUROPLASTY

Line: 56 4 Category: 12

Diagnosis: DISORDERS OF SWEAT GLANDS

Treatment: MEDICAL THERAPY

ICD-9: 705.0,705.81,705.89,705.9, 780.8

CPT: 90000-99999

Line: 56 5 Category: 13
284 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: CHONDROMALACIA

Treatment: MEDICAL THERAPY

ICD-9: 733.92

CPT: 90000-99999

Line: 56 6 Category: 1 3

Diagnosis: EPIPHYSEAL ARREST

Treatment: MEDICAL THERAPY

ICD-9: 733.91

CPT: 90000-99999

Line: 56 7 Category: 1 3

Diagnosis: DIAPHYSITI S

Treatment: MEDICAL THERAPY

ICD-9: 733.99

CPT: 90000-99999

Line: 5 6 8 Category: 13

Diagnosis: FRACTURES OF RIBS AND STERNUM, CLOSED

Treatment: MEDICAL THERAPY

IcD-9: 807.0,807.2

CPT: 90000-99999

Line: 569 Category: 1 0

Diagnosis: FRACTURE OF ONE OR MORE PHALANGES OF FOOT

Treatment: SET

ICD-9: 826

Line: 570 Category: 10

Diagnosis: BRACHIAL PLEXUS LESIONS

Treatment: MEDICAL THERAPY

ICD-9: 353.0

CPT: 90000-99999

Line: 571 Category: 1 3

Diagnosis: CHRONIC SINUSITIS

Treatment: MEDICAL THERAPY

ICD-9: 473

CPT: 90000-99999

Line: 572 Category: 13

Treatment: MEDICAL THERAPY

ICD-9: 724.2,724.4,722.8

CPT: 90000-99999

Line: 573 Category: 1 3

Diagnosis: DYSMENORRHEA

Treatment: MEDICAL THERAPY

ICD-9: 625.3

CPT: 90000-9999 9

Line: 5 7 4 Category: 1 3

Diagnosis: TIBIAL BURSITIS, OSTEOCHONDROPATHIES AND CONGENITAL DEFORMITIES OF KNEE

Treatment: MEDICAL THERAPY

CPT: 90000-9999 9

Line: 57 5 Category: 1 3

Diagnosis: EPICONDYLITIS AND RADIAL STYLOID TENOSYNOVITIS

Treatment: MEDICAL AND SURGICAL TREATMENT

[CD-9: 726.31-.32,727.0 4

Line: 57 6 Category: 1 3

Diagnosis: ROLYMYALGIA RHEUMATICA

Treatment: MEDICAL THERAPY

ICD-9: 725

CPT: 90000-9999 9

Line: 57 7 Category: 1 3
Appendix D-Prioritized Health Services List ● 285

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: RAYNAUD SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 443

CPT: 90000-99999

Line: 57 8 Category: 1 3

Diagnosis: REITE R

I

S DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 099.3

CPT: 90000-99999

Line: 579 Category: 13

Diagnosis: URTICARIA, CHRONIC

Treatment: MEDICAL THERAPY

I C D-9: 708,995. 1

CPT: 90000-99999,11000-11101

Line: 5 8 0 Category: 13

Diagnosis: KERATODERMA, ACQUIRED; ACQUIRED ACANTHOSIS NIGRICANS, STRIAE ATROPHICAE, OTHER AND UNSPECIFIED HYPERTROPHIC

AND ATROPHIC CONDITIONS OF SKIN

Treatment: MEDICAL THERAPY

ICD-9: 690,698,700,701.1-.3,701 .8,701.9,706.7

CPT: 11000- 101,11900,11950-54,90000-99999

Line: 581 Category: 13

Diagnosis: VERTIGINOUS SYNDROMES AND OTHER DISOROERS OF VESTIBULAR SYSTEM

Treatment: MEDICAL THERAPY

ICD-9: 386.0-.2,386.4-. 9

CPT: 90000-99999

Line: 58 2 Category: 1 3

Diagnosis: DISORDERS OF CERVICAL REGION

Treatment: CERVICAL LAMINECTOMY, MEDICAL THERAPY

ICD-9: 721.0,722.4,722.81,72 3

Line: 58 3 Category: 1 3

Diagnosis: ERYTHEMATOUS CONDITIONS: TOXIC, NODOSUM, ROSACEA, LUPUS

Treatment: MEDICAL THERAPY

ICD-9: 695.0,695.2-. 9

CPT: 90000-99999,11100-1110 1

Line: 58 4 Category: 1 3

Diagnosis: SPONDYLOSIS AND OTHER CHRONIC DISOROERS OF BACK

Treatment: MEDICAL AND SURGICAL TREATMENT

Line: 58 6 Category: 1 3

Diagnosis: ESOPHAGITIS

Treatment: MEDICAL THERAPY

ICD-9: 530.1

CPT: 90000-99999

Line: 58 7 Category: 13

Diagnosis: INTERVERTEBRAL DISC DISORDERS

Treatment: THORACIC-LUMBAR LAMINECTOMY, MEDICAL THERAPY

ICD-9: 722.0-.1,722.7,952.1-. 9

91,63170,63173,90000-99999

Line: 58 8 Category: 13
286 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: CHRONIC PROSTATITIS, OTHER DISORDERS OF PROSTATE

Treatment: MEDICAL THERAPY

ICD-9: 601.1,602

CPT: 90000-99999

Line: 58 9 Category: 13

Diagnosis: CHRONIC CYSTITIS

Treatment: MEDICAL THERAPY

[CD-9: 595.1-595. 3

CPT: 90000-99999

Line: 59 0 Category: 1 3

Diagnosis: IMPETIGO HERPETIFORMIS AND SUBCORNEAL PUSTULAR DERMATOSIS

Treatment: MEDICAL THERAPY

[co-9: 694.0-. 3

CPT: 90000-99999

Line: 591 Category: 1 3

Diagnosis: TRIGEMINAL NERVE DISORDERS

Treatment: MEDICAL & SURGICAL TREATMENT

ICD-9: 350

CPT: 64400,64600-64610,61450,61458,90000-99999

Line: 59 2 Category: 1 3

Diagnosis: MYASTHENIA GRAVIS

Treatment: MEDICAL THERAPY, THYMECTOMY

ICD-9: 358

CPT: 90000-99999,60520

Line: 59 3 Category: 13

Diagnosis: SPRAINS, STRAINS AND NON-ALLOPATHIC SPINAL LESIONS: THORACIC, LUMBAR AND SACRUM ACUTE

Treatment: MEDICAL THERAPY

CPT: 90000-9999 9

Line: 59 4 Category: 1 4

Diagnosis: HORDEOLUM AND OTHER DEEP INFLAMMATION OF EYELID; CHALAZION

Treatment: INCISION AND DRAINAGE/MEDICAL THERAPY

IcD-9: 373.1-.2

Line: 595 Category: 14

Diagnosis: LABYRINTHITIS

Treatment: MEDICAL THERAPY

ICD-9: 386. 3

CPT: 90000-9999 9

Line: 59 6 Category: 1 4

Diagnosis: VIRAL HEPATITIS

Treatment: MEDICAL THERAPY

ICD-9: 070

CPT: 90000-9999 9

Line: 59 7 Category: 1 4

Diagnosis: ANOVULATION (INFERTILITY)

Treatment: MEDICAL THERAPY

[CD-9: 621 .3,626.0-.1,628. 0

Line: 59 8 Category: 1 5

Diagnosis: HYDROCELE

Treatment: MEDICAL THERAPY, EXCISION

ICD-9: 603

Line: 59 9 Category: 11

Diagnosis: ABSENCE OF BREAST AFTER MASTECTOMY AS TREATMENT FOR NEOPLASM

Treatment: BREAST RECONSTRUCT

ICD-9: 176,217,233.0,238. 3

Line: 60 0 Category: 11
Appendix D--Prioritized Health Services List ● 287

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: SPASTIC DYSPHONIA

Treatment: MEDICAL THERAPY

[CD-9: 478.79

CPT: 90000-99999

Line: 60 1 Category: 11

Diagnosis: FEMALE INFERTILITY OF CERVICAL ORIGIN, MALE INFERTILITY

Treatment: ARTIFICIAL INSEMINATION, MEDICAL THERAPY

ICD-9: 628.8-.9,60 6

CPT: 90000-99999,58310-58311

Line: 60 2 Category: 15

Diagnosis: TUBAL DISEASE

Treatment: MICROSURGERY

ICD-9: 256,628.2-. 4

CPT: 58700,58740-70

Line: 60 3 Category: 15

Diagnosis: KELOID SCAR; OTHER ABNORMAL GRANULATION TISSUE

Treatment: INTRALESIONAL INJECTIONS/DESTRUCTION/EXCISION

ICD-9: 701 .4-.5

CPT: 11900- 11901,17000-17105,1 1200-11446

Line: 60 4 Category: 1 7

Diagnosis: CONJUNCTIVAL CYST

Treatment: EXCISION OF CONJUNCTIVAL CYST

ICD-9: 372.75

CPT: 68110

Line: 605 Category: 1 7

Diagnosis: HEPATORENAL SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 572.4

CPT: 90000-99999

Line: 60 6 Category: 3

Diagnosis: OTHER DEFICIENCIES OF CIRCULATING ENZYMES (ALPHA 1-ANTITRYPSIN DEFICIENCY)

Treatment: LUNG TRANSPLANT

1(X)-9: 277.6

CPT: 33935

Line: 60 7 Category: 5

Diagnosis: LETHAL MIDLINE GRANULOMA

Treatment: MEDICAL THERAPY

ICD-9: 446.3

CPT: MEDICAL THERAPY

Line: 60 8 Category: 5

Diagnosis: AMYOTROPHIC LATERAL SCLEROSIS (ALS)

Treatment: MEDICAL THERAPY

ICD-9: 335.20,335.22-.29

CPT: 90000-999999

Line: 609 Category: 5

Diagnosis: CANCER OF LIVER AND INTRAHEPATIC BILE DUCTS

Treatment: LIVER TRANSPLANT

ICD-9: 1 5 5

CPT: 47135

Line: 6 1 0 Category: 5

Diagnosis: HEMATOMA OF AURICLE OR PINNA AND HEMATOMA OF EXTERNAL EAR

Treatment: DRAINAGE

ICD-9: 216.2,380.0,380.31

CPT: 69000-20

Line: 61 1 Category: 1 0

Diagnosis: ENOPHTHALMOS

Treatment: REVISION

ICD-9: 376.5

CPT: 67400

Line: 61 2 Category: 10
288 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: ACUTE LYMPHADENITIS

Treatment: INCISION AND DRAINAGE

ICD-9: 683

CPT: 10060

Line: 61 3 Category: 10

Diagnosis: CONGENITAL ANOMALIES OF FEMALE GENITAL ORGANS

Treatment: SURGICAL TREATMENT

ICD-9: 752.0-.3,752.4 1

Line: 61 4 Category: 11

Diagnosis: GENERALIZED CONVULSIVE OR PARTIAL EPILEPSY WITHOUT MENTION OF IMPAIRMENT OF CONSCIOUSNESS

Treatment: FOCAL SURGERY

ICD-9: 345.1,345. 5

CPT: 61720,61533-61536

Line: 61 5 Category: 11

Diagnosis: VARICOSE VEINS OF LOWER EXTREMITIES

Treatment: STRIPPING/SCLEROTHERAPY

ICD-9: 454

Line: 61 6 Category: 1 1

Diagnosis: DISEASE OF CAPILLARIES

Treatment: EXCISIO N

ICD-9: 448.1-. 9

CPT: 11400-1142 6

Line: 61 7 Category: 1 1

Diagnosis: ANOMALIES OF RELATIONSHIP OF JAW TO CRANIAL BASE, MAJOR ANOMALIES OF JAW SIZE, OTHER SPECIFIED AND

UNSPECIFIED DENTOFACIAL ANOMALIES

Treatment: OSTEOPLASTY, MAXILLA/MANDIBLE

ICD-9: 524.0- .2,524.5,524.85,524. 9

Line: 61 8 Category: 1 1

Diagnosis: CONGENITAL ANOMALIES OF THE EAR WITHOUT IMPAIRMENT OF HEARING

Treatment: OTOPLASTY, REPAIR & AMPUTATION

ICD-9: 744.1-. 3

CPT: 69300,69110

Line: 61 9 Category: 1 1

Diagnosis: TMJ DISORDER

Treatment: TMJ SPLINTS

ICD-9: 524. 6

CPT: 90000-9999 9

Line: 62 0 Category: 1 3

Diagnosis: TMJ DISORDERS

Treatment: TMJ SURGERY

Line: 621 Category: 11

Diagnosis: DISEASE OF NAILS, HAIR AND HAIR FOLLICLES

Treatment: MEDICAL THERAPY

ICD-9: 703.8- .9,704.0,704.2-.9,757.4- . 5

CPT: 11900, 11700-11765,11000-11001 ,90000-99999

Line: 62 2 Category: 1 3

Diagnosis: CIRCUMSCRIBED SCLERODERMA

Treatment: MEDICAL THERAPY

ICD-9: 701. 0

CPT: 90000-99999,11900-1190 1

Line: 62 3 Category: 13
Appendix D-Prioritized Health Services List ● 289

I

PRIORITIZED HEALTH SE RVICES LIST OF MAY 1, IW1

CAVUS DEFORMITY OF FOOT

MEDICAL THERAPY, ORTHOTIC

736.73

90000-99999

624 Category: 1 3

CERVICAL RIB

SURGICAL TREATMENT

756. 2

21615-16,21705

625 Category: 11

ERYTHROPLAKIA, LEUKOEDEMA OF MOUTH OR TONGUE

MEDICAL THERAPY

528. 7

90000-99999

626 Category: 1 3

CHRONIC CONJUNCTIVITIS, ELEPHAROCON JUNCTIVITIS

MEDICAL THERAPY

372.1-372. 3

90000-99999

627 Category: 1 3

DERMATOPHYTOSIS

MEDICAL THERAPY

110-111

90000-99999,11100

628 Category: 1 3

KERATITIS: SUPERFICIAL U/O CONJUNCTIVITIS, CERTAIN TYPES, OTHER AND UNSPECIFIED K-CONJUNCTIVITIS,

INTERSTITIAL & DEEP, CORNEAL NEOVASCULARIZATION, OTHER AND UNSPECIFIEO FORMS

MEDICAL THERAPY

370.2-370. 9

90000-99999

629 Category: 1 3

DISORDERS OF SYNOVIUM, TENDON AND BURSA; DISORDERS OF SOFT TISSUE AND JOINTS

MEDICAL THERAPY

630 Category: 13

TENDINITIS AND BURSITIS

MEDICAL AND SURGICAL THERAPY

631 Category: 14

BLEPHARITIS

MEDICAL THERAPY

373.0

90000-99999

632 Category: 13

XEROSIS

MEDICAL THERAPY

706.8

9OOOO-99999,11OOO-111O1

633 Category: 13

OBESITY

NUTRITIONAL AND LIFE STYLE COUNSELING

278

90000-99999

634 Category: 13
290 . Evaluation of the Oregon Medicaid Proposal

DISORDERS OF FUNCTION OF

MEDICAL THERAPY

536,564

90000-99999

635 Category:

LICHEN PLANUS

MEDICAL THERAPY

697

90000-99999, 11900-11901

636 Category:

MONONEUROPATHY

MEDICAL THERAPY

354.0,354.2-. 9

90000-99999

637 Category:

POSTCONCUSSION SYNDROME

MEDICAL THERAPY

310.2

90000-99999

638 Category:

PRIORITIZED HEALTH

STOMACH AND OTHER

13

13

13

13

HERPES SIMPLEX WITHOUT COMPLICATIONS

MEDICAL THERAPY

054.0,054.2,054.6,054.8-.9

90000-99999

639 Category: 13

SERVICES LIST OF MAY 1, 1991

FUNCTIONAL DIGESTIVE DISORDERS

OTOSCLEROSIS

MEDICAL THERAPY

3 8 7

90000-9999 9

641 Category: 1 3

PERIPHERAL ENTHESOPATHIES

MEDICAL THERAPY

726.30- .32,726.4-.6,726.70,726.8,726.90

90000-99999

642 Category: 13

CHRONIC BRONCHITIS

MEDICAL THERAPY

490-491,493.9

90000-99999

643 Category: 13

SARCOIDOSIS

MEDICAL THERAPY

135

90000-99999

644 Category: 13

BENIGN INTRACRANIAL HYPERTENSION

MEDICAL THERAPY

348. 2

90000-9999 9

645 Category: 1 3

LYMPHEDEMA

MEDICAL THERAPY, OTHER OPERATION ON LYMPH CHANNEL

457,140-144

90000-99999, 38300-38308,38382-38555,38700- 38761

646 Category: 13
Appendix D--Prioritized Health Services List . 291

PRIORITIZED HEALTH SERVICES LIST OF HAY 1, 1991

Diagnosis: PHLEBITIS AND THROMBOPHLEBITIS, SUPERFICIAL

Treatment: MEDICAL THERAPY

ICD-9: 451

CPT: 90000-99999

Line: 64 7 Category: 1 3

Diagnosis: SYNOVITIS AND TENOSYNOVITIS

Treatment: MEDICAL THERAPY

ICD-9: 727.0

CPT: 90000-99999,20550

Line: 64 8 Category: 1 4

Diagnosis: DIAPER OR NAPKIN RASH

Treatment: MEDICAL THERAPY

ICD-9: 691.0

CPT: 9oooo-99999,11100

Line: 64 9 Category: 1 4

Diagnosis: ORAL APHTHAE

Treatment: MEDICAL THERAPY

[CD-9: 528.2

CPT: 90000-99999

Line: 65 0 Category: 1 4

Diagnosis: DERMATITIs DUE TO SUBSTANCES TAKEN INTERNALLY

Treatment: MEDICAL THERAPY

[CD-9: 693

CPT: 90000-99999,11100

Line: 65 1 Category: 1 4

Diagnosis: FOOD ALLERGY

Treatment: MEDICAL THERAPY

ICD-9: 692.5

CPT: 90000-99999

Line: 65 2 Category: 1 3

Diagnosis: SPRAINS OF JOINTS AND ADJACENT MUSCLES

Treatment: MEDICAL THERAPY

Line: 65 3 Category: 1 4

Diagnosis: SUBLINGUAL, SCROTAL, AND PELVIC VARICES

Treatment: VENOUS INJECTION, VASCULAR SURGERY

ICD-9: 456.3-. 5

Line: 65 4 Category: 11

Diagnosis: SPRAIN/STRAIN OF ACHILLES TENDON

Treatment: MEDICAL THERAPY

ICD-9: 845.09

CPT: 90000-99999

Line: 65 5 Category: 1 4

Diagnosis: FRACTURE OF VERTEBRAL COLUMN WITHOUT SPINAL CORD INJURY, SACRUM AND COCCYX

Treatment: LAMINECTOMY

ICD-9: 805.6-805. 9

CPT: 22845,61720-61793

Line: 65 6 Category: 1 4

Diagnosis: ACUTE URTICARIA

Treatment: MEDICAL THERAPY

ICD-9: 708,995.1

CPT: 90000-99999

Line: 65 7 Category: 1 4

Diagnosis: CANDIDIASI S

Treatment: MEDICAL THERAPY

[CD-9: 112.0,112. 3

CPT: 90000-9999 9

Line: 65 8 Category: 14
292 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF HAY 1, 1991

Diagnosis: SCLERITIS & EPISCLERITIS

Treatment: MEDICAL THERAPY

ICD-9: 379.0

CPT: 90000-99999

Line: 65 9 Category: 14

Diagnosis: INTERNAL INFECTIONS AND OTHER BACTERIAL FOOD POISONING

Treatment: MEDICAL THERAPY

CPT: 90000-99999

Line: 66 0 Category: 1 4

Diagnosis: OPEN WOUND OF INTERNAL STRUCTURES OF MOUTH U/O COMPLICATION

Treatment: REPAIR SOFT TISSUES

ICD-9: 873.6

Line: 661 Category: 1 4

Diagnosis: VIRAL, SELF-LIMITING ENCEPHALITIS, MYELITIS AND ENCEPHALOMYELITIS

Treatment: MEDICAL THERAPY

I C D-9: 056.0,32 3

CPT: 90000-9999 9

Line: 66 2 Category: 1 4

Diagnosis: ACUTE TONSILLITIS

Treatment: MEDICAL THERAPY

IcD-9: 46 3

CPT: 90000-9999 9

Line: 6 6 3 Category: 1 4

Diagnosis: ERYTHEMA MULTIFORME

Treatment: MEDICAL THERAPY

Ire-9: 695. 1

Line: 66 4 Category: 1 4

Diagnosis: CENTRAL SEROUS RETINOPATHY

Treatment: LASER SURGERY

ICD-9: 362.41

CPT: 67210

Line: 66 5 Category: 1 4

Diagnosis: VULVAL VARICES

Treatment: VASCULAR SURGERY

lCD-9: 456. 6

CPT: 37799

Line: 66 6 Category: 1 4

Diagnosis: ASEPTIC MENINGITIS

Treatment: MEDICAL THERAPY

ICD-9: 047-04 9

CPT: 90000-9999 9

Line: 66 7 Category: 1 4

Diagnosis: INFECTIOUS MONONUCLEOSIS

Treatment: MEDICAL THERAPY

lCD-9: 075

CPT: 90000-99999

Line: 66 8 Category: 1 4

Diagnosis: OTHER NONFATAL VIRAL INFECTIONS

Treatment: MEDICAL THERAPY

CPT: 90000-9999 9

Line: 66 9 Category: 1 4

Diagnosis: ACUTE PHARYNGITIS AND LARYNGITIS AND OTHER DISEASES OF VOCAL CORDS

Treatment: MEDICAL THERAPY

ICD-9: 462,478.5

CPT: 90000-99999

Line: 67 0 Category: 14
Appendix D--Prioritized Health Services List ● 293

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: PREVENTIVE SERVICES FOR ADULTS WITH QUESTIONABLE OR NO PROVEN EFFECTIVENESS

Treatment: MEDICAL THERAPY

ICD-9: O

CPT: 90000-99999

Line: 67 1 Category: 1 6

Diagnosis: OLD LACERATION OF CERVIX AND VAGINA

Treatment: MEDICAL THERAPY

ICD-9: 622.38624.4

CPT: 90000-99999

Line: 67 2 Category: 1 7

Diagnosis: BENIGN NEOPLASMS OF SKIN

Treatment: MEDICAL THERAPY

ICD-9: 210,214,216,221 ,222.1,222.4

Line: 67 3 Category: 1 7

Diagnosis: REDUNDANT PREPUCE AND PHIMOSIS

Treatment: MEDICAL THERAPY, DILATION

ICD-9: 605

CPT: 54150-61,90000-99999

Line: 674 Category: 17

Diagnosis: VITILIGO, CONGENITAL PIGMENTARY ANOMALIES OF SKIN

Treatment: MEDICAL THERAPY

ICD-9: 709.0,757.3,757. 9

CPT: 90000-99999

Line: 67 5 Category: 1 7

Diagnosis: DENTAL SERVICES (MARGINAL IMPROVEMENT)

Treatment: RESTORtATIVE DENTAL SERVICE

ICD-9: o

Line: 6 7 6 Category: 17

Diagnosis: SEB0RRHEIC KERATOSIS, DYSCHROMIA, AND VASCULAR DISORDERS, SCAR CONDITIONS, AND FIBROSIS OF SKIN

Treatment: MEDICAL THERAPY

ICD-9: 702,709.1-.3,709.8-.9

CPT: 11000, 11050,17000,90000-99999

Line: 67 7 Category: 1 7

Diagnosis: VIRAL WARTS

Treatment: MEDICAL THERAPY, CRYOSURGERY

ICD-9: 078.1

Line: 67 8 Category: 1 7

Diagnosis: UPPER EXTREMITY: FINGERTIP EVULSION W/O PEDICLE GRAFT

Treatment: REPAIR

ICD-9: 883.1,883.2

CPT: 12401

Line: 679 Category: 17

Diagnosis: AGENESIS OF LUNG

Treatment: MEDICAL THERAPY

ICD-9: 748. 5

CPT: 9oooo-99999

Line: 68 0 Category: 1 7

Diagnosis: GALLSTONES WITHOUT CHOLECYSTITIS

Treatment: MEDICAL THERAPY, CHOLECYSTECTOMY

ICD-9: 574.2,575. 6

CPT: 90000-99999,47490,47600-20,49000

Line: 68 1 Category: 1 7
294 . Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: SIMPLE AND UNSPECIFIED GOITER, NONTOXIC NODULAR GoITER

Treatment: MEDICAL THERAPY

ICD-9: 260-241

CPT: 90000-99999

Line: 68 2 Category: 1 7

Diagnosis: SICCA SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 710.2

CPT: 90000-99999

Line: 68 3 Category: 1 7

Diagnosis: TRAUMATIC BRAIN INJURY, STATIC DEMENTIA, BRAIN ANOXIA DUE TO INFECTION OR TRAUMA

Treatment: MEDICAL THERAPY

CPT: 61107,90000-99999

Line: 68 4 Category: 1 7

Diagnosis: ICHTHYOSIS

Treatment: MEDICAL THERAPY

ICD-9: 757.1

CPT: 90000-99999

Line: 68 5 Category: 1 7

Diagnosis: PROGRESSIVE DEMENTIA, ORGANIC BRAIN SYNDROME

Treatment: MEDICAL THERAPY

ICD-9: 046. 1,090.40,094.1,290,294. 1,310,331

CPT: 90000-99999

Line: 68 6 Category: 1 7

Diagnosis: INTRAVENTRICULAR AND SUBARACHNOID HEMORRHAGE OF FETUS OR NEONATE

Treatment: MEDICAL THERAPY

ICO-9: 772.1-. 2

CPT: 90000-99999

Line: 68 7 Category: 2

Diagnosis: CANCER OF VARIOUS SITES WITH DISTANT METASTASIS WHERE TREATMENT WILL NOT RESULT IN A 10% 5 YEAR SURVIVAL

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 140-198

61546-68,90000-99999

Line: 68 8 Category: 1 7

Diagnosis: SENSORINEURAL HEARING LOSS

Treatment: COCHLEAR IMPLANT

ICD-9: 389.1

CPT: 69930

Line: 68 9 Category: 11

Diagnosis: ALCOHOLIC CIRRHOSIS OF LIVER

Treatment: LIVER TRANSPLANT

ICD-9: 571. 2

CPT: 47135

Line: 69 0 Category: 5

Diagnosis: NON-HODGKIN’S LYMPHOMAS

Treatment: BONE MARROW TRANSPLANT (5-6 LOCI MATCH)

ICD-9: 200,202.0- .2,202.8-.9

CPT: 38230-41

Line: 691 Category: 5

Diagnosis: OBESIT Y

Treatment: GASTROPLASTY

ICD-9: 278

CPT: 43845

Line: 69 2 Category: 11

Diagnosis: CONGENITAL CYSTIC LUNG - SEVERE

Treatment: LUNG RESECTION

[CD-9: 748.4

CPT: 32500

Line: 693 Category: 1 7
Appendix D--Prioritized Health Services List ● 295

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

Diagnosis: BENIGN POLYPS OF VOCAL CORDS

Treatment: MEDICAL THERAPY

ICD-9: 478. 4

CPT: 90000-9999 9

Line: 694 Category: 1 0

Diagnosis: ACUTE UPPER RESPIRATORY INFECTIONS AND COMMON COLD

Treatment: MEDICAL THERAPY

I C D-9: 460,46 5

CPT: 90000-99999

Line: 69 5 Category: 1 4

— $142.44 Per Capita Cost Per Month —

Diagnosis: TUBAL DYSFUNCTION AND OTHER CASES OF INFERTILITY

Treatment: IN-VITRO FERTILIZATION, GIFT

ICD-9: 256

CPT: 58970-76

Line: 69 6 Category: 1 5

Diagnosis: DENTAL SERVICES (EG. OBSOLETE TREATMENTS FOR VARIOUS CONDITIONS)

Treatment: RESTORATIVE DENTAL SERVICE

ICD-9: O

Line: 69 7 Category: 1 7

Diagnosis: UNCOMPLICATED HEMORRHOIDS

Treatment: HEMORRHOIDECTOMY

ICD-9: 455.0,455.3,455 .6,455. 9

Line: 69 8 Category: 1 7

Diagnosis: MINOR HEAD INJURY: HEMATOMA/EDEMA W/ NO/BRIEF LOSS OF CONSCIOUSNESS

Treatment: MEDICAL THERAPY

ICD-9: 851.02,851.12,851.82,851 .92,851 .42,851.52,850.9

CPT: 90000-9999 9

Line: 69 9 Category: 1 7

Diagnosis: GYNECOMASTIA

Treatment: MASTOPEXY

ICD-9: 611.1

CPT: 19316

Line: 70 0 Category: 1 7

Diagnosis: CYST OF KIDNEY, ACQUIRED

Treatment: MEDICAL AND SURGICAL TREATMENT

ICD-9: 593. 2

CPT: 50010,50390,90000-99999

Line: 701 Category: 17

Diagnosis: END STAGE HIV DISEASE

Treatment: MEDICAL THERAPY

ICD-9: 042-04 3

CPT: 90000-9999 9

Line: 702 Category: 1 7

Diagnosis: CHRONIC PANCREATITIS

Treatment: SURGICAL TREATMENT

ICD-9: 577.1

CPT: 48000,48999,49000

Line: 70 3 Category: 1 7

Diagnosis: SUPERFICIAL WOUNDS WITHOUT INFECTION AND CONTUSIONS

Treatment: MEDICAL THERAPY

.6, .8,916.0, .2,.4,.6, .8,917.0, .2,.4,.6,.8,919. 0,.2,.4,.6,.8,920-92 4

Line: 704 Category: 1 7
296 ● Evaluation of the Oregon Medicaid Proposal

PRIORITIZED HEALTH SERVICES LIST OF MAY 1, 1991

CONSTITUTIONAL APLASTIC ANEMIA

MEDICAL THERAPY

284.0

90000-99999

705 Category: 1 7

PROLAPSED URETHRAL MUCOSA

SURGICAL TREATMENT

599.5

51840-41

706 Category: 11

CENTRAL RETINAL ARTERY OCCLUSION

PARACENTESIS OF AQUEOUS

362.31

67015,67505

707

EXTREMELY LOU

LIFE SUPPORT

765.0,765.11

0

708

ANENCEPHALOUS

LIFE SUPPORT

740,742.2

0

709

Category: 1 7

BIRTH WEIGHT (UNDER 500 GM) AND UNDER 23 WEEK GESTATION

Category: 1 7

AND SIMILAR ANOMALIES AND REDUCTION DEFORMITIES OF THE BRAIN

Category: 1 7

— S145.15 Per Cavita .

 Cost Per Month —
Appendix D--Prioritized Health Services List . 297

CONDITI0N

ABORT 10N

MISSED

NON-SPONTANEOUS

SPONTANEOUS, COMPLICATED BY

INFECTION AND/OR HEMORRHAGE

SPONTANEOUS, UNCOMPLICATED

ABSCESS

BARTHOLIN’S GLAND

BURSA

INTESTINE

INTRASPINAL AND INTRACRANIAL

KIDNEY

LIVER

LUNG

ORAL SOFT TISSUE

PERITONSILLAR

PROSTATE

SALIVARY GLANDS

TENDON

VULVA

ABSENCE

BREAST AFTER MASTECTOMY

VAGINA (CONGENITAL)

ABUSE, PHYSICAL AND SEXUAL

(INCLUDING RAPE)

ACANTHOSIS NIGRICANS (ACQUIRED)

ACCIDENTS INVOLVING EXPOSURE TO

NATURAL ELEMENTS

ACNE

ACROMEGALY

ACTINOMYCOTIC INFECTIONS

ADDISON’S DISEASE

ADHESION, PERITONEAL

AFTER-CATARACT

AGENESIS OF LUNG

AGRANULOCYTOSIS

AMEBIASIS

AMPUTATION, TRAUMATIC

ARM(S) & HAND(S)

FOOT/FEET

LEG(S)

THUMB/FINGER

TOE

AMYOTROPHIC LATERAL SCLEROSIS

ANAPHYLACTIC SHOCK DUE TO FOOD, DRUG

OR OTHER NON-VENOMOUS SOURCE

ANEMIA

APLASTIC

DUE TO DISEASE OR TREATMENT

CONSTITUTIONAL

BONE MARROW TRANSPLANT

MEDICAL THERAPY

OTHER SPECIFIED

UNSPECIFIED

DUE TO ISOIMMUNIZATION

HEMOLYTIC

ACQUIRED

HEREDITARY

OF PREMATURITY

PERNICIOUS

ANENCEPHALOUS

ANEURYSM

ARTERY, PERIPHERAL

DISSECTING OR RUPTURED

NECK, ARTERIAL

NON-DISSECTING WITHOUT RUPTURE

PULMONARY ARTERY

ANGINA PECTORIS

ANOMALIES

BILE DUCTS

CIRCULATORY SYSTEM (CONGENITAL)

LINE

531

323

105

531

351

394

111

128

14

223

8 0

489

5 7

395

269

394

351

600

4 0 9

156

581

121

392

226

108

180

508

341

680

249

222

134

141

140

349

563

609

15

260

307

181

214

705

19

191

160

45

247

709

313

122

208

194

129

177

525

367

INDEX

CONDITION

—

ANOMALIES (CON’T)

CORONARY ARTERY

DIGESTIVE SYSTEM EXCLUDING

NECROSIS (CONGENITAL)

EAR

WITH IMPAIRMENT OF HEARING

WITHOUT IMPAIRMENT OF

HEARING (CONGENITAL)

FEMALE GENITAL ORGANS (CONGENITAL)

GALLBLADDER

HEART, CONGENITAL

HEART TRANSPLANT

SURGICAL TREATMENT

JAW-CRANIAL RELATIONSHIP

AND JAW SIZE

LIVER

TONGUE

UPPER ALIMENTARY TRACT,

EXCLUDING TONGUE (CONGENITAL)

URINARY SYSTEM (CONGENITAL)

ANOMALOUS PULMONARY VENOUS

CONNECTION, TOTAL

ANOVULATION (INFERTILITY)

ANOXIA OF BRAIN DUE TO

INFECTION OR TRAUMA

APHAKIA

APHTHAE, ORAL

APPENDICITIS

ARRHYTHMIAS

LIFE-THREATENING

NON LIFE-THREATENING

ARTERITIS, GIANT CELL

ARTHRITIS

PYOGENIC

RHEUMATOID

ARTHROPLASTY

MEDICAL THERAPY

ARTHROPATHIES, CRYSTAL

ASTHMA

ATELECTASIS (COLLAPSE OF LUNG)

ATHEROSCLEROSIS

PERIPHERAL

AMPUTATION

SURGICAL TREATMENT

VISCERAL

ATRESIA

PULMONARY VALVE (CONGENITAL)

TRICUSPID VALVE (CONGENITAL)

ATROPHIC CONDITIONS OF SKIN

LINE

182

124

436

619

614

525

367

442

618

525

541

146

183

184

598

684

345

650

5

53

293

320

37

399

400

402

151

528

253

415

372

193

199

581

ATROPHY OF ALVEOLAR RIDGE (EDENTULOUS) 543

AVULSION OF FINGERTIP U/O PEDICLE GRAFT 679

BALANOPOSTHITIS 455

BELL’S PALSY 458

BILIARY ATRESIA 365

BIRTH CONTROL

CONTRACEPTION MANAGEMENT 163

TUBAL LIGATION 162

VASECTOMY 161

BIRTH TRAUMA FOR BABY 42

BIRTH, IMMATURE

500 GRAMS AND OVER 27

UNDER 500 GRAMS AND

UNDER 23 WEEK GESTATION 708

BLASTOMYCOTIC INFECTION 127

BLEPHARITIS 632

BLEPHAROCON JUNCTIVITIS (CHRONIC) 627

BONE SPUR 457

BOTULISM 109

BOWING OF LEGS (CONGENITAL) 558

BRONCHITIS (CHRONIC) 643

BUDD-CHIARI SYNDROME 254

328-308 0 - 92 - 11
298 . Evaluation of the Oregon Medicaid Proposal

CONDITI0N L INE

BURN

WITH VITAL SITE, LESS

THAN 10% OF BODY SURFACE

FULL THICKNESS

GREATER THAN 10% OF BODY SURFACE

MINOR

PARTIAL THICKNESS

GREATER THAN 30% OF BODY SURFACE

WITH VITAL SITE

WITHOUT VITAL SITE, 10-30%

OF BODY SURFACE

BURSITIS

TIBIAL

CALCULUS

BILE DUCT WITH OTHER CHOLECYSTITIS

BLADDER

KIDNEY

URETER

CANCER

TREATABLE

ANUS

BILIARY TRACT

BONES

BRAIN

BREAST

BRONCHUS

CERVIX

COLON

ENDOCRINE GLANDS

BONE MARROW TRANSPLANT

MEDICAL & SURGICAL TREATMENT

ESOPHAGUS

EYE

FEMALE GENITAL ORGANS

GALLBLADDER

LARYNX

LIVER

LIVER TRANSPLANT

MEDICAL & SURGICAL TREATMENT

LUNG

MALE GENITAL ORGANS

MEDIASTINUM

MESENTERY

NERVOUS SYSTEM

NOSE

OMENTUM

ORAL CAVITY

ORBIT

OVARY

PANCREAS

PENIS

PERITONEUM

PHARYNX

PLEURA

PROSTATE GLAND

RECTUM

RESPIRATORY ORGANS

RETROPERITONEUM

SKIN, EXCLUDING MALIGNANT

MELANOMA

SMALL INTESTINE

SOFT TISSUE

STOMACH

TESTIS

TRACHEA

URINARY SYSTEM

UTERUS

VAGINA

VULVA

UNTREATABLE, VARIOUS SITES WITH

DISTANT METASTASIS

115

117

533

136

115

4 9

631

575

155

418

418

419

245

513

221

371

172

235

169

245

524

178

500

206

204

513

265

610

521

235

215

235

262

371

265

262

265

206

179

526

215

262

265

235

258

245

235

262

257

245

207

240

174

235

205

186

204

204

688

CONDITION LINE

CANCRUM ORIS 9 3

CANDIDAL

ENDOCARDITIS 94

MENINGITIS 94

CANDIDIASIS 658

DISSEMINATE 94

LUNG 94

NEONATAL 315

CAPSULITIS, ADHESIVE (SHOULDER) 485

CARCINOMA IN SITU

CERVIX 171

SKIN 267

CARDIOMYOPATHY

CARDIAC TRANSPLANT 367

MEDICAL & SURGICAL TREATMENT 246

CARIES, DENTAL (PERIAPICAL INFECTION) 479

CARPAL TUNNEL SYNDROME 446

CATARACT 337

CAVUS DEFORMITY OF FOOT (ACQUIRED) 624

CELLULITIS

NON-ORBITAL 389

ORAL SOFT TISSUE 489

ORBITAL (ACUTE) 9

CERVICAL RIB 625

CERVICITIS 437

CESTODE INFECTION 279

CHALAZION 595

CHOLERA 9 8

CHOLESTEATOMA 356

CHONDROMALACIA 566

CIRRHOSIS

BILIARY TRACT NONALCOHOLIC 366

LIVER

ALCOHOLIC 690

NONALCOHOLIC 366

CLEFT

L I P 377

PALATE 378

WITH AIRWAY OBSTRUCTION 75

WITH CLEFT LIP 379

COAGULATION, INTRAVASCULAR,

DISSEMINATED 102

COARCTATION OF THE AORTA

BALLOON DILITATION 304

SURGICAL TREATMENT 175

VALVE REPLACEMENT 304

127

COLITIS, NONINFECTIOUS 107

COMA

HEPATIC 223

NEWBORN 103

COMFORT CARE 164

COMMON COLD 695

COMMON TRUNCUS 188

COMMON VENTRICLE 324

COMPLICATION, MECHANICAL OF INTERNAL

ORTHOPEDIC AND PROSTHETIC DEVICE,

IMPLANT AND GRAFT 556

CONJUNCTIVITIS

ACUTE 358

ALLERGIC 534

CHRONIC 627

NEONATAL 315

CONTRACTURE OF PALMAR FASCIA 446

CONTUSION OF LUNG 70

CONVULSIONS IN NEWBORN 125

CORNEAL ULCER 539

COXA VARA & VALGA (CONGENITAL) 555

CROUP SYNDROME 8

CRUSH INJURIES 119

CUSHING’S SYNDROME 286
Appendix D--Prioritized Health Services List ● 299

CONDITI0N L INE

-- -—

CYST

BARTHOLIN’S GLAND 351

BRAIN, BENIGN 220

BRANCHIAL (CLEFT) 542

CONJUNCT I VA 605

KIDNEY (ACQUIRED) 701

ORAL SOFT TISSUES 488

ORBITAL 461

OVARIAN

MEDICAL THERAPY 437

OOPHORECTOMY 498

PANCREAS 370

PILONIDAL WITH ABSCESS 352

THYROID 460

VULVA 351

CYSTIC FIBROSIS 248

CYSTIC LUNG, CONGENITAL

MILD/MODERATE 212

SEVERE 693

CYSTICERCOSIS 279

CYSTITIS (CHRONIC) 590

DACRYOCYSTITIS, NEONATAL 315

DEFECT

ATRIAL SEPTAL, PRIMUM 251

ATRIAL SEPTAL, SECUNDUM 250

COAGULATION 187

ENDOCARDIAL CUSHION 196

VENTRICULAR SEPTAL 256

DEFICIENCIES OF CIRCULATING ENZYMES

(ALPHA 1-ANTITRYPSIN DEFICIENCY)

LUNG TRANSPLANT 607

MEDICAL THERAPY 511

DEFORMITIES

FOOT 450

HEAD 62

KNEE

CONGENITAL

ARTHROSCOPIC REPAIR 559

MEDICAL THERAPY 575

OSTEOTOMY 558

NOSE (ACQUIRED) 484

REDUCTION

BRAIN 709

LOWER LIMB 430

SPINE 544

UPPER BODY & LIMBS 447

DEGENERATIONS

BRAIN, USUALLY MANIFEST

IN CHILDHOOD 519

GLOBE 403

MACULA AND POSTERIOR POLE 333

DELIRIUM

DRUG 9 9

WITHDRAWAL, ALCOHOLIC 142

DEMENTIA

PROGRESSIVE 686

STATIC 684

TREATABLE 230

DENTAL SERVICES

EG. DENTAL CARIES, FRACTURED TOOTH 398

EG. INFECTIONS 165

EG. INSUFFICIENT ROOM TO

RESTORE TOOTH 550

EG. MALPOSITIONED TOOTH 549

EG. OBSOLETE TREATMENTS FOR

vARIOUS CONDITIONS 697

EG. TOOTH LOSS 548

MARGINAL IMPROVEMENT PROVIDED 676

PREVENTIVE 166

DEPRESSION, CEREBRAL OF NEWBORN 103

DERANGEMENT OF KNEE, INTERNAL 553

CONDITION LINE

DERMATITIS

ATOPIC 390

CONTACT 391

DUE TO SUBSTANCES TAKEN INTERNALLY 651

DERMATOMYOSITIS 321

DERMATOPHYTOSIS 628

DERMATOSES, BULLOUS 224

DERMATOSIS, PUSTULAR SUBCONEAL 591

DETACHMENT, RETINAL WITH DEFECT 338

DEVIATED NASAL SEPTUM 484

DIABETES INSIPIDUS 284

DIABETES MELLITUS

U/PERIPHERAL CIRCULATORY DISORDER 253

WITH END STAGE RENAL DISEASE 512

NON-INSULIN DEPENDENT 153

TYPE I 150

DIAPER RASH 649

DIAPHYSITIS 568

DISACCHARIDASE, INTESTINAL 198

DISEASE

ADENOIDS (CHRONIC) 494

AORTIC VALVE 200

ARTHROPOD-BORNE

OTHER 55

VIRAL 114

CAPILLARIES 617

CENTRAL NERVOUS SYSTEM 384

CONNECTIVE TISSUE, DIFFUSE 295

ENDOCARDIUM 277

FALLOPIAN TUBES 603

HAIR AND HAIR FOLLICLES 622

HARD TISSUES OF TEETH (AVULSION) 551

HEART

ISCHEMIC (CHRONIC) 177

PULMONARY (CHRONIC) 367

INFECTIOUS (CONGENITAL) 361

LARYNX 478

LIPS 489

LUNG, OCCUPATIONAL 501

MITRAL VALVE 202

NAILS 622

PHARYNX INCLUDING RETROPHARYNGEAL

ABSCESS 32

PULMONARY

CIRCULATION 367

HEART (ACUTE) 51

OBSTRUCTIVE (CHRONIC) 306

RESPIRATORY, NEONATAL (CHRONIC) 292

SALIVARY GLANDS 435

TONGUE 490

THYMUS GLAND 518

TONSILS (CHRONIC) 494

UPPER RESPIRATORY TRACT 484

VALVES WITH MULTIPLE INVOLVEMENT 364

VASCULAR, PERIPHERAL 253

VOCAL CORDS (ACUTE) 670

WHITE BLOOD CELLS 264

DISLOCATION

JOINT (EXCEPT HIP & KNEE)

CLOSED 375

OPEN 63

HIP

CLOSED 374

CONGENITAL 555

OPEN 79

KNEE

CLOSED 374

CONGENITAL 558

OPEN 79

VERTEBRAL

NON-CERVICAL, CLOSED 404

CERVICAL, CLOSED 81

OPEN 81
300 ● Evaluation of the Oregon Medicaid Proposal

CONDITION

DISORDERS

ADRENOGENITAL

AMINO-ACID TRANSPORT

AORTIC VALVE

ARTERIES, VISCERAL

BACK, CHRONIC

BILE DUCT

BLADDER

BURSA

CARTILAGE, ARTICULAR (SHOULDER)

CERVICAL REGION

CERVIX, NONINFLAMMATORY

CORNEA

DIGESTIVE SYSTEM, PERINATAL

FALLOPIAN TUBES, NONINFLAMMATORY

HEMATOLOGICAL, FETUS AND NEWBORN

INTERVERTEBRAL DISC

JOINTS

LENS

METABOLISM

AMINO-ACID (NON PKU)

LIPOID

MINERAL METABOLISM

NASAL CAVITY

NERVE

PERIPHERAL (NON-INJURY)

TRIGEMINAL

OVARY, NONINFLAMMATORY

PANCREATIC ENDOCRINE SECRETION

PARATHYROID GLAND

PENIS

PITUITARY GLAND

PLASMA PROTEIN METABOLISM

PROSTATE (CHRONIC)

REFRACTION AND ACCOMMODATION

RELATING TO LONG GESTATION

AND HIGH BIRTHWEIGHT

SHOULDER

SINUSES

SOFT TISSUE

STOMACH

SWEAT GLANDS

SYNOVIUM

TEETH AND SUPPORTING STRUCTURES

TENDON

THYROCALCITONIN SECRETION

VAGINA, NONINFLAMMATORY

VESTIBULAR SYSTEM

DISPLACEMENT OF CERVICAL INTERVERTEBRAL

DISC WITHOUT MYELOPATHY

DISTURBANCES

ENDOCRINE SYSTEM, FETUS AND NEWBORN

METABOLISM, FETUS AND NEWBORN

SALIVARY SECRETION

DIVERTICULITIS OF COLON

DOUBLE OUTLET, RIGHT VENTRICLE

DRUG REACTIONS, NEWBORN

DUODENITIS

DWARFISM, PITUITARY

DYSCHROMIA

DYSFUNCTION

FALLOPIAN TUBES

POLYGLANDULAR

TESTICULAR

DYSMENORRHEA

DYSPHONIA, SPASTIC

DYSPLASIA

CERVIX

LUNG

DYSTONIA (UNCONTROLLABLE)

DYSTROPHY

MUSCULAR

VULVA

LINE

203

237

200

276

586

6 7

546

630

485

583

439

539

4 4

456

4 0

588

630

345

237

270

314

482

564

592

456

287

301

455

195

285

589

425

309

557

482

630

635

565

630

491

630

241

437

582

416

4 3

4 3

435

369

192

73

152

515

6 7 7

696

640

640

574

601

171

296

363

506

234

CONDITION LINE

EBSTEIN’S ANOMALY 263

ECTOPIC PREGNANCY 10

ECTROPION 471

ECZEMA 391

EDEMA

ANGIONEUROTIC, HEREDITARY 290

FETUS AND NEWBORN 360

EMBOLISM

AORTIC

ABDOMINAL 123

THORACIC 123

PULMONARY 51

VENOUS 254

EMPYEMA 8 0

ENCEPHALITIS, VIRAL, SELF-LIMITING 662

ENCEPHALOCELE 281

ENCEPHALOMYELITIS. VIRAL, SELF-LIMITING 662

ENDOCARDITI S

CARDIAC TRANSPLANT

MEDICAL THERAPY

ENDOCERVICITIS

ENDOMETRIOSIS

ENDOPHTHALMITIS, PURULENT

ENOPHTHALMOS

ORBITAL IMPLANT

REVISION

ENTERITIS, REGIONAL

ENTEROCOLITIS, NECROTIZING, IN FETUS

OR NEWBORN

ENTHESOPATHIES, PERIPHERAL

MEDICAL THERAPY

SURGICAL TREATMENT

ENTROPION OF EYELID

EPICONDYLITIS

EPIDIDYMITIS

EPILEPSY

FOCAL SURGERY

MEDICAL THERAPY

EPIPHYSEAL ARREST

EPISCLERITIS

EPISPADIAS

EPISTAXIS, LIFE-THREATENING

EQUINUS DEFORMITY OF FOOT (ACQUIRED)

EROSION OF THE CORNEA (RECURRENT)

ERYSIPELAS

ERYTHEMA

MULTIFORM

NODOSUM

TOXIC

ERYTHROPLAKIA OF MOUTH AND TONGUE

ESOPHAGITIS

EXFOLIATION OF TEETH DUE TO

SYSTEMIC CAUSES

EXOPHTHALMOS, ENDOCRINE

EXOTROPIA

FAILURE, RENAL

ACUTE

CHRONIC

FATAL RICKETTSIAL

FATTY LIVER, ALCOHOLIC

FEEDING PROBLEMS IN NEWBORN

FEVER, RHEUMATIC

WITH ACUTE

INFLAMMATION OF THE HEART

FIBROMATOSIS, PLANTAR FASCIAL

FIBROPLASIA, RETROLENTAL

FIBROSIS

PULMONARY

SKIN

FISSURE, ANAL

FISTULA

ANAL

FEMALE GENITAL TRACT

367

95

437

469

328

476

612

273

101

642

493

471

576

453

615

159

567

659

411

6 0

487

481

65

664

584

584

626

587

561

52

346

120

310

55

509

362

145

85

585

344

302

677

432

&19

406
Appendix D--Prioritized Health Services List ● 301

CONDITION LINE

FISTULA (CON ’T)

LIP (CONGENITAL) 377

PULMONARY, AORTIC 242

SALIVARY GLANDS 269

URETERAL (INTESTINAL) 275

URETHRAL 468

FLAIL CHEST 130

FOOD ALLERGY 652

FOREIGN BODY

ACCIDENTALLY LEFT DURING PROCEDURE 463

BRONCHUS 4

CONJUNCTIVAL SAC 347

EAR 473

ESOPHAGUS 4

INTRAOCULAR, MAGNETIC &

NONMAGNETIC, RETAINED 552

LARYNX 4

NOSE 473

PENIS 453

PHARYNX 4

TRACHEA 4

UTERUS 451

VAGINA 451

VULVA 451

FRACTURE

EPIPHYSIS OF LOWER EXTREMITIES

CLOSED 380

OPEN 82

EPIPHYSIS OF UPPER EXTREMITIES

CLOSED 554

FACE BONES 5 9

HIP, CLOSED 8 7

JOINT

EXCEPT HIP, CLOSED 417

OPEN 110

LARYNX, OPEN 31

PELVIS 116

PHALANGES OF FOOT 570

RIBS

CLOSED 569

OPEN 54

SHAFT OF BONE

CLOSED 381

OPEN 35

SKULL, COMPOUND/DEPRESSED 6 2

STERNUM

CLOSED 569

OPEN 54

TRACHEA, OPEN 31

VERTEBRAL COLUMN

SACRUM & COCCYX

WITH SPINAL CORD INJURY 412

WITHOUT SPINAL CORD INJURY 656

CERVICAL 8 6

GALACTOSEMIA 25

GALLSTONE

WITH CHOLECYSTITIS 16

WITHOUT CHOLECYSTITIS 681

GANGLION OF TENDON OR JOINT 495

GANGRENE 253

GAS GANGRENE 253

GASTRITIS 152

GASTROENTERITIS, NONINFECTIOUS 107

GENU RECURVATUM 558

GENU VARUM & VALGUM (ACQUIRED) 558

GIARDIASIS 444

GIGANTISM 226

GLAUCOMA 332

ANGLE-CLOSURE 329

ASSOCIATED WITH DISORDERS

OF THE LENS 330

CONDITION

GLAUCOMA (CON’T)

OPEN ANGLE

CYCLOCRYOTHERAPY

LASER TRABECULOPLASTY

TRABECULECTOMY

GLOMERULONEPHRITIS, ACUTE

WITH LESION OF RAPIDLY

PROGRESSIVE GLOMERULONEPHRITIS

GLYCOGENOSIS

GOITER

DYSHORMONOGENIC

NONTOXIC NODULAR

MEDICAL THERAPY

THYROIDECTOMY

SIMPLE

GONOCOCCAL INFECTIONS

OF EYE

GOUT

GRANULATION TISSUE, ABNORMAL

GRANULOMA

LETHAL MIDLINE

SKIN, MUSCLE & SUBCUTANEOUS TISSUE

GUILLAIN-BARRE SYNDROME

GYNECOMASTIA

HEARING LOSS

AGE 3 OR UNDER

OVER AGE OF THREE

SENSORINEURAL

HEART FAILURE

HELMINTHIASIS, INTESTINAL

HEMATOMA

AURICLE, PINNA OR EXTERNAL EAR

SUBARACHNOID AND INTERCEREBRAL

VULVA

HEMOLYTIC DISEASE DUE TO

ISOIMMUNIZATION

HEMORRHAGE

ADRENAL, FETUS OR NEONATE

CUTANEOUS, FETUS OR NEONATE

GASTROINTESTINAL

INTERCEREBRAL

INTRACEREBRAL

INTRAVENTRICULAR, FETAL OR NEONATE

SUBARACHNOID

FETUS OR NEONATE

THYROID

TRANSPLACENTAL

VITREOUS

HEMORRHOIDS

COMPLICATED

THROMBOSED

UNCOMPLICATED

HEMOTHORAX

HEPATITIS

ALCOHOLIC

CHRONIC

VIRAL

HERNIA

WITH OBSTRUCTION AND/OR GANGRENE

WITHOUT OBSTRUCTION OR GANGRENE

HERPES SIMPLEX

U/OPHTHALMIC COMPLICATIONS

WITHOUT COMPLICATIONS

HERPES ZOSTER U/OPHTHALMIC

COMPLICATIONS

HERPETIC ENCEPHALITIS

HISTIOCYTOSIS

HISTOPLASMOSIS

HIV DISEASE, INCLUDING AIDS

END STAGE

COMFORT CARE

MEDICAL THERAPY

OPPORTUNISTIC INFECTIONS OF

LINE

336

335

331

120

137

421

154

682

503

682

170

157

401

604

608

463

288

700

218

477

689

259

444

611

8 8

437

19

268

268

185

8 8

303

687

8 8

687

529

71

334

466

466

698

33

509

213

597

7

504

325

639

325

113

499

127

158

164

702

255
302 ● Evaluation of the Oregon Medicaid Proposal

CONDITION

HODGKIN’S DISEASE

BONE MARROW TRANSPLANT

CHEMOTHERAPY, RADIATION THERAPY

HORDEOLUM AND OTHER DEEP INFLAMMATION

OF EYELID

HYDATIDIFORM MOLE

HYDROCELE

HYDROCEPHALUS (CONGENITAL)

HYDRONEPHROSIS (CONGENITAL)

HYDROPS FETALIS

HYPERALDOSTERONISM

HYPERESTROGENISM

HYPERFUNCTION

MEDULLOADRENAL

PITUITARY (ANTERIOR)

HYPERPLASIA OF PROSTATE

HYPERSENSITIVITY ANGIITIS

HYPERSOMNIA W/SLEEP APNEA

HYPERTELORISM OF ORBIT

HYPERTENSION

INTRACRANIAL, BENIGN

HYPERTENSIVE HEART AND RENAL DISEASE

HYPERTROPHIC

BREAST

MUSCLE

SKIN

HYPHEMA

HYPOCALCEMIA

HYPOGLYCEMIA

NEONATAL

HYPOGLYCEMIC COMA

HYPOMAGNESEMIA

HYPOPLASIA

HYPOPLASTIC LEFT HEART SYNDROME

HYPOSPADIAS

HYPOTENSION

HYPOTHERMIA

HYPOTHYROIDISM

ACQUIRED

CONGENITAL

ICHTHYOSIS

IMPACTED TEETH

IMPETIGO HERPETIFORMIS

INCONTINENCE, STRESS (FEMALE)

INFARCTION

MYOCARDIAL (ACUTE)

THYROID

INFECTIONS

ANAEROBIC, REQUIRING

HYPERBARIC OXYGEN

METASTATIC WITH LOCALIZED SITES

OPPORTUNISTIC IN

IMMUNOCOMPROMISED HOSTS

RESPIRATORY, UPPER (ACUTE)

VIRAL, NONFATAL

INFECTIOUS SKIN CONDITIONS

INFERTILITY

FEMALE, CERVICAL ORIGIN

MALE

INFESTATIONS

BODY (EG. LICE, SCABIES)

EYELID, PARASITIC

INFLAMMATION

LACRIMAL PASSAGES

ORBIT, CHRONIC

INFLAMMATORY DISEASE, PELVIC (ACUTE)

INFLUENZA WITH PNEUMONIA

INJURY

BLOOD VESSELS OF THE THORACIC CAVITY 100

BRAIN, TRAUMATIC 684

CONDITION

INJURY (CON’T)

HEAD

MINOR

SEVERE

MAJOR BLOOD VESSELS OF

UPPER EXTREMITY

NERVE, PERIPHERAL

SPINAL CORD

CERVICAL

WITHOUT VERTEBRAL INJURY

SUPERFICIAL

WITH INFECTION

WITHOUT INFECTION OR CONTUSION

INSUFFICIENCY

AORTIC VALVE (CONGENITAL)

VASCULAR, INTESTINE (ACUTE)

INTERRUPTED AORTIC ARCH

INTOLERANCE, FRUCTOSE (HEREDITARY)

INTOXICATION SPECIFIC TO NEWBORN

IRIDOCYCLITIS

IRON DEFICIENCY ANEMIA

ISCHEMIA, CEREBRAL, TRANSIENT

ISCHEMIC HEART DISEASE, ACUTE/SUBACUTE

JAUNDICE, FETAL AND NEONATAL

KAWASAKI DISEASE

KELOID SCAR

KERATITIS, EXCLUDING CORNEAL ULCER

KERATOCON JUNCTIVITIS

EXPOSURE

SICCA, NOT SPECIFIED AS SJOGREN’S

KERATODERMA (ACQUIRED)

LABYRINTHITIS

LACERATION

CERVIX, OLD

LACRIMAL SYSTEM

LUNG

VAGINA, OLD

LARYNGITIS

LARYNGOTRACHEITIS (ACUTE)

LEIOMYOMA OF UTERUS

LEPROSY

LEPTOSPIROSIS

LESION

BRACHIAL PLEXUS

PLANTAR NERVE

PREMALIGNANT

SPINAL, NON-ALLOPATHIC (ACUTE)

LEUKEMIA

CHRONIC

BONE MARROW TRANSPLANT

CHEMOTHERAPY, RADIATION THERAPY

LYMPHOCYTIC, ACUTE

ADULT

CHILD

LYMPHOID

MONOCYTIC

MYELOID

NON-LYMPHOCYTIC, ACUTE

BONE MARROW TRANSPLANT

CHEMOTHERAPY

LEUKOEDEMA, MOUTH AND TONGUE

LEUKOPLAKIA

CERVIX

ORAL MUCOSA, INCLUDING TONGUE

MEDICAL THERAPY

SURGICAL TREATMENT

LICHEN PLANUS

LIPIDOSES

LUMBAGO

LUPUS ERYTHEMATOSUS

LINE

699

131

11

3 6

8 6

8 3

386

704

458

496

581

596

672

424

70

672

670

8

4 2 9

305

280

571

502

267

594

523

278

244

308

236

294

244

244

311

522

626

234

289

271

636

270

573

584
Appendix D--Prioritized Health Services List .303

CONDITI0N L I NE

LYME’S DISEASE 387

LYMPHADENITIS (ACUTE) 613

LYMPH EDEMA 646

LYMPHOMA, NON-HODGKIN’S

BONE MARROW TRANSPLANT 691

CHEMOTHERAPY, RADIATION THERAPY 239

MALABSORPTION, INTESTINAL 225

MALARIA 272

MALUNION OF FRACTURE 422

MASTITIS, INFECTIVE, NEONATAL 24

MASTOIDITIS (ACUTE) 61

MELANOMA OF SKIN, MALIGNANT, TREATABLE 227

MENINGITIS

ASEPTIC

BACTERIAL (ACUTE)

SUBACUTE

MENOPAUSAL MANAGEMENT

MENSTRUAL BLEEDING DISORDERS

MIGRAINE

MONONEUROPATHY

MONONUCLEOSIS, INFECTIOUS

MUCOCELE

MYASTHENIA GRAVIS

NEONATAL

MYCOBACTERIAL INFECTIONS

MYCOSES

MYELITIS, VIRAL, SELF-LIMITING

MYELOMA, MULTIPLE

BONE MARROW TRANSPLANT

CHEMOTHERAPY, RADIATION THERAPY

MYOCARDITIS

CARDIAC TRANSPLANT

MEDICAL THERAPY

NAPKIN RASH

NECROLYSIS, TOXIC EPIDERMAL

NECROSIS

BONE, ASEPTIC

LIVER, ACUTE

LIVER TRANSPLANT

MEDICAL THERAPY

NEOPLASM, BENIGN

BONE & ARTICULAR CARTILAGE

BRAIN

CONNECTIVE AND OTHER SOFT TISSUE

DIGESTIVE SYSTEM

ENDOCRINE GLANDS

EXTERNAL FEMALE GENITAL ORGANS

EYELID

FALLOPIAN TUBES

ISLETS OF LANGERHANS

KIDNEY

MALE GENITAL ORGANS

MIDDLE EAR

NASAL CAVITIES AND ACCESSORY SINUSES

OVARY

PARATHYROID GLAND

PITUITARY GLAND

RESPIRATORY AND INTRATHORACIC ORGANS

SKIN

NEPHROTIC SYNDROME

TRANSIENT WITH LESION OF MINIMAL

CHANGE GLOMERULONEPHRITIS

NEURITIS, THORACIC OR LUMBOSACRAL

NONUNION OF FRACTURE

NUTRITIONAL DEFICIENCIES

OBESITY

GASTROPLASTY

MEDICAL THERAPY

OBSTRUCTION

BILE DUCT

INTESTINE U/O MENTION OF HERNIA

NASOLACRIMAL DUCT, NEONATAL

RESPIRATORY SYSTEM

URETER

CONDITION

OCCLUSION

CENTRAL RETINAL ARTERY

CENTRAL RETINAL VEIN

PRECEREBRAL ARTERIES

VENOUS TRIBUTARY (BRANCH)

OMPHALITIS OF THE NEWBORN

ORCHITIS

OSTEOARTHRITIS

ARTHROPLASTY

MEDICAL THERAPY

OSTEOCHONDROPATHIES

OSTEOMYELITIS

ACUTE

CHRONIC

OSTEOPOROSIS

OTITIS EXTERNA, INFECTIVE

OTITIS MEDIA

ACUTE

CHRONIC

MEDICAL THERAPY

SURGICAL TREATMENT

OTOSCLEROSIS

MEDICAL THERAPY

STAPEDECTOMY

OVERACTIVITY, CORTICOADRENAL

PALSY, CEREBRAL

MEDICAL THERAPY

SURGICAL TREATMENT

PANCREATITIS, ACUTE

PANCREATITIS, CHRONIC

MEDICAL THERAPY

SURGICAL TREATMENT

PANHYPOPITUITARISM

PARALYSIS OF VOCAL CORDS OR LARYNX

PARALYTIC ILEUS

PARAPLEGIA

ARTHRODESIS

MEDICAL THERAPY AND REHABILITATION

SURGICAL PREVENTION OF CONTRACTURES

PARKINSON’S DISEASE

PATENT DUCTUS ARTERIOSUS

PELVIC PAIN SYNDROME

PEMPHIGUS/PEMPHIGOID

PERFORATION OF INTESTINE, PERINATAL

PERICARDITIS

PERIOSTITIS OF SHOULDER

PERITONITIS

PHARYNGITIS

PHENYLKETONURIA (PKU)

PHLEBITIS

DEEP

SUPERFICIAL

PIERRE ROBIN DEFORMITY

PIGMENTARY ANOMALIES OF

SKIN (CONGENITAL)

PLEURISY

PNEUMONIA

ASPIRATION

BACTERIAL

BRONCHIAL

PNEUMOCOCCAL

PNEUMOCYSTIS CARINII

PNEUMOTHORAX

POISONING

FOOD, BACTERIAL AND OTHER

GAS/FUMES/VAPORS, REQUIRING

HYPERBARIC OXYGEN

INGESTION AND INJECTION

MUSHROOMS, FISH, BERRIES, ETC.

INTERNAL INFECTIONS

POLIOMYELITIS (ACUTE)

POLYARTERITIS NODOSA AND ALLIED

CONDITIONS

POLYARTHROPATHIES, INFLAMMATORY

LINE
304 ● Evaluation of the Oregon Medicaid Proposal

CONDITION 

POLYCYTHEMIA NEONATORUM, SYMPTOMATIC

POLYMYALGIA RHEUMATICA

POLYMYOSITIS

POLYNEUROPATHY, UNSPECIFIED

POLYPS

ANAL AND RECTAL

NASAL

RECONSTRUCTION

SURGICAL TREATMENT

VOCAL CORDS, BENIGN

POSTCONCUSSION SYNDROME

POSTLAMINECTOMY SYNDROME

PREGNANCY

PREVENTIVE SERVICES

ADULTS

WITH PROVEN EFFECTIVENESS

WITH QUESTIONABLE OR NO

PROVEN EFFECTIVENESS

CHILDREN

DENTAL

PRIAPISM

PROCTOCOLITIS, IDIOPATHIC

PROLAPSE

RECTAL

UTERINE

PROLAPSED URETHRAL MUCOSA

PROSTATITIS

TRICHOMONAL

PSEUDOCYST OF PANCREAS

PSORIASIS AND SIMILAR DISORDERS

PTERYGIUM

PTOSIS (ACQUIRED) WITH VISION

IMPAIRMENT

PYELONEPHRITIS

ACUTE

CHRONIC

PYODERMA

QUADRIPLEGIC

RADICULITIS, THORACIC OR LUMBOSACRAL

RAT-BITE FEVER

RAYNAUD’S SYNDROME

REDUNDANT PREPUCE AND PHIMOSIS

REFLUX, VESICOURETERAL

REITER’S DISEASE

RELAPSING FEVER

RENAL DISEASE, END STAGE

MEDICAL THERAPY INCLUDING DIALYSIS

RENAL TRANSPLANT

RESPIRATORY CONDITIONS OF FETUS AND

NEWBORN

RESPIRATORY FAILURE

RETAINED

DENTAL ROOT

FOREIGN BODY IN SOFT TISSUE

RETINOPATHY

CENTRAL SEROUS

DIABETIC/OTHER

RHEUMATIC MYOCARDITIS AND

PERICARDITIS (CHRONIC)

RHINITIS, ALLERGIC

ROSACEA

RUBELLA

RUBEOSIS IRIDIS

RUPTURE

BLADDER, NONTRAUMATIC

ESOPHAGUS

INTESTINE

LIVER

PAPILLARY MUSCLE

SPLEEN

SYNOVIUM

CONDITION

SARCOIDOSIS

SCALDED SKIN SYNDROME

SCAR CONDITIONS

SCARLET FEVER

SCLERITIS

SCLERODERMA, CIRCUMSCRIBED

SCLEROSIS

MULTIPLE

SYSTEMIC

SEBORRHEIC KERATOSIS

SEPTICEMIA

SEPTUM, HYMEN AND VAGINAL

SHIGELLOSIS

SIALOADENITIS

SIALOLITHIASIS

SICCA SYNDROME

SINUSITIS

ACUTE

CHRONIC

MEDICAL THERAPY

SURGICAL TREATMENT

SOMATIC MEDICINE

SORE THROAT, STREPTOCOCCAL

SPINA BIFIDA

WITH HYDROCEPHALUS

WITHOUT HYDROCEPHALUS

SPONDYLOSIS

SPRAIN/STRAIN

ACHILLES TENDON

BACK

JOINTS AND ADJACENT MUSCLES

STENOSIS

AORTIC VALVE (CONGENITAL)

MITRAL VALVE (CONGENITAL)

NASOLACRIMAL DUCT (ACQUIRED)

PRECEREBRAL ARTERIES

PULMONARY VALVE (CONGENITAL)

SPINAL, LUMBAR

TRICUSPID VALVE (CONGENITAL)

STEVENS-JOHNSON SYNDROME

STOMATITIS

STRIAE ATROPHICAE

STRICTURE

URETER

URETHRAL

STROKE

SYNDROME

COMPARTMENT

HEPATORENAL

"INFANT OF A DIABETIC MOTHER’ i

ORGANIC BRAIN

RESPIRATORY DISTRESS (ADULT)

VERTIGINOUS

SYNOVITIS AND TENOSYNOVITIS

SYPHILIS

SYSTEMIC LUPUS ERYTHEMATOSUS

TEAR, RETINAL

TELANGIECTASIA, HEMORRHAGIC, HEREDITARY 517

TEMPERATURE REGULATION OF NEWBORNS, 41

CONDITIONS INVOLVING THE

TENDINITIS 631

TENOSYNOVITIS, RADIAL STYLOID 576

TETANUS 298

NEONATORUM 139

TETRALOGY OF FALLOT (TOF) 210

THROMBOCYTOPENIA 91

THROMBOPHLEBITIS

DEEP 78

SUPERFICIAL 647
Appendix D--Prioritized Health Services List . 305

CONDITION

—

THROMBOS I S

AORTIC, ABDOMINAL AND THORACIC

PORTAL VEIN

VENOUS

T H YROI D I TI S

ACUTE

CHRONIC

THYROTOXICOSIS

NEONATAL

TMJ DISORDERS

SPLINTS

SURGICAL TREATMENT

TONGUE TIE

TONSILLITIS (ACUTE)

TORSION

OVARY

TESTIS

TOXOPLASMOSIS

TRACHOMA

TRANSPOSITION OF GREAT VESSELS

TRICHIASIS OF EYELID

TRICHINOSIS

TUBERCULOSIS

ULCER

CORNEA

CONJUNCTIVAL FLAP

MEDICAL THERAPY

GASTRIC, DUODENAL, PEPTIC,

GASTROJEJUNAL

HEMIGASTRECTOMY

MEDICAL THERAPY

INTESTINAL

SKIN, CHRONIC

AMPUTATION

MEDICAL THERAPY

UNDESCENDED TESTICLE

URETHRITIS

TRICHOMONAL

URTICARIA

ACUTE

CHRONIC

UVEITIS, SYMPATHETIC

VAGINITIS

VARICES

ESOPHAGEAL

LOWER EXTREMITIES

SUBLINGUAL, SCROTAL AND PELVIC

VULVAL

VENEREAL DISEASES

VENOM POISONING

VESICULITIS, SEMINAL

VINCENT’S DISEASE

VITILIG O

WARTS, VIRAL

WHOOPING COUGH

WITHDRAWAL

ALCOHOL

DRUG OR NARCOTIC

SYNDROME, NEWBORN DUE TO DRUGS

WOUND, OPEN

EAR DRUM

EYEBALL

MOUTH W/O COMPLICATION

NECK, INCLUDING LARYNX (DEEP)

ORBIT, PENETRATING

XEROSIS

LINE

123

297

254

353

52

52

72

535

445

185

152

261

253

388

173

427

428

657

580

403

452

316

616

654

666

170

92

453

426

675

678

2 7

142

142

76

350

475

339

661

31

327

633
Appendix E

Glossary of Terms

Access: Potential and actual entry of a population into the

health care delivery system.

Acute: In medical care, used to describe a condition that

has a sudden onset, sharp rise, and short course

(compare with chronic).

Adverse event (outcome): Any disease or injury. Usually

used in the context of an injury that arises during the

course of medical treatment, e.g., a premature death

or unnecessary morbidity.

Age-adjusted mortality rate: The death or mortality rate

adjusted for the age distribution of the population

under study. Age adjustment allows a direct comparison of the overall mortality experience of two or

more populations, or examination of mortality over

time in a single population, by using a single

statistic. Age adjustment is necessary because

populations differ in their proportions of people in

different age categories, and different age groups

have different mortality rates; for example, death

rates for 25 to 34 year olds are much lower than for

55-64 year olds. Comparing populations without

adjusting for the different age distributions of

persons within each population could lead to

erroneous conclusions about the relative health of

the populations being compared.

Aid to Families with Dependent Children (AFDC): A

program, established by the Social Security Act of

1935, providing cash payments to needy children

(and their caretakers) who lack support because at

least one parent is dead, disabled, continually

absent from the home, or unemployed. Eligible

families must meet income and resource criteria

specified by the State.

Alcoholic cirrhosis of the liver: A liver condition caused

by continued alcoholic intake over time, which

destroys liver cells and stimulates the formation of

collagen nodules that impede the liver’s functioning

by causing it to shrink and harden. Alcoholic

cirrhosis can be fatal.

Allowable costs or charges: Costs or charges that are

within the limits recognized as reimbursable under

a particular insurance program (e.g., Medicare).

Ambulatory care: See outpatient care.

Amyotrophic lateral sclerosis (ALS): A degenerative

disease of the spinal motor neurons that control

skeletal muscles, resulting in gradual paralysis and

ultimately, death. The cause of the disorder, which

most frequently attacks men in their 40s, is unknown. Also known as Lou Gehrig’s Disease.

Ancillary services or technology: In this report, medical

technology or services used directly to support

basic clinical services, including diagnostic radiology, radiation therapy, clinical laboratory, physical

therapy, and other special services.

Anencephaly: A neural tube defect characterized by a

failure of the brain to develop.

Asthma: Constriction of the bronchial tubes, producing

wheezing and difficulty breathing, in response to

irritation, allergy, or other stimuli.

Beneficiary: An individual receiving benefits (e.g.,

Medicaid). In this report, someone who is enrolled

and participating in the Medicaid program. See

enrollee.

Benefit package: The package of health care services

covered by a particular insurer.

Billed charges: The physician’s (or supplier’s) actual

(billed) charge for a service. Compare with customary, prevailing, and reasonable charges.

Bronchitis: Inflammation of the bronchial tubes of the

lungs.

Capitated payment: Periodic (e.g., monthly) payment to

a health care provider to cover all costs of providing

all or selected types of health care services to a

single individual (i.e., per capita). The provider

assumes financial risk for patients whose actual

costs exceed the average.

Capitated services: Health care services covered under

a capitated payment (see capitated payment).

Cavitation rate: See capitated payment.

Case-managed fee-for-service system: A system of

health care delivery where each patient is enrolled

with a primary care provider who preauthorizes all

the patient’s health care and where all authorized

health services are paid for on a fee-for-service

basis.

Case management: As used in this report, a system

wherein a single “gatekeeper” (the case manager)

provider monitors, coordinates, or preauthorizes all

or selected health care services for an enrolled

patient.

Catastrophic cost: High cost related to treatment of

severe or lengthy illness or disability.

Categorically eligible Medicaid beneficiary: An individual qualifying for Medicaid under the federally

mandated coverage groups which include: Aid to

Families with Dependent Children (AFDC) participants; unemployed parent families; poverty level

medical (PLM) women and children; foster care

children; and, certain aged, blind, and disabled

individuals.

Charity care: Care provided free of charge to individuals

who the provider knows are unable to pay for

services rendered (compare with uncompensated

care).

–30*
Appendix E--Glossary of Terms ● 307

Chronic: Persistent or long-lasting (compare with acute).

Coinsurance: That percentage of covered medical expenses, after subtraction of any deductible, for

which an insured person is responsible. Under

Medicare Part B, after the annual deductible has

been met, Medicare will generally pay 80 percent of

approved charges for covered services and supplies;

the remaining 20 percent is the coinsurance, for

which the beneficiary is liable. Also see copayment

and deductible.

Comorbidity: Coexisting health problems that tend to

worsen the patient’s overall clinical condition.

Community health center (CHC): An organization that

provides primary health care and other healthrelated services to individuals in the local community. As of 1989, there were about 1,200 community

health centers providing services at more than 2,000

sites throughout the country. Roughly half of these

centers were receiving Federal grants under section

330 of the Public Health Services Act, which

authorizes grants to public and private nonprofit

organizations that provide primary health care to

populations or areas that are “medically undeserved.” (See also federally qualified health center.)

Community hospital: A hospital-public or private—

whose services are available to the general public.

Excludes military and veterans hospitals.

Condition-treatment (CT) pair: The basic unit of the

prioritized list compiled by the Oregon Health

Services Commission, which couples medical condition codes from the International Classification

of Diseases (ICD-9) with corresponding treatment/

therapy codes from the Physicians’ Current Procedural Terminology, 4th Edition (CPT-4). An example of a (CT pair is the condition appendicitis, with

the treatment appendectomy.

Control group: In a randomized clinical trial or other

experiment, the group with which the group receiving experimental treatment is compared. The control group generally receives either a standard

treatment, a placebo, or no treatment. The control

group can be established by random assignment of

subjects, or by nonrandomized distribution, Nonrandom methods include historical controls, in which

individuals treated with a ‘‘control treatment”

outside the study proper, at some time previous to

the trial, are compared with the experimentally

treated individuals; and matched controls, in

which individuals in the control group are selected

for their similarity to members of the experimental

group. In the case of evaluating the Oregon

Medicaid population, for example, individuals in

the program could be matched and compared to

another State’s Medicaid population.

Copayment: In insurance, a form of cost sharing whereby

the insured pays a specific amount at the point o f

service or use (e.g., $10 per visit). See also

coinsurance and deductible.

Coronary artery bypass graft (CABG) surgery: A

surgical procedure in which a blood vessel from

elsewhere in the body is used to bypass a constricted

portion of one or more arteries feeding the heart

muscle. This procedure has become the primary

surgical approach to the treatment of coronary

artery disease.

Coronary artery disease: Narrowing or blockage of the

coronary arteries, which usually results in reduced

blood flow to the heart muscle.

Coronary heart disease: See coronary artery disease.

Cost-based reimbursement: Reimbursement based on

the actual or reported costs of a provider for

delivering a health care service or services.

Cost-benefit analysis (CBA): An analytical technique

that compares the costs of a project or technological

application to the resultant benefits, with both costs

and benefits expressed by the same measure. This

measure is nearly always monetary.

Cost-effectiveness analysis (CEA): An analytical technique that compares the costs of alternative projects

to the resultant benefits, with costs and benefits/

effectiveness expressed by different measures. Costs

are usually expressed in dollars, but benefits/

effectiveness are ordinarily expressed in terms such

as “lives saved, ” ‘‘ disability avoided,” “qualityadjusted life years saved, ’ or some other relevant

objective,

Coverage (Medicaid): In the Medicaid program, ‘coverage’ refers to the benefits available to eligible

beneficiaries. It differs from payment, which refers

to the amount and methods of payment for covered

services. See also benefit package.

Covered services: See coverage.

Current Procedural Terminology, 4th Revision (CPT4) Coding: A taxonomy of procedures performed

by physicians that is used for recording and billing

for services rendered. In this taxonomy, each

procedure is assigned a unique numerical code.

Customary, prevailing, and reasonable (CPR) method:

The method used by some insurers (including

Medicare) to determine the allowed charge for

certain services of physicians or suppliers based on

the actual charge for the service, previous charges

for the service by the physician or supplier in

question, and previous charges by peer physicians

or suppliers in the same locality. Customary

charge: In the absence of unusual medical circumstances, the maximum amount that the insurer will

approve for payment for a particular service provided by a particular physician practice. The insurer

computes the customary charge on the basis of the

actual amount that a physician practice or supplier

generally charges for a specific service. Prevailing
308 . Evaluation of the Oregon Medicaid Proposal

charge: In the absence of unusual medical circumstances, the maximum amount an insurer will

approve for payment for a particular service provided by any physician practice within a particular

peer group and locality. Generally, this amount is

equal to the lowest charge in an array of customary

charges that is high enough to include 75 percent of

all the relevant customary charges. Approved or

reasonable charge: An individual charge determination made by an insurer on a covered medical

service or supply. In the absence of unusual medical

circumstances, it is the lowest of: 1) the physician’s

or suppliers’s customary charge for that service; 2)

the prevailing charge for similar services in the

locality; 3) the actual charge made by the physician

or supplier and 4) for Medicare, the carrier’s

private business charge for a comparable service.

Also called the allowed charge.

Deductible: In insurance, an aspect of cost sharing in

which the insured incurs an initial expense of a

specified amount within a given time period (e.g.,

$250 per year) before the insurer assumes liability

for any additional costs of covered services.

Delphi technique: A technique used to obtain the most

reliable consensus of opinion from a group of

experts. Consensus is achieved after an iterative

process where group members offer written individual opinions, discuss group opinion, and then

revise individual opinions.

Demonstration (Medicaid): An experiment designed to

test alternative health care financing, delivery,

and/or coverage mechanisms within the context of

a State Medicaid program. States must apply to the

Federal Government for special waiver permission

if any aspect of the proposed demonstration does

not fall within what is allowed under Federal

Medicaid law. The demonstration can be populationbased (e.g., apply only to certain eligibility categories), geography-based, or statewide.

Dental care organization: In Oregon, an organization

that provides dental services on a prepaid, capitated

basis.

Diagnosis-related groups (DRGs): Groupings of diagnostic categories drawn from the International

Classification of Diseases and modified by the

presence of a surgical procedure, patient age,

presence or absence of significant comorbidities or

complications, and other relevant criteria. DRGs are

the case-mix measure mandated for Medicare’s

prospective hospital payment system by the Social

Security Amendments of 1983 (Public Law 98-21).

They are also the basis for Oregon’s current

inpatient hospital payment under Medicaid.

Disability: A term used to denote the presence of one or

more functional limitations. A person with a

disability has a limited ability or an inability to

perform one or more basic life functions (e.g.,

walking) at a level considered “typical.”

Disproportionate-share hospital: A hospital that serves

a relatively high number of low-income patients.

Disproportionate-share hospitals are eligible for

special payment bonuses under Medicare and

Medicaid. For Medicare, the increased reimbursement takes the form of a percentage adjustment in

payment rates under Prospective Payment System

(PPS). Under Medicaid, each State must establish

its own methodology for adjusting Medicaid reimbursement to disproportionate-share hospitals.

Doctor of Osteopathy (DO): A physician trained in a

system of therapy that utilizes generally accepted

physical, medicinal, and surgical methods of diagnosis and therapy, while placing chief emphasis on

the importance of normal body mechanics and

manipulative methods of detecting and correcting

illness and injury. (DOS make up approximately 5

percent of the total physician population in the

United States. In general, State licensing boards

recognize the DO degree as equivalent to the MD

(allopathic) degree.

Early and Periodic Screening, Diagnosis, and Treatment Program (EPSDT): A State and federally

funded program, administered by the State under

the Medicaid program, that is intended to provide

screening exams and followup services for illnesses, abnormalities, and treatable conditions to

Medicaid-eligible children under age 21, The EPSDT

benefit was enacted in 1967,

Effectiveness: Same as efficacy (see below) except that it

refers to average conditions of use.

Efficacy: The probability of benefit to individuals in a

defined population from a medical technology

applied for a given medical problem under ideal

conditions of use.

Elective procedure: A surgical procedure that may be

important to an individual’s health but is neither an

emergency nor life threatening.

Eligibility: The quality of meeting specific requirements

to qualify for a particular program (e.g., Medicaid)

or benefit. Eligible: An individual who qualifies

for a program (e.g., Medicaid) or benefit whether or

not he or she actually takes advantage of that

qualification and participates in the program (see

enrollee).

Encounter data: Data describing the content of care and

other characteristics of discrete outpatient health

care visits. Encounter data usually include provider

identification, patient demographics, diagnoses,

procedures performed, charges, and date and setting

of service.

Enrollee: An individual who qualifies for (Medicaid)

benefits and is “enrolled” in the (Medicaid)

program, receiving benefits when needed.
Appendix E--Glossary of Terms ● 309

External validity: A measure of the extent to which study

results can be generalized to the population that is

represented by individuals in the study, assuming

that the characteristics of that population are

accurately specified.

Federal poverty level (FPL): The official U.S. Government definition of poverty based on cash income

levels for families of different sizes. In 1992, the

FPL for a family of three in the continental United

States was $11,570. (The FPL is slightly higher in

Alaska and Hawaii.) Responsibility for changing

poverty concepts and definitions rests with the

Office of Management and Budget.

Federally qualified health center (FQHC): A community health center, migrant health center, or health

center for the homeless that provides primary care

services for uninsured and Medicaid patients. These

clinics are funded under sections 329, 330, and/or

340 of the Public Health Services Act.

Fee-for-service payment: A method of paying for

medical services in which each service performed

by an individual provider bears a related charge.

This charge (or some related fee) is paid by the

individual patient receiving the service or by an

insurer on behalf of the patient.

Fee schedule: A list of covered health care services in

which each entry is associated with a specifi c

monetary amount that represents the approved

payment level for that service under a given

insurance plan.

Fixed costs: The portion of total costs of a program

incurred even when output is negligible-e. g., costs

associated with overhead, facilities, and overhead

salaries (compare with variable costs).

Freestanding facilities: Facilities that are not physically,

administratively, or financially connected to a

hospital, such as a freestanding ambulatory surgery

center.

Fully capitated health plan (FCHP): Under the Oregon

Medicaid program, FCHPs are prepaid on a per

capita basis for all inpatient, outpatient, and ancillary services provided to enrollees, with certain

exceptions (e.g., dental and psychiatric care). The

FCHP provides these services either directly or

through subcontractors. (See capitated payment).

General assistance ((; A): An Oregon State program of

limited health care benefits provided (without

Federal funding) to medically unemployable adults

who would not be disabled long enough to qualify

for Social Security benefits.

Health maintenance organization (HMO): A health

care organization that, in return for prospective per

capita (cavitation) payments, acts as both insurer

and provider of comprehensive but specified medical services. A defined set of physicians provide

services to a voluntarily enrolled population. Prepaid group practices and individual practice associations are types of HMOs. A Federally qualified

HMO is one that has been determined by the

Department of Health and Human Services to meet

the standards set forth in Title XIII of the Public

Health Service Act, in such areas as financial and

administrative stability, quality, scope of services

covered, and rate-setting practices.

Health Services Commission (HSC): An 1 l-member

committee authorized in the Oregon Basic Health

Services Act (Oregon Senate Bill 27) and appointed

by the Governor to formulate a list of health

services ranked in order of priority.

Historical controls: See control group.

Human immunodeficiency virus (HIV): The virus that

causes acquired immunodeficiency syndrome (AIDS).

Impetigo herpetiformis: A rare, redness and inflammation of the pustules of the skin that affects pregnant

women and results in fetal death, stillbirth, placental insufficiency, and perinatal death. Steroid treatments and antipsoriatic agents are ineffective and

termination of the pregnancy is the only cure.

Independent practice association (IPA): See health

maintenance organization (HMO).

infant mortality rate: Number of deaths among children

less than 1 year old as a fraction of the total number

of live births in a year.

Inpatient care: Care that includes an overnight stay in a

medical facility. Internal validity: A measure of

the extent to which study results reflect the true

relationship of a ‘‘risk factor’ (e.g., treatment or

technology) to the outcome of interest in study

subjects.

International Classification of Diseases, 9th Revision,

Clinical Modification (ICD-9-CM) Coding: A

two-part system of coding patient medical information used in abstracting systems and for classifying

patients into diagnosis-related groups for Medicare.

The first part is a comprehensive list of diseases

with corresponding codes compatible with the

World Health Organization’s list of disease codes,

The second part contains procedure codes, which

are independent of the disease codes. (Oregon did

not use the ICD-9-CM procedure codes in its

prioritized list.)

Joint and several liability: The ability of a plaintiff to

sue one or more parties for a tort and the right of a

plaintiff to collect the entire compensation from a

single entity.

Length of stay (LOS): The number of days a patient

remains in the hospital from admission to discharge.

Managed health care: Care provided to enrollees in

case-managed fee-for service plans, health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Patients in managed
310 . Evaluation of the Oregon Medicaid Proposal

health care plans do not have open access to

physicians or hospitals and usually must obtain

prior approval from a “gatekeeper” primary care

provider from the health plan administration before

admission to a hospital. HMOs and PPOs may also

require that the health provider’s treatment plan be

reviewed to ensure that all services are necessary.

Patients who do not follow the HMO or PPO

guidelines may face larger out-of-pocket costs or be

denied payment altogether. Some managed health

care plans contain “individual benefits management’ programs that allow payment for otherwise

uncovered benefits (e.g., home- and communitybased services) in order to avoid the utilization of

more costly covered services.

Mandatory benefits (Medicaid): The core package of

Medicaid services that by Federal law (Title XIX of

the Social Security Act) must be covered by State

Medicaid programs. Includes basic hospital, ambulatory, long-term care, and ancillary services, (Compare with optional benefits (Medicaid)).

Mandatory group (Medicaid): Refers to Medicaid

eligibility groups that must be covered by a State

Medicaid program according to Federal law. Includes Aid to Families with Dependent Children

(AFDC) participants, unemployed parent families,

certain pregnant women and young children, foster

care children, and some aged, blind, and disabled

individuals.

Matched control group: See control group.

Medicaid: A federally aided, State-administered program

that provides medical assistance for low-income

people meeting specific income and family structure requirements.

Medical technology: The drugs, devices, and medical

and surgical procedures used in medical care, and

the organizational and support systems within

which such care is provided.

Medically needy Medicaid recipients: People who

receive Medicaid under State “medically needy”

programs. States have the option to offer Medicaid

to medically needy people who would be categorically eligible for Medicaid but whose income and

resources lie above the standards for AFDC. Each

State sets its own medically needy resource and

income standards up to 133 percent of State AFDC

income standards.

Medicare: A nationwide, federally administered health

insurance program authorized in 1965 to cover the

cost of hospitalization, medical care, and some

related services for eligible persons over age 65,

persons receiving Social Security Disability Insurance payments for at least 2 years, and persons with

end-stage renal disease. Medicare consists of two

separate but coordinated programs----hospital insurance (Part A) and supplementary medical insurance

(Part B). Health insurance protection is available to

insured persons without regard to income.

Migrant health center (MHC): A center that receives

Federal funds to provide primary health care to

migrant and seasonal farmworkers and their families under section 329 of the Public Health Services

Act. See federally qualified health center.

Morbidity: Sickness or disease; any unhealthful condition.

Mortality rate: The death rate, often made explicit for a

particular characteristic; e.g., age, sex, or specific

cause of death. A mortality rate contains three

essential elements: 1) the number of people in a

population group exposed to the risk of death (the

denominator); 2) a time factor; and 3) the number

of deaths occurring in the exposed population

during a certain time period (the numerator).

Myasthenia gravis: An autoimmune disorder in which

the body reacts against a normal substance that

communicates between nerve and muscle cells,

resulting in muscle weakness and fatigue.

Negotiated rate: A payment rate whose final amount is

the result of a negotiation between the payer and the

health care provider (with negotiations taking place

before the service is provided).

Neonatal: Pertaining to the first 4 weeks after birth.

Net benefit: In this report, a number associated with a

given CT pair that reflects both clinicians’ estimates

of treatment effects and consumers’ perception of

the desirability of experiencing those effects. The

Oregon Health Services Commission used net

benefit information in its ranking process for the

prioritized list.

New eligible: In this report, refers to individuals who do

not qualify for Medicaid under current rules but

would be eligible under the proposal set out in the

Oregon waiver application.

Noncapitated services: Services not covered under a per

capita payment system. Generally, providers are

reimbursed on a fee-for-service basis for covered

noncapitated services. See fee-for-service payment

and capitated payment.

Noncategorical eligibles: Individuals that qualify for

Medicaid, but do not fit into one of the “categorically needy” groups. (See categorically eligible

Medicaid beneficiary.) They include children aged

9 to 21 of 2-parent families whose income meet

income eligibility standards, and ‘medically needy’

individuals who ‘‘spend down. ’

Non-Hodgkin’s lymphoma: A cancerous disorder of the

lymphoid tissue; also known as lymphocytic lymphoma. Treatment varies according to the grade of

the condition but usually includes bone marrow

transplantation and/or chemotherapy.

occupancy rate: The average percentage of a hospital’s

beds occupied at any one time, determined by
Appendix E--Glossary of Terms ● 311

dividing available bed days by patient days.

Operating margin: A measure of the financial health and

profitability of a hospital, defined as: (total operating revenue minus operating expenses) divided by

total operating revenue. A positive operating margin implies a surplus; a negative operating margin

implies a loss.

Optional benefits (Medicaid): Benefits that States are

allowed, but not required, to provide to Medicaid

recipients. States may receive Federal finding for

up to 32 optional services under the Medicaid

program, Among the most common are prescription

drugs and dental services. Compare with mandatory benefits (Medicaid).

optional eligibility group (Medicaid): States may

receive Federal funding to provide Medicaid benefits to several optional eligibility groups, including

pregnant women and infants under age 1 with

incomes between 100 and 133 percent of the

Federal poverty level, AFDC children between 18

and 21 years old, and children ages 9 to 21 of

two-parent families whose incomes meet Medicaid

income eligibility standards, but who are categorically ineligible. Outcome measure: Any measure

of an intermediate or final outcome experienced by

a patient with a given condition. Mortality (deaths

within a given time period) is a common outcome

measure. Various measures of morbidity (e.g., the

ability to walk without assistance) can also be

outcome measures.

outpatient care: Care provided in a health care facility

that does not include an overnight stay.

Palliative treatment: Treatment designed to provide

relief from a disease or condition (e.g., to provide

comfort or reduce pain), but not to cure the disease

or condition.

Partially capitated health plan: Under the Oregon

Medicaid program, partially capitated health plans

are prepaid on a per capita basis for certain types of

health services (e.g., physician services, laboratory,

and X-ray services), which they deliver to enrolled

patients either directly or through subcontractors. In

addition, partially capitated health plans often

coordinate and/or preauthorize noncapitated services (e. g., inpatient care, chiropractic services) for

their enrolled patients. See also physician care

organization. Compare with fully capitated health

plan.

Participation (Medicaid): Acceptance of Medicaid patients by a health care practitioner.

Participation rate: The proportion of all active health

care practitioners in a given area who accept

Medicaid patients in their practice.

Patient dumping: Transferring a patient to another

hospital for economic reasons alone (e.g., because

the patient has no health insurance).

Per-case payment: A type of hospital payment system in

which the hospital is paid a specific amount for each

case treated, regardless of the number and types of

services or number of days of care provided.

Medicare’s DRG payment system for inpatient

services is a per-case payment system. See also

prospective payment.

Percent-of-cost limit: A payment method wherein a

payer reimburses a provider based on a percentage

(e.g., 80 percent) of the provider’s actual costs for

providing a service. Oregon pays most hospitals for

outpatient services on a percent-of-cost basis,

where costs are determined based on the hospital’s

Medicare cost reports.

Physician care organization (PC O): A group of primary

care physicians prepaid to provide a basic package

of services that include: physician services, laboratory, radiology, and EPSDT services. PCOs are also

required to act as “gatekeepers” to preapprove all

nonemergency inpatient and outpatient hospital

services.

Physician Payment Review Commission (PPRC): A

commission, established by the Comprehensive

Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272), that makes recommendations to

Congress on various issues relating to physician

payment under Medicare and Medicaid.

Poor: A term defined in relation to the Federal poverty

level (FPL), a cash income level which varies with

family size and the age of family members. Poor

families are families with incomes below 100

percent of the Federal poverty level. In 1992 the

Federal poverty level for a family of three in the

continental United States was $11,570.

Poverty level medical (PLM): A term used by the

Oregon Medicaid program to describe pregnant

women and children under 6 years old whose family

income is less than 133 percent of the Federal

poverty level (FPL) and all children up to age 19

born after September 30, 1983, whose income is

less than 100 percent of the FPL. This group was

mandated Medicaid coverage under the Omnibus

Budget Reconciliation Act of 1990 (Public Law

101-239).

Preexisting condition: As defined by insurers, a health

care condition existing before an insurance policy

goes into effect and that would cause an ordinarily

prudent person to seek diagnosis, care, or treatment.

Preferred provider organization (PPO): A health care

delivery arrangement in which an agreement is

made between providers and purchasers of medical

care that patients who use the ‘‘preferred providers’ will obtain additional benefits, such as reduced

cost sharing. In return for the potential increase in

volume of patients, the preferred providers may
312 ● Evaluation of the Oregon Medicaid Proposal

agree to discount their charges or to submit to

enhanced utilization review.

Prenatal care: Medical services related to fetal, infant,

and maternal health, delivered from time of conception to labor.

Prepaid health plan: An organized group (e.g., a health

maintainance organization or group of physicians)

that is prepaid on a periodic basis, an amount to

cover some or all services provided to its enrollees

(see capitated payment).

Preventive medical services: Clinical services provided

to patients to reduce or prevent disease, injury, or

disability.

Primary care: A basic level of health care, usually

provided in an outpatient setting, that emphasizes a

patient’s general health needs (e.g., preventive

services, treatment of minor illnesses and injuries,

identification of problems that require referral to

specialists).

Primary care specialty: One of the medical specialties of

family practice, general practice, general pediatrics,

general internal medicine, and obstetrics and gynecology.

Primary condition: See primary diagnosis.

Primary diagnosis: The chief diagnosis for which a

patient is treated during a given episode of care

(e.g., a hospitalization). Prospective payment:

Payment for medical care on the basis of rates set in

advance of the time period in which they apply. The

service provider is at least partially at risk for losses

and stands to gain from surpluses that accrue in the

payment period. The unit of payment may vary

from individual medical services to broader categories, such as hospital case, episode of illness, or

person (cavitation). See also cavitation financing

method. Compare retrospective cost-based reimbursement.

Prospective Payment Assessment Commission

(ProPAC): A commission, established by the same

law that created the Medicare DRG-based prospective payment system for hospitals (Public Law

98-21), that advises Congress on various issues

relating to how Medicare pays hospitals and other

health care institutions.

p value: In epidemiologic studies, the probability of

concluding that a statistical association exists

between, for instance, a risk factor and a health

endpoint, when, in fact, there is no real association.

In other words, the likelihood that an observed

association in a study is due to the play of chance.

Also called “Type I error,’ “alpha,’ or the “level

of significance. ”

Reasonable charge: See customary, prevailing, and

reasonable (CPR) method and usual, customary

and reasonable charges.

Recipient (Medicaid): See beneficiary.

Referral services: Health care services obtained from a

provider to whom the patient was referred by his or

her physician. Includes physician specialist care

and various ancillary services (e.g., physical therapy services).

Relative value scale (RVS): A list of all physician

services containing a cardinal ranking of those

services with respect to some conception of value,

such that the difference between the numerical

rankings for any two services is a measure of the

difference in value between those services.

Retrospective cost-based reimbursement: A payment

method for health care services in which hospitals

(or other providers) are paid their incurred costs of

treating patients after the treatment has occurred.

Compare prospective payment.

Risk-based provider: A provider of health care (e.g., a

health maintenance organization) that accepts prepayment on a per-patient basis for some or all health

care services needed by that patient and thus

assumes some degree of financial risk for service

costs exceeding the prepaid amount. See also

capita ted payment.

Rural health clinic (RHC): A clinic certified according

to the provisions of Public Law 95-210. These

clinics qualify for facility-specific cost-based reimbursement under Medicare and Medicaid.

Schmidt’s syndrome: A rare hormonal deficiency syndrome that primarily affects females. It is characterized by insufficiency in the adrenal gland, gonads,

and/or thyroid. Treatment includes hormone replacement therapy.

Secondary care: Services provided by the medical

specialists who generally do not have the first

contact with patients (e.g., cardiologist, urologist,

dermatologist). In the United States, however, there

has been a trend toward self-referral by patients for

these services, rather than referral by primary care

providers.

Self-limited: Refers to medical conditions that tend to be

limited in duration or course even if untreated.

Statistical significance: See p value.

Supplemental Security Income (SSI): A Federal income

support program for low-income disabled, aged,

and blind persons which was established by Title

XVI of the Social Security Act. Eligibility for the

program is based on income and resources.

Tertiary care: Services provided by highly specialized

providers (e.g., neurologist, neurosurgeon, thoracic

surgeon). Such services frequently require highly

sophisticated equipment and support facilities.

Tertiary care lies at the end of the continuum of type

of care (i.e., primary, secondary, tertiary), of which

many services overlap, and is difficult to define

precisely,
Appendix E-Glossary of Terms ● 3 1 3

Third-party payment: Payment by a private insurer or

government program to a medical provider on

behalf of a patient for care given to that patient.

Tort liability: A legal basis for compensation when

property has been damaged or a person has been

injured.

Trigeminal nerve disorder: The trigeminal nerve supplies sensation to the skin of the face. Patients with

disorders of the trigeminal nerve experience pain in

the lip, gums, cheek, and chin areas.

Uncompensated care: Health care services for which the

provider receives no compensation. When reporting

uncompensated care costs, providers generally

include charity care, bad debt (i.e., unpaid bills),

and disparities between providers’ billed charges

and actual reimbursement for health care services.

(Compare with charity care.)

Unrestricted fee-for-service system: A health care

delivery system where patients are free to seek

health care services from any willing provider

without prior authorization. Services are paid on a

fee-for-service basis, (See fee-for-service; contrast

with case-managed fee-for-service system. )

Uptake rate: In this report, a measure of how quickly new

eligibles under Oregon’s proposal would enroll in

the Medicaid program.

Usual, customary, and reasonable charges: In private

health insurance, a basis for determining payment

for individual physician services. ‘Usual’ refers to

the individual physician’s fee profile, equivalent to

Medicare’s “customary’ charge screen. “Customary,” in this context, refers to a percentile of the

pattern of charges made by physicians in a given

locality (comparable to Medicare’s “prevailing”

charges). “Reasonable” is the lesser of the usual or

customary screens. See customary, prevailing, and

reasonable charges.

Variable costs: The portion of total cost that increases

with greater output+. g., the costs associated with

increasing numbers of persons seen in a health

clinic.

Viral warts: Skin eruptions resulting from infection of

the human papillomavirus (HPV). They can occur

on the face, neck, chest, hands, arms, and legs, Of

particular interest are anogenital warts (or venereal

warts), a very common sexually transmitted disease

correlated with cervical and anal cancer. Treatment

includes topical application of caustic agents,

cryosurgery, and laser surgery.

Waiver: States may apply to the Health Care Financing

Administration of the Department of Health and

Human Services for Federal waivers that would

grant the State permission to waive certain provisions of the Medicaid statue, thereby allowing

implementation of the proposed demonstration

project. See also demonstration.
References
References

1.

2.

3.

4.

5.

6.

7.

7a.

8.

9.

10.

11.

12.

13.

Aaron, H., and Schwartz, W., The Painful Prescription: Rationing Hospital Care (Washington, DC:

The Brookings Institution, 1984).

Aday, L. A., Andersen, R. M,, and Fleming, G, V.,

Health Care in the U. S.: Equitable for Whom?

(Beverly Hills, CA: Sage Publications, 1980).

American Academy of Pediatrics, Committee on

Infectious Diseases, Report of the Committee on

Infectious Disease, 22nd Edition (Evanston, IL:

AAP 1991).

American Academy of Pediatrics, Department of

Research, “Medicaid State Reports, FY 1989,’ Elk

Grove Village, IL, March 1991.

American Dental Association, Bureau of Economic

and Behavioral Research, “ 1989 State and County

Level Demographic Report---Oregon,” Chicago,

IL, provided to the Office of Technology Assessment in 1991.

American Hospital Association, Hospital Statistics,

1991-92 Ed. (Chicago, IL: AHA, 1991).

American Hospital Association, Hospital Statistics,

1990-91 Ed. (Chicago, IL: AHA, 1990).

American Medical Association, Physicians’ Current Procedural Terminology, 4th Edition, (CPT-4)

(Chicago, IL: AMA, 1990).

American Public Welfare Association, “Reductions and Expansions in the Medicaid Program for

SFY 1992-Survey Results,” Washington, DC,

1992.

American Thoracic Society, “Standards for the

Diagnosis and Care of Patients With Chronic COPD

and Asthma, ’ American Review of Respiratory

Diseases 136(1):225-244, 1987.

Ammann, R., “A Critical Appraisal of Interventional Therapy in Chronic Pancreatitis, ’ EndoSCOPY 23(3): 191-193, 1991.

Anderson, J., Kaplan, R., Berry, C., et al., ‘‘Interday

Reliability of Function Assessment for a Health

Status Measure,’ hledical Care 27(1 1):1076-1083,

1989.

Anderson, R., Aday, L., Lyttle, C., et al,, Ambulatory Care and Insurance Coverage in an Era of

Constraint (Chicago, IL: Pluribus Press, 1987).

Arnold, J., Zuvekas, A., Needleman, J., et al.,

‘ ‘Incorporating Health Status Indicators Into the

Measurement of MedicaI Undersemice, ” prepared

by Lewin and Associates, Inc., Washington, DC, for

the Health Resources and Services Administration,

U.S. Department of Health and Human Services,

November 1987.

m.-

14.

15.

16.

17.

18.

19.

20.

21,

22.

23,

24.

25.

26.

Asch, D., and Patton, J., background material and

contractor paper prepared for the Office of Technology Assessment, August 1991.

Bane, M., and Ellwood, D., ‘‘Slipping Into and Out

of Poverty: The Dynamics of Spells,’ Journal of

Human Resources 21: 1-23, winter 1986.

Behrrnan, R. and Vaughan, V., Nelson I’extbook of

Pediatrics, 13th Edition (Philadelphia, PA: W.B.

Saunders Co., 1987)

Bell, J., Beyna, L, McCanna, M., et al., “Primary

Care Case Management in Medicaid: Findings

From Six Case Studies,” working paper prepared

by James Bell Associates, IPc., Arlington, VA, for

the Health Care Financing Administration, HCFA

Contract No. 500-83-0058, March 1987.

Bergner, M., Kaplan, R., and Ware, J., “Evaluating

Health Measures— Commentary: Measuring Overall Health: An Evaluation of Three Important Approaches,’ Journul of Chronic Diseases 40(Suppl.

1):23 S-26S, 1987,

Bishop, B., Government Relations Manager, Kaiser

Foundation Health Plan of the Northwest, Portland,

OR, letter to E.J Power, Office of Technology

Assessment, Washington, DC, Mar. 5, 1992.

Blendon, R., Donelan, K,, VanDeusen, C,, et al.,

‘‘The Uninsured and the Debate Over the Repeal of

the Massachussets IJniversal Health Care Law, ”

Journal of the American ikledical Association 267

(8):1113-1117, 1992.

Boyle, M., and Torrance, G., ‘‘Developing Multiattribute Health Indexes,” ilZedical Care 22(1 1):1045-

1057, 1984.

Braveman, P., Egerter, S., Bemett, T., et al.,

“Differences in Hospital Allocation Among Sick

Newborns According to Insurance Coverage,”

Journal of the American A4edical Association 266

(23):3300-3308, 1991.

Breyel, J., Senior Staff Analyst, Maternal and Child

Health Policy, National Governors’ Association,

personal communication, Washington, DC, Oct. 17,

1991.

Brook, R,, Ware, J., Rogers, W,, et al., “The Effect

of Coinsurance on the Health Of Adults: Results

From the Rand Health Insurance Experiment,’ The

Rand Corp., Santa Monica, CA, RAND/R-3055-

HHS, 1984.

Brown, L., “The National Politics of Oregon’s

Rationing Plan,’ Health Affairs 10(2):28-51, 1991.

Bush, G., President of the United States, “Address

Before a Joint Session of the Congress on the State

of the Union,” Weekly Compilation of Presidential

Documents 28(5):170-176, 1992.

–31 /–
318 ● Evaluation of the Oregon Medicaid Proposal

27.

28.

29.

30.

31.

32,

33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

Buyse, M. (cd.) Birth Defects Encyclopedia (Cambridge, MA: Blackwell Scientific Publications,

1990).

Callahan, D., “Ethics and Priority Setting in Oregon,” Health A.@airs 10(2):78-87, 1991.

Campbell, D., and Stanley, J., Experimental and

Quasi-Experimental Designs for Research (Chicago, IL: Rand McNally, 1966).

Carlson, J., Associate Director of Government

Affairs, Oregon Medical Association, as quoted in

Oregon Health Forum, January 1992, p. 4.

Casscells, W., “Special Report: Heart Transplantation, Recent Policy Developments,” New England

Jourrud of Med”cine 315(21):1365-1368, November 1986.

Charnplin, R., and Gale, R., “Bone Marrow Transplantation: Its Biology and Role as Treatment in

Acute and Chronic Ixukemias,’ Annals of the New

York Academy of Sciences 511: 447-458, 1987,

Chassin, M., presentation at the Society for Medical

Decision Making 1990 Annual Meeting, Nov. 11,

1990.

Coffman, D., Researcher, Oregon Health Services

Commission, Salem, OR, memorandum to J. Eden,

OffIce of Technology Assessment, Feb. 3, 1992.

Cot%nan, D., Researcher, Oregon Health Services

Commission, Salem, OR, personal communications, Mar. 25, Dec. 17, and Dec. 20, 1991, and Jan.

17 and Apr. 2, 1992.

Commerce Clearinghouse, Inc., Aledicareandh4edicaid Guide, vol. 3 (Chicago, IL: Commerce Clearinghouse, Inc., 1992), p. 6237-2.

Commission on Professional and Hospital Activities, Annotated ICD-9-CMInternational Classification of Disease, 9th Revision, Clinical Modijlcation

(Ann Arbor, MI: Edwards Brothers, Inc., 1988).

Concannon, K., Director of Human Resources,

Office of Medical Assistance programs, Salem, OR,

letter to the Emergency Board of the Oregon State

Legislature, Nov. 20, 1991.

Cook, T, and (lunpbell, D., Quasi-Experimentation: Design & Analysis Issues for Field Settings

(Boston, MA: Houghton Mifflin Co., 1979).

Coopers & Lybran~ “Oregon Medicaid Basic

Health Services Program: Calculation of Per Capita

Costs Report,” San Francisco, CA, May 1, 1991.

Coopers & Lybrand, “State of Oregon: Cost

Effectiveness Analysis for the PCO/HMO program

for the Period March 1985 Through September

1988,” &m Francisco, CA, May 19, 1989.

Coopers & Lybrand, San Fmncisco, CA, unpublished data provided to the Office of Technology

Assessment, September 1991.

Crawshaw, R., Garland, M., Hines, B., et al.,

“Oregon Health Decisions: An Experiment With

Informed Community Consent,” Journal of the

44.

45.

46.

47.

48.

49.

50.

51.

52.

53.

54.

55.

56.

57.

58.

59.

American MedicalAssociation 254(22):3213-3216,

1985.

Crenshaw, A. (cd.), Campbell’s Operative Orthopaeth”cs, 8th Edition, vol. v (St. Louis, MO: Mosby

Year Book, 1992).

Curtis, A., Konrad, H., and Zarnboni, W., “Hyperbaric Oxygen Therapy-An Ovemiew,” PZastic

SurgicaZ Nursing 10(2):63-68, summer 1990.

Daa.r, E., and Meyer, R., ‘‘Medical Management of

AIDS Patients: Bacterial and Fungal Infections,”

Medical Clinics of North America 76(1):173-203,

1992.

Daniels, N., “Is the Oregon Rationing Plan Fair?’

Journal of the American Medical Association 265

(17):2232-2235, 1991.

Davis, J., Group Pe~orrnance (New York, NY:

Addison-Wesley Publishing Co., 1969).

Davis, K., “Expanding Medicare and Employer

Plans To Achieve Universal Health Insurance, ”

Journal of the American Medical Association 265

(19):2525-2528, 1991.

Davis, K., and Rowland, D., “Uninsured and

Undersenwd: Inequities in Health Care in the

United States,” Milbank Memorial Fund Quarterly

Health Society 61(2):149-176, 1983.

Dennis, D. (cd.), Clinical Dermatology, 18th Revision (Philadelphia, PA: J.B. Lippincott, Co., 1991).

DiPrete, R., Managed Health Care Marketing Manager, Office of Medical Assistance, Oregon Department of Human Resources, Salem, OR, personal

communication, Sept. 11, 1991.

Dixon, J., and Welch, H., “Priority Setting: ksons

From Oregon,” The Luncet 337(8754):891-894,

1991.

Eddy, D., ‘ ‘Oregon’s Methods: Did CostEffectiveness Analysis Fail?’ Journal of the AmericanMedicalAssociation 266(16):21 35-2141,1991.

Eddy, D., “Oregon’s Plan: Should It Be Approved?’ ‘Journal of the America nMe&”calAssocia -

tion 266(17):2439-2445, 1991.

Edwards, C., and Bouchier, I. (eds.), Davia30n’s

Principles and Practice of Medicine (Edinburgh,

Scotland: Churchill Livingstone, 1991).

Ehrenhaft, P., background material on neonatal care

services prepared under contract for the Office of

Technology Assessment, Washington, DC, July

1991.

Ehrenhaft, P., Neonatal Intensive Care for LO W

Birthweight Infants: Costs and Effectiveness

(Health Technology Case Study 38) (Washington,

DC: Office of Technology Assessment, December

1987).

Ellwood, D., and Adarns, K., ‘‘Medicaid Mysteries:

Transitional Benefits, Medicaid Coverage, and

Welfare Exits,” Health Care Financing Review

1990 Annual Supplement, December 1990.
References ● 319

60.

61.

62.

63.

64.

65.

66.

67.

68.

69.

70.

71.

72.

73.

74.

Employee Benefit Research Institute, “Sources of

Health Insurance and Characteristics of the Uninsured: Analysis of the March 1991 Current Population Survey,” EBRI Issue Brief No. 123, February

1992.

Enthoven, A., and Kronick, R., “Universal Health

Insurance Through Incentives Reform,’ Journul of

the American Medical Association 265(19):2532-

2536, 1991.

Erickson, P., Kendall, E., Anderson, J., et al.,

“Using Composite Health Status Measures To

Assess the Nation’s Health,” Medical Care 27(3,

Suppl.):S66-S76, 1989.

Feeny, D., and Torrance, G., ‘Incorporating UtiMyBased Quality-of Life Assessment Measures in

Clinical Trials: Two Examples,” Medical Care

27(3, Suppl.):S190-S204, 1989.

Fefer, A., and Thomas, E., “Bone Marrow Transplantation for the Treatment of Chronic Myelogenous Leukemia,” Important Advances in Oncol -

0# 1990, 143-158, 1990.

Fein, R., “The Health Security Partnership: A

Federal-State Universal Insurance and CostContainment Program, ‘‘ Journal of the American

Medical Association 265(19):2555-2558, 1991.

Feltes, B,, Director of Medicaid Eligibility, Maine

Department of Human Services, Augusta, ME,

personal communication, Feb. 6, 1992.

Fisher, J., and Frost, J., “Epilepsy,” Journal of

Nuclear Medicine 32(4):651-659, 1991.

Flernmin g, D,, Deputy State Epidemiologist, Health

Division, Oregon Department of Human Resources,

Portland, OR, personal communications, Oct. 2 and

Oct. 15, 1991.

Ford, R., and McLaughlin, F., “Effects of Group

Composition on Decision Search Activity,” Journal of Business Research 1(1):15-25, 1976.

Fox, D., and Uichter, H., “Rationing Care in

Oregon: The New Accountability,” Health Aflairs

10(2):7-27, 1991.

Freeman, H., Blendon, R., Aiken, L., et al., “Americans Report Their Access to Health Care, ’ Health

A&airs 6(1):6-8, 1987.

Freund, D., Fox, P., Rossiter, L., et al., “Evaluation

of the Medicaid Competition Demonstrations, ’

Health Care Financing Review 11(2):81-97, winter

1989.

Froberg, D., and Kane, R., “Methodology for

Measuring Health-State Preferences—I: Measurement Strategies, ’ Journal of Clinical Epidemiology

42(4):345-354, 1989.

Froberg, D., and Kane, R., “Methodology for

Measuring Health-State Preferences-II: Scaling

Methods,” Journal of Clinical Epiderniulogy 42(5):459-

471, 1989.

75.

76.

77.

78.

79.

80,

81.

82.

83.

84.

85.

86.

87.

88.

89.

90.

Froberg, D., and Kane, R., “Methodology for

Measuring Health-State Preferences-lII: Population and Context Effects,” Journal of Clinical

Epiakmiology 42(6):585-592, 1989.

Froberg, D. and Kane, R., “Methodology for

Measuring Health-State Preferences-IV: Progress

and a Research Agenda,” Journal of Clinical

Epidemiology 42(7):675-85, 1989.

Fuller, J., Office of Medical Assistance programs,

Department of Human Resources, State of Oregon,

personal communication, Feb. 11, 1992.

Gaisford, J., Contracts Officer, Office of Medical

Assistance Programs, Department of Human Resources, State of Oregon, Salem, OR, personal

communication, Jan. 26, 1992.

Garland, M., “Setting Health Care Priorities in

Oregon,” Health Matrix 1(2):139-156, 1991.

Giardino, A., Philadelphia, PA, background material prepared under contract to the Office of

Technology Assessment, Washington, DC, August

1991.

Glotzer, D., Sager, A., SOColar, D., et al., “Prior

Approval in the Pediatric Emergency Room,”

Pediatrics 88(4):674-680, 1991.

Goldstein, A., “Poor Required To Have Own

Doctor Under MD. ’s New Medicaid program,”

Washington Post, Dec. 9, 1991, p. 1 (coI. 1).

Golenski, J., Founder, Bioethics Consultation Group,

Berkeley, CA, letter to E. Power, Office of Technology Assessment, Mar. 5, 1992.

Golenski, J., “A Report on the Oregon Medicaid

Priority Setting Project,” Bioethics Consultation

Group, Inc., March 1990.

Granneman, T., “Priority Setting: A Sensible Approach to Medicaid Policy?” Inquiry 28(2):300-

305, 1991.

Green, J., and Arno, P., “The ‘Medicaidiz.ation’ of

AIDS: Trends in the Financing of HIV-Related

Medical Care,” Journal of the American Medical

Association 264(10):1261-1266, 1990.

Greenberg, E., Chute, C., Stukel, T, et al., “Social

and Economic Factors in the Choice of Lung Cancer

Treatments,” The New England Journal of Medicine 318(10):612-617, Mar. 10, 1988.

Hadley, D., PCO Analyst, Office of Medical Assistance Programs, Department of Human Resources,

State of Oregon, Salem, OR, personal communication, Oct. 2, 1991.

Hadley, J., Steinberg, E. P., and Feder, J., “Comparison of Uninsured and Privately Insured Patients:

Condition on Admission, Resource Use, and Outcome, ” Journal of the American Medical Association 265(3):374-379, 1991.

Hadorn, D,, “Setting Health Care Priorities in

Oregon. Cost-effectiveness Meets the Rule of
320 . Evaluation of the Oregon Medicaid Proposal

91.

92.

93.

94.

95.

96.

97.

98.

99.

100.

101.

102.

103.

104.

105.

106.

107.

Rescue,’ Journal of the American Medical Association 265(17):2218-2225, 1991.

Hasnain, R., and Garland, M., “Repofi to the Health

Services Commission To Identify Public W.lues for

Use in the Health Services Prioritization Process,’

Oregon Health Decisions, Portland, OR, April

1990.

Health Insurance Association of America, Source

Book of Health Insurance Data (Washington, DC:

HLAA, 1991).

Health News Daily, “55 Percent of Medicaid

Emergency Room Patients Needed Only Routine

Care,” Chevy Chase, MD, Nov. 11, 1991.

Heginbotham, C., “Rationing,” British MedicaZ

Journal 304(6825):49649, 1992.

Holahan, J., and Zedlewski, S., “Expanding hkxiicaid To Cover Uninsured Americans,” HeaZth Affairs 10(1):45-61, 1991.

Honigsbaum, F., “Who Shall Live? Who Shall Die?

Oregon ’s Health Financing Proposals” King’s Fund

College Papers, October 1991.

Hudson, T., “The Medicaid Maze: States and

Hospitals Rake New Paths in Search of Funding,”

Hospitals 65(1 1):26-31, 1991.

Hunt, S., Senior Consultant, Coopers & LybranL

Inc., San Francisco, CA, personal communication,

Nov. 11, 1991 and Jan. 6, 1992.

Hurst, J. (cd), Medicine for Practicing Physicians,

2ndEdition (Boston, MA: Butterworth Press, 1988).

Hussey, T, Director, Medicare and New Product

Development, Kaiser Permanence, Portland, OR,

personal communication, Jan. 15, 1992.

Intergovernmental Health Policy Project, “Governors Seek Delay of Medicaid Mandates, ’ State

Health Notes 110(2):3, 1991.

Jencks, S. and Benedict, M., “Accessibility and

Effectiveness of Care Under Medicaid,” Health

Care Financing Review 1990 Annual Supplement,

December 1990,

Johns, L., and Adler, G., “Evaluation of Recent

Changes in Medicaid,” Health Aflairs 9(1):171-

181, 1989.

Johnson, C., “ ‘The Status of Health Care Among

Black Americans’: Address Before the Congress of

National Black Churches,” Journal of the National

Medical Association 83(2):125-129, 1991.

Kaplan, R., Professor, Department of Community

and Family Medicine, University of California at

San Diego, personal communications, Feb. 4 and

Mar. 4, 1992.

Kaplan, R., and Anderson J., “The General Health

Policy Model: An Integrated Approach,” Quality of

Life Assessments in Clinical Trials, B. Spilker (cd)

(New Yorlq NY: Raven Press Ltd., 1990).

Kaplan, R., and Anderson, J., “A General Health

Policy Model: Update and Applications,” Health

108.

109.

110.

111.

112.

113.

114.

115.

116.

117.

118.

119.

120.

121.

122.

Services Research 23(2):203-235, June 1988.

Kaplan, R., Anderson, J., Wu, A., et al., “The

Quality of Well-Being Scale: Applications in AIDS,

Cystic Fibrosis, and Arthritis,” Medical Care 27(3

Suppl.):S27-S43, 1989.

Kaplan, R., Bush, J., and Berry, C., “Health Status:

Types of Validity and the Index of Well-Being,”

Health Services Research 11(4): 478-506, 1976.

Kaplan, R., Debon, M., and Anderson, B., “Effects

of Number of Rating Scale Points Upon Utilities in

a Quality of Well-Being Scale, ” MedicaZ Care

29(10):1061-1064, 1991.

Kaspar, J., “The Importance of ~ of Usual

Source of Care for Children’s Physician Access and

Expenditures,” Medical Care 25(5): 386-398, May

1987,

Kealich, A., and Fancher, B., Officers, General

Internal Medicine Society, Washington, DC, personal communication, Jan. 23, 1991.

Kessinger, A., Nademanee, A., Forman, S., et al.,

“Autologous Bone Marrow Transplantation for

Hodgkin’s and Non-Hodgkin’s Lymphoma,” Hematology Oncology Cltiics ofNorth Amen”ca 4(3):577-

587, 1990.

Kinney, S., Medicaid Coordinator, Public Health

Service, Clackamas County Department of Human

Services, Oregon City, OR, memoranda to the

Office of Technology Assessment, Jan. 8, Jan. 21,

and Mar. 13, 1992.

Kitzhaber, J., “A Healthier Approach to Health

Care,” Issues in Science and Technology 7(2):59-

65, 1990-91.

Klein, R., ‘‘On the Oregon Trail: Rationing Health

Care,” British Medical Journal 302(6767):496-

499, 1991

Klet.ke, P., et al., ‘‘The Extent of Physician Participation in Medicaid: A Comparison of Physician

Estimates and Aggregated Patient Records,”

HeaZth Services Research 20(5):503-523, December 1985.

Klevit, H., Member, Oregon Health Services Commission, presentation at “Health Care: The Oregon

Solution” meeting, Portland, OR, Aug. 9, 1991.

Klevit, H., Member, Oregon Health Services Commission, briefing before Department of Health and

Human Services Interagency Task Force, Washington, DC, Nov. 15, 1991.

Klevit, H., Member, Oregon Health Services Commission, personal communication, Feb. 27, 1991.

Kosterlitz, J., “Seeking the Cure,” National Jourrud 22(12):708-714, 1990.

Kreft, J., Assistant Administrator, Budget and

Management Division, Oregon Department of Revenue, Salem, OR, personal communication, Feb. 6,

1992.
References ● 321

123.

124.

125.

126.

127.

128.

129.

130.

131.

132.

133.

134.

135.

Lawrence, R., chairman, U.S. Preventive Services

Task Force, Cambridge, MA, letter to colleagues,

1989.

IAkowitz, D., and Monheit, A., Health Insurance,

Use of Health Services, and Health Care Expenditures, National Medical Expenditure Survey Research Findings 12, AHCPR Pub. No. 924017

(Rockville, MD: Agency for Health Care Policy and

Research, December 1991).

Lester, A., Eriksen, N., Nielson, H., et al., “NonTyphoid Salmonella Bacteraemia in Greater Copenhagen 1984 to 1988,’ European Journal of Clinical

Microbiology and infectious Diseases 10(6):486-

490, 1991.

I.Ansky, N., “Age as a Criterion for Rationing

Health Care,” New England Journal of Medicine

322(20):1813-1816, 1990.

bvit, K., L.azenby, H., Cowan, C., and htsch, S.,

“National Health Expenditures, 1990,” Health

Care Financing Review 13(1):29-71, 1991.

hwin, J., ‘ ‘Hawaii’s System of Universal Access of

Health Care Coverage,” paper presented at The

George Washington University National Health

Policy Forum, Washington, DC, Dec. 12, 1990.

Lipsey, M., “Theory as Method: Small Theories of

Treatments, “ in Research Methodology: Strengthening Causal Interpretations of Nonexperimental

Data, L. Sechrest, E. Perrin, and J. Bunker (wk.)

(Rockville, MD: U.S. Department of Health And

Human Sewices, Agency for Health Care Policy

and Research, May 1990).

Imng, S., and Settle, R., “An Evaluation of Utah’s

_@e case Management Program for Medicaid Recipients, ” MedicaZ Care 26(1 1):1021-1032,

November 1988.

Imtem, M., Katzenelson, V., Rotem, A., et al.,

“Impetigo Herpetiformis: A Variant of Pustular

Psoriasis or a Separate Entity?” Journal of the

AmericanAcademy ofDerrnatology 20(2, pt. 2):338-

341, 1989.

Lurie, N., Ward, N., Shapiro, M., et al., “Termination From Medi-Cal-Does It Affect Health?’ New

England Journal of Medicine 31 1(7):480-

484, 1984.

Marcus, J., Horan, D., and Robinson, J., “Tissue

Expansion: Past, Present, and Future,” Journal of

the American Academy of Dermatology, 23(5, pt.

1):813-824, November 1990.

Marks, J., Hospital Program Analyst, Office of

Medical Assistance, Oregon Department of Human

Resources, Salem, OR, personal communication,

Sept. 6, 1991.

Mason, R., Study Director, Survey Research Center,

Oregon State University, Corvallis, OR, personal

communication, July 13, 1990.

136.

137.

138.

139.

140.

141.

142.

143.

144.

145.

146.

147.

148.

149.

150.

McClusky, W., Lorell, W., and Cumrnin gs, R.,

‘‘The Cavovarus Foot Deformity,” CZinicaZ Orthopedics (247):27-37, 1989.

McDowell, I., and Newell, C., Measuring Health: A

Guide to Rating Scales and Questionnaires (New

York, NY: Oxford University Press, 1987).

McManus, P., Fox, H., Newacheck, P., et. al.,

unpublished data from a 1989 survey of State

Mcxiicaid programs, supported by a grant from the

Bureau of Maternal and Child Health and Resources

Development, Health Resources and Services Administration, Public Health Service, U.S. Department of Health and Human Services, Rockville,

MD, 1989.

Merrill, J., “State Initiatives for the Medically

Uninsured,” Health Care Financing Review 1990

Annual Supplement:161-166, 1990.

Miller, G., “The Magical Number Seven Plus or

Minus Two: Some Limits on Our Capacity To

Process Information,’ Psychology Review (63):81-

97, 1956.

Mosteller, F., Ware, J., and Levine, S,, ‘Final Panel:

Comments on the Conference on Advances in

Health Status Assessment,” Medical Care 27(3,

Suppl.):S282-S293, 1989.

Mulley, A., “Assessing Patients’ Utilities: Can the

Ends Justi~ the Means?” Medical Care 27(3,

Suppl.):S269-S281, 1989.

National Academy of State Health Policy, Medicaid

Managed Care: The State of the Art-A Guide for

States (Portland, ME: NASHP, September 1990).

National Association of Public Hospitals, Revised

State Medicaid Policies for Disproportionate Share

Hospitals: An Updated Status Report (Washington,

DC: NAPH, 1991).

National Center for Health Statistics, HeaZth, United

States 1990 (Hyattsville, MD: U.S. Public Health

Service, 1991).

National Governors’ Association, “Broadening Medicaid Coverage of Pregnant Women and Children:

State Policy Responses,” Washington, DC, February 1987.

National Governors’ Association and National Association of State Budget Officers, Fiscal Survey of

the States (Washington, DC: NGA/NASBO, 1991).

National Governors’ Association, MCH Update,

‘‘OBRA-86/87/89 Summary Status: Medicaid Coverage Options for Pregnant Women and Children, ’

Washington, DC, July 1991.

National Health Policy Forum, “Medicaid and

Managed Care: Is There Hope for This Marriage?”

Issue Brief No. 573, Washington, DC, July 1991.

National kgal Center for the Medically Dependent

and Disabled, Indianapolis, IN, memorandum, Dee.

5, 1991
322 ● Evaluation of the Oregon Medicaid Proposal

151.

152.

153.

154.

155.

156.

157.

158.

159.

160.

161.

Nickens, H., “Health Promotion and Disease Prevention Among Minorities,’ Health~airs 9(2):133-

143, 1990.

Nickens, H., “The Health Status of Minority

Populations in the United States,’ Western JournaZ

of Medicine 155(1):27-32, 1991.

Nunez, A., Administrator, Salud Medical Clinic,

Salem, OR, personal communication, Dec. 9,1991.

O’Nedl, J., Bassi, L., and Wolf, D., “The ~tion

of Welfare Spells,” Review of Economics and

Statistics 69:241-248, May 1987.

Oregon Association of Hospitals, Salem, OR, unpublished 1987-91 data on the distribution and

financial characteristics of Oregon hospitals, provided to the Office of Technology Assessment in

1991.

Oregon Association of Hospitals et. al., v. Concannon et. al., U.S. District Court, District of Oregon,

No. 88-225-RE.

Oregon Association of Hospitals and Oregon Association of Hospitals Litigation Task Force, memorandum of understanding with the State of Oregon

regarding Oregon Association of Hospitals et. al. v.

Concannon et. al., U.S. District Court, District of

Oregon, No. 88-225-RE, Salem, Oregon, February

1991.

Oregon Chiropractic Physicians Association, Portlan~ OR, unpublished data on supply of chiropractors in Oregon, provided to the OffIce of Technology Assessment July 5, 1991.

Oregon Department of Human Resources, Adult

and Family Services Division, Program Evaluation

Unit, Salem, OR, “A Study of Poverty Ixwel

Medical Program Recipients,” October 1990.

Oregon Department of Human Resources, Adult

and Family Services Division, Planning and Evaluation Unit, Salem, OR, “1989 Client Characteristics Study of ADC Recipients,” March 1990.

Oregon Department of Human Resources, Health

Division, Annual Vital Statistics Report (Salem,

OR: DHR, 1989).

161a. Oregon Department of Human Resources, Office

162.

163.

164.

of Health Policy, Rural Hospitals in Oregon: A

Report to the Emergency Board (Salem, OR:

OftIce of Health Policy, April 1990).

Oregon Department of Human Resources, Office of

Health Policy, Salem, OR, 1990 hospital fiiancial

and discharge data provided to the Oflice of

Technology Assessment in 1991.

Oregon Department of Human Resources, Office of

Health Policy, Salem, OR, unpublished data from

1990 nurse practitioner licensure lists, provided to

the Ofilce of Technology Assessment in 1991.

Oregon Department of Human Resources, OffIce of

Health Policy, Salem, OR, unpublished data from

the June 1991 Primary Care Clinics Survey, pro165.

166.

167.

168.

169.

170.

171.

172.

173.

174.

175.

176.

177.

vialed to the Office of Technology Assessment,

November 1991.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR “General

Rules and General Information,” Mar. 1, 1990.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, “Improving Quality Assurance, Program Evaluation,

and Monitoring,” not dated.

Oregon Department of Human Resources, OffIce of

Medical Assistance Programs, Salem, OR, MMIS

data on 1990 physician participation in Medicai~

provided to the Office of Technology Assessment,

Nov. 14, 1991.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, “Medicaid and the State of Oregon Medical Assistance

programs,” OMAP 3061, January 1991.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, “Medical Data Chart Book” February 1991 booklet,

February 1991.

Oregon Department of Human Resources, OffIce of

Medical Assistance Programs, Salem,O~ “MedicalSurgical Services Guide, Revise~” May 1, 1991.

Oregon Department of Human Resources, Oflice of

Medical Assistance Programs, Salem, OR, memorandum to Providers of Medical Services, July 1,

1991.

Oregon Department of Human Resources, Oflice of

Medical Assistance Programs, Salem, OR, “Narrative or Special Analysis” (preliminary legislative

budget package), budget page 36, 1991.

Oregon Department of Human Resources, Office of

MedicalAssistance Programs, Oregon Health Plan:

Ojferer’sConferences QuestionsandAnswers (Salq

OR: OMAP, Feb. 18, 1992).

Oregon Department of Human Resources, Ofllce of

Medical Assistance Progmrns, Oregon Health Plan:

PCO and FCHP Agreement (Salem, OR: OMAP,

Jan. 10, 1992).

Oxegon Department of Human Resources, Office of

Medical Assistance programs, Oregon Hea[th Plan:

Prepaid Health Plan Request for Applications

(Salem, OR: OMAP, Nov. 26, 1991).

Oregon Department of Human Resources, Office of

Medical Assistance programs, Oregon Health Plan:

Prepaid Health Plan Request for Applications

Additional Information (Salem, OR: OMAP, Feb. 7,

1992).

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, The

Oregon Medicaid Demonstration Waiver Application, submitted to the Health Care Financing

Administration Aug. 16, 1991.
References ● 323

178.

179.

180,

181.

182.

183.

184.

185.

186.

187.

188.

189.

190.

191,

192.

193,

Oregon Department of Human Resources, Office of

Medical Assistance Programs, The Oregon Medicaid Demonstration: Waiver Cost Estimate, prepared

by Coopers& Lybrand for the State of Oregon, Aug.

16, 1991.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, “Pink

Book,” 1991.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, public

assistance data by county (table 19A), April 1991.

Oregon Department of Human Resources, OffIce of

Medical Assistance Programs, Salem, OR, ‘ ‘Transplant Services Guide,” Nov. 9, 1990.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, unpublished Medicaid enrollment data by county, provided to the Office of Technology Assessment Aug.

28, 1991.

Oregon Department of Human Resources, Office of

Medical Assistance Programs, Salem, OR, unpublished enrollment data, 1991.

Oregon Department of Human Resources, Ofilce of

Medical Assistance Programs, Salem, OR, unpublished estimates of poor individuals covered by

Medicaid, 1991.

Oregon Department of Revenue, Salem, OR, “Measure 5 Fact Sheet,” March 1991.

Oregon Health Dmisions, Portland, OR, “Quality

of Life in Allocating Health Care Resources:

Principles Adopted by the Citizens Health Care

Parliament,” December 1988.

Oregon Health Forum, “No Relief in Sight To

Overcome Physician Disparity,” November 1991

issue, p. 4.

Oregon Health Sciences University, Office of Rural

Health, Physician Resources in Oregon: A Summary Report (Portland, OR: Oregon Health Sciences University, September 1991).

Oregon Health Sciences University, Office of Rural

Health, Portland, OR, unpublished 1990 physician

supply and distribution data, provided to the Office

of Technology Assessment in 1991.

Oregon Health Services Commission, Salem, OR,

list of proposed technical changes to the list, fax

transmission to J. Eden, Ofllce of Technology

Assessment, Mar. 30, 1992.

Oregon Health Services Commission, Salem, OR,

minutes from public hearings held September 1989

through February 1990.

Oregon Health Services Commission, Salem, OR,

“Missing ICD-9 Code Report,” February 1991.

Oregon Health Services Commission, Salem, OR,

‘‘Prioritization of Health Services: A Report to the

Governor and Legislature,” May 1, 1991.

194.

195.

196.

197.

198.

199.

2(M).

201.

202.

203.

204.

205.

206.

207.

208.

209.

210.

211.

Oregon Health Services Commission, Salem, OR,

“Preliminary Report,” Mar. 1, 1990.

Oregon Medical Association, Portlan~OR, “Bridging the Gap: The Role of Oregon Physicians in

Uncompensated Care,” 1989.

Oregon Optometric Association, Portland, OR,

unpublished 1990 data provided to the Office of

Technology Assessment in June 1991.

Oregon Primary Care Association, Portland, OR,

1990 data on location and characteristics of Federally Qualifkxi Health Centers and Rural Health

Clinics, providcxl to OTA in 1991.

Oregon State Board of Nursing, Annual Statistical

Report: Fiscal Year July 1, 1989-June 30, 1990

(Beaverton, OR: Oregon State Board of Nursing,

1990).

Oregon State Health Planning and Development

Agency, Committee for Counting the Medically

Indigent, “1986 Health Insurance Coverage Survey,” December 1986.

Oregon State Medicaid Management Council, Salem,

OR, “Minutes of Meeting of Sept. 11, 1991. ”

Paletta, C., Campbell, E., and Shehadi, S., “Tissue

Expanders in Children,” Journal of Pediatric

Surgery (26)1:22-25, 1991.

Physician Payment Review Commission, Annual

Report to Congress, 1991 (Washington, DC: PPRC,

1991).

Physician Payment Review Commission, Physician

Payment Under Medicaid, Report No. 914 (Washington, DC: PPRC, July 1991).

Pinney, E., Executive Director, Oregon Health

Action campaign, Salem, OR, personal communication, Jan. 25, 1991.

Pizzo, P., and Walsh, T., “Fungal Infections in the

Pediatric Cancer Patient,” Seminars in Oncology

17(3, Suppl. 6):6-9, 1990.

Plott, R., and Wagner, R., “Modem Treatment

Approaches to Vitiiigo,” Cutis 45(5):31 1-316,

1990.

Prospective Payment Assessment Comrnission, Medimcaid Hospital Payment Congressional Report, Report No. C-91-02 (Washington, DC: ProPAC, Oct.

1, 1991).

Punukollu, R., and Gopalswamy, N., “The Heapatorenal Syndrome,” Medical Clinics of North

America 74(4):933-943, 1990.

Raetzman, S., Reforming the Health Care System:

State Profiles 1990 (Washington, DC: American

Association of Retired Persons, 1991).

Randall, T., “Successful Liver Transplantation in

Older Patients Raises New Hopes, Challenges,

Ethics Questions,” Journal of the American Mech” -

cal Association 264(4):428-430, July 1990.

Read, J. L., Quinn, R. J., and Hoefer, M. A., “Measuring Overall Health: An Evaluation of Three
324 . Evaluation of the Oregon Medicaid Proposal

212.

213.

214.

215.

216.

217.

218.

219.

220.

221.

222.

223.

224.

225.

226.

Important Approaches,” Journal of Chronic Diseases 40(Suppl. 1):7 S-21S, 1987.

Read, L., Director, Prioritized Health Care Systems,

OffIce of Medical Assistance Programs, Oregon

Department of Human Resources, Salem, OR,

personal communications, June 21, July 10, July 15,

Aug. 30, and Dee. 4, 1991; Jan. 16 and 23, Feb. 12,

and Mar. 6 and 17, 1992.

Read, L., Director, Prioritized Health Care Systems,

Oftlce of Medical Assistance Programs, Oregon

Department of Human Resources, Salem, OR, letter

to E. Power, Office of Technology Assessment,

Mar. 4, 1992.

Relman, A., “The Trouble With Rationing,” New

England Journal of Medicine 323(13):911-913,

1990.

Reynolds, J., Department of Pediatrics, Oregon

Health Sciences University, Portland, OR, personal

communication to P. Ehrenhaft, Lake Oswego, OR,

July 10, 1991.

Reynolds, J,, ‘‘Oregon NICU Survival Statistics for

1988 -1989,” unpublished rnimeo, Portland, OR,

undated.

Rmkunas, R., Specialist, Social Legislation, Congressional Research Service, Washington, DC, personal communication, April 1992.

Robertson, R., “Pancreas Transplantation in Humans With Diabetes Mellitus, Diabetes 40(9): 1085-

1089, 1991.

Rojas, C., Fiscal Ofi3cer, Salud Medical Clinic,

Salem, OR, personal communication, Feb. 6, 1992.

Rosenbaum, S., Director of Health Research, Children’s Defense Fund, Washington, DC, memorandum to C. Behney, Office of Technology Assessment, May 21, 1991.

Rosenbaum, S., Director of Health Research, Children’s Defense Fund, memorandum to interested

persons, Sept. 10, 1991.

Rosenbaum, S., Senior Research Staff Scientist,

Center for Health Policy Research, George Washington University, Washington, DC, personal communication, Jan. 13 and Mar. 6, 1992.

Ross, K., Hospital Program Manager, Office of

Medical Assistance Programs, Oregon Department

of Human Resources, Salem, OR, personal communication, July 3, 1991.

Rothenberg, “Who Cares? The Evolution of the

Legal Duty To Provide Emergency Care,’ Houston

L.uw Review 26:21-76, 1989.

Rovner, J., “Cost of Medicaid Puts States in

Tightening Budget Vise,” Congressional QuarterZy 49(20):1277-1284, 1991.

Rovner, J., “States Bargain for Some Relief From

Medicaid Restrictions, ” Congressional Quarterly

49(48):3531-3532, 1991.

227.

228.

229.

230.

231.

232.

233.

234.

235,

236.

237.

238.

239.

240.

Rowe, G., Wright, G., and Bolger, F., “Delphi: A

Reevaluation of Research and Theory,” Technological Forecasting and Social Change 39(2):235-251,

1991.

Rowland, D., Lyons, B., and Edwards, J., “Medicaid: Health Care for the Poor in the Reagan Era,’

Annual Review of Public Health 9:427-450, 1988.

Rubenstein, E., and Federman, D. (eds.), Scientific

American Medicine (New York NY: Scientific

American, Inc., 1987).

Rudolph, A., and Hoffinan, J. (eds.), Pediatrics,

17th Edition (Norw~ (X’: Appleton-CenturyCrofts, 1982).

Rundall, T, and Wheeler, J., “The Effect of Income

on Use of Preventive Care: An Evaluation of

Alternative Explamtions,” Journal of Health and

Social Behavior 20:397, 1979.

Rymer, M., and Adler, G., ‘children and Medicaid:

The Experience in Four States,” Lexington, MA,

prepared for Department of Health and Human

Services, Health Care Financing Administration,

Office of Research and Demonstrations, HCFA

Contract N0.500-84-O037, October 1987.

Sabiston, D., Jr. (cd.), Textbook of Surgery, 14th

Edition (Philadelphia, PA: W.B. Saunders Co.,

1991).

Sackett, D.L. and Torrance, G. W., “The Utility of

Different Health States as Perceived by the General

Public,” Journal of Chronic Diseases 31:697-704,

1978.

Schuster, M., Ims Angeles, CA, information prepared under contract to the Office of Technology

Assessment, August 1991.

Schwartz, W., and Aaron, H., ‘The Achilles Heel of

Health Care Rationing, New York Times, p. 1 (co1.

2) July 7, 1991.

Seagrave, C., Congressional Budget Office, testimony before the House Committee on Energy and

Commerce, Subcommittee on Health and the Environment, on “The Oregon Waiver Experiment,”

Sept. 16, Serial No. 10249 (Washington, DC: U.S.

Government Printing Office, 1991).

Sh.ikles, J., U.S. General Accounting Office, testimony before the House Committee on Energy and

Commerce, Subcommittee on Health and the Environment, on ‘‘The Oregon Waiver Experiment,’

Sept. 16, Serial No. 10249 (Washington, DC: U.S.

Government Printing Office, 1991).

Short, P., Cantor, J., and Monheit, A., “The

Dynamics of Medicaid Enrollment,” Inquiry (25)4:

504-516, 1988.

Short, P., and J_efkowitz, D., “Encouraging Preventive Services for hw-Income Children: The Effect

of Expanding Medicaid,” paper presented at the

Association for Health Services Research annual

meeting, San Diego, CA, July 1991.
References c 325

241.

242.

243.

244.

245.

246.

247.

248,

249.

250.

251.

252.

253.

254.

Silver, J., “From Baby Doe to Grandpa Doe: The

Impact of the Federal Age Discrimination Act on

the ‘Hidden’ Rationing of Medical Care, ” Catholic

University Law Review 37:993, 1016-1031, 1988.

Simpson J., and Strum, S., “How Good a Samaritan? Federal Income Tax Exemption for Charitable

Hospitals Reconsidered,’ Universi~ of Puget Sound

Luw Review 14:633-70, 1991.

Sipes-Metzler, P., Executive Director, Health Services Commission, Salem, OR, memorandum to S.

Hunt, Senior Consultant, Coopers & Lybrand, Inc.,

San Francisco, CA, Mar. 15, 1991.

Sipes-Metzler, P., Executive Director, Health Services Commission, Salem, OR, personal communications, Jan. 10, Feb. 25, Mar. 18, and Sept. 23,

1991; Jan. 17, Jan. 21, and Mar. 13, 1992.

Smith, E., Evaluator, Seattle Regional Office, U.S.

General Accounting Office, Seattle, WA, personal

communication, June 27, 1991.

Southern Regional Project on Infant Mortality, ‘An

Examination of the Barriers to Accessing WIC,

AFDC, and Medicaid Services,” Washington, DC,

September 1989.

Spilker, B. (cd.) Quality of Life Assessrnenls in

Clinical Trials (_New York, NY: Raven Press,

1990).

Starzl, T., Van Thiel, D., Tzakis, A., et al.,

“Orthotropic Liver Transplantation for Alcoholic

Cirrhosis,’ Journal of the American Medical Association 260(17):2542-2544, Nov. 4, 1988.

Stason, W., “Oregon’s Bold Medicaid Initiative, ”

Journal of the American Medical Association 265

(17):2237-2238, 1991.

State of Oregon, Official 1990 General Voters’

Pamphlet, ‘‘Measure No. 5,” pp. 32-33, November

1990.

SteinbrooL R., and Im, B., ‘‘The Oregon Medicaid

Demonstration Project— Will it Provide Adequate

Medical Care?’ New England Journal of Medicine

326(5):340-344, 1992.

Terhaar, B., Operations Project Manager, Prioritized Health Care, OffIce of Medical Assistance

Programs, Oregon Department of Human Resources, Salem, OR, personal communications, July

15 and 17, Oct. 18, Nov. 20, Dee, 4 and 5, 1991; and

Jan. 28, and Mar. 25, 1992.

Terhaar, B., Operations Project Manager, Prioritized Health Care Systems, Office of Medical

Assistance Programs, Oregon Department of Human

Resources, Salem, OR, memorandum to the Office

of Technology Assessment, Jan. 7, 1992.

Thorne, J., Director, Office of Medical Assistance

programs, Oregon Department of Human Resources, Salem, OR, memorandum to providers of

dental services, July 1, 1991.

255.

256.

257.

258.

259.

260.

261.

262.

263.

264,

265.

266.

267.

Theme, J., Director, Office of Medical Assistance

Programs, Oregon Department of Human Resources, Salem, OR, letter to M. Kennesson, Health

Care Financing Administration, Dec. 6, 1991.

Theme, J., Director, Office of Medical Assistance

programs, Oregon Department of Human Resources, Salem, OR, letter to Oregon Health Plan

prepaid health plan applicants regarding update of

the Oregon Health Plan request for applications,

Jan. 31, 1992.

Theme, J., Director, Office of Medical Assistance

Programs. Oregon Department of Human Resources, Salem, OR, letter to T. Troxel, Director,

Public Health Division, Clackarnas County Department of Human Services, Feb. 3, 1992.

Tilford, D., Assistant Regional Medical Director,

Kaiser-Portland, as cited in “Is Money Driving the

Pirates Into the Medicaid Market?” Oregon Health

Forum 1(6), October 1991.

Timm, I., Executive Director, Oregon Primary Care

Association, Portland, OR, personal communications, Nov. 1990; Aug. 9, Oct. 24, Nov., Dec. 5, and

Dec. 6, 1991; Jan. 16, 1992.

Torrance, G., Professor, Health Sciences Center,

McMaster University, Hamilton, Ontario, Canada,

personal communication, Mar. 9, 1992.

Troxel, T., Director, Public Health Division, Clackamas County Department of Human Services,

Portland, OR, personal communications, Dec. 4 and

Dec. 5, 1991; Mar. 16, 1992.

University of California at Ims Angeles Bone

Marrow Tmnspkmt Team, “Bone-MarrowTxansplantation in Severe Aplastic Anemia,” The Luncet

2(7992): 921-923, Oct. 30, 1976.

U.S. Bipartisan Commission on Comprehensive

Health Care-The Pepper Commission, A CalZ for

Action (Washington, DC: U.S. Government Printing Office, 1990).

U.S. Congress, Congressional Research Service,

‘‘The Family Support Act of 1988: How It Changes

the Aid to Families With Dependent Children

(AFDC) and Child Support Enforcement Programs,’ prepared by C. Solomon, Washington, DC,

Nov. 7, 1988.

U.S. Congress, Congressional Research Service,

‘‘Health Insurance Coverage: Characteristics of the

Insured and Uninsured Populations,” prepared by

M, Smith and D. Nuschler, Washington, DC, Aug.

19, 1991.

U.S. Congress, Congressional Research Service,

Medicaid Source Book: Background Data and

Analysis (Washington, DC: U.S. Government Printing Office, 1988).

U.S. Congress, House of Representatives, Committee on the Budget, Report of the Committee on the

Budget, House of Representatives to Accompany
326 ● Evaluation of the Oregon Medicaid Proposal

268.

269.

270.

271.

272.

273.

274.

275.

276.

277.

278.

279.

280.

H.R. 3299, Report 101-247 (Washington, DC: U.S.

Government Printing OffIce, 1989).

U.S. Congress, House of Representatives, Committee on Education and Labor, Americans With

Disabilities Act, H. Rpt. 101485, Pt. 2 (Washington, DC: U.S. Government Printing Office, 1990).

U.S. Congress, House of Representatives, Committee Energy and Commerce, Subcommittee on

Health and Environment, The Oregon Waiver

Experiment, Comm. Print No. 10249 (Washington,

DC: U.S. Government Printing Ofllce, 1991).

U.S. Congress, House of Representatives, Committee on Ways and Means, Overview of Entitlement

Programs: 1991 Green BootiBackground Material

and Data on Programs Within the JurisA”ction of

the Committee on Ways and Means (Washington,

DC: U.S. Government Printing Office, May 7,

1991).

U.S. Congress, Office of Technology Assessment,

Adolescent HealtkVohune II: Background and

the Electiveness of Selected Prevention and Treatment Services, OTA-H466 (Washington, DC: U.S.

Government Printing Of13ce$ November 1991).

U.S. Congress, Office of Technology Assessment,

Adolescent HealtbVolume III: Crosscutting Issues in the Delive~ of Health and Related Services,

OTA-H467 (Washington, DC: U.S. Government

Printing Office, June 1991).

U.S. Congress, Office of Technology Assessment,

Health Care in Rural America, OTA-H434 (Washington, DC: U.S. Government Printing Office,

September 1990).

U.S. Congress, Office of Technology Assessment,

Infertility: Medical and Social Choices, OTA-BA358 (Washington, DC: U.S. Government Printing

Ofllce, May 1988).

U.S. Congress, Office of Technology Assessment,

Advisory Panel Meeting, Apr. 29, 1991.

U.S. Department of Commerce, as cited in hvit et

al., 1991 (ref. 127).

U.S. Department of Commerce, Bureau of the

Census, “Census Bureau Completes Distribution of

1990 Redistricting Tabulations to States,” press

release, Washington, DC, Mar. 11, 1991.

U.S. Department of Commerce, Bureau of the

Census, “Census Bureau Releases Additional 1990

Census Population and Housing Information for

Oregon,” press release, Washington, DC, April

1991.

U.S. Dep@ment of Commerce, Bureau of the

Census, Current Population Survey, unpublished

data on health care coverage of persons by selected

characteristics, provided to the Office of Technology Assessment, Nov. 9, 1991.

U.S. Department of Commerce, Bureau of the

Census, “U.S. Department of Commerce News,”

281.

282.

283.

284.

285.

286.

287.

288.

289,

290.

291.

press release, Washington, DC, Sept. 26, 1991.

U.S. Department of Commerce, Bureau of the

Census, Money Income and Poverty Status in the

United States: 1989, Current Population Reports,

Series P-60, No. 168 (Washington, DC: U.S.

Government Printing OffIce, 1990).

U.S. Department of Commerce, Bureau of the

Census, Poverty in the United States: 1990, Current

Population Reports, Series P-60, No. 175 (Washington, DC: U.S. Government Printing Office,

1991).

U.S. Department of Commerce, Bureau of the

Census, Statistical Abstract of the United States:

1991 (lllth Edition) (Washington, DC: U.S. Government Printing Office, 1991).

U.S. Department of Health and Human Services,

Family Support Administration, OffIce of Family

Assistance, ‘Characteristics and Financial Circumstances of AFDC Recipients, FY 1989,” Washington, DC, not dated.

U.S. Department of Health and Human Services,

Food and Drug Administmtion, General and Plastic

Surgery Devices Panel, testimony, Nov. 12-14,

1991.

U.S. Department of Health and Human Services,

Health Care Financing Administration, Office of

Intergovernmental Affairs, Focus On..., June 1989.

U.S. Department of Health and Human Services,

Health Care Financing Administration, Division of

Intergovernmental Affairs, Medicaid Services State

by State, HCl?A Pub. No.02155-90 (Washington,

DC: U.S. Government Printing Office, October

1991).

U.S. Department of Health and Human Services,

Health Care Financing Administration, Office of

Research and Demonstrations, Medicare andMealcaid Data Book, 1990, HCFA Pub. No. 03314

(Washington, DC: U.S. Government Printing Office, March 1991).

U.S. Department of Health and Human Services,

Health Care Financing Administration, HCEA 2082

data from the Statistical Report on Medical Care:

Eligibles, Recipients, Payments and Services, Section D (2). Eligibles for Medical Care by Age,

Race/Ethnicity, and Sex (Baltimore, MD: Dec. 24,

1990).

U.S. Department of Health and Human Services,

Health Care Financing Administration, HCEA 2082

data from the Statistical Report on Medical Care:

Eligibles, Recipients, Payments and Services, Section D (10). Eligibles for Medical Care by Age,

Race/Ethnicity, and Sex (Baltimore, MD: HCFA,

Dec. 24, 1990).

U.S. Department of Health and Human Services,

Health Care Financing Administration, HCEA 64
References .327

292.

293.

294.

295.

296.

297.

298.

299.

300.

301.

302.

303.

data from Medicaid Financial Management Report

(Baltimore, MD: HCFA, Apr. 30, 1991).

U.S. Department of Health and Human Services,

Health Resources and Services Administration,

Bureau of Health Professions, Office of Data

Analysis and Management, 1990 physician and

population data from the Area Resource File,

provided to the Office of Technology Assessment

Feb. 14, 1990.

U.S. Department of Health and Human Services,

Public Health Service, Morbidity and Mortality

Weekly Report 40 (27):449-451, 1991.

U.S. Department of Health and Human Services,

Public Health Service, Agency for Hea.Ith Care

Policy and Research, ‘‘Assessment of Liver Transplantation,” Health Technology Assessment Reports, No.1, Rockville, MD, March 1990.

U.S. Department of Health and Human Services,

Public Health Service, Agency for Health Care

Policy and Research, “AHCPR Purpose and Programs,” Rockville, MD, September 1990.

U.S. Department of Health and Human Services,

Public Health Service, Health Resources and Services Administration, Bureau of Health Care Delivery and Assistance, Division of primary Care

Services, “An Atlas of State Profiles Which Estimate Number of Migrant and Seasonal Farmworkers and Members of Their Families, ” Rockville,

MD, March 1990,

U.S. Department of Health and Human Services,

Public Health Service, Agency for Health Care

Policy and Research, ‘‘National Medical Expenditure Survey, Usual Sources of Medical Care and

Their Characteristics, Research Findings 11,’ Rockville, MD, September 1991.

U.S. Department of Health and Human Services,

Public Health Service, National Institutes of Health

Consensus Development Conference, March 19-21,

1990, “Statement: Surgery for Epilepsy,” Epilepsia 31(6):806-812, 1990.

Van Thiel, D., Carr, B., Iwatsuki, S., et al., “Liver

Transplantation for Alcoholic Liver Disease, Viral

Hepatitis and Hepatic Neoplasm,” Transplantation Proceedings 23(3):1917-1921, 1991,

Vladeck, B., ‘ ‘Unhealthy Rations, ” The American

Prospect, surnmer:25-33, 1991.

Waid, M., “Addendum: A Brief Su~of the

Medicaid program,” Health Care Financing Review 1990 Annual Supplement, Baltimore, MD,

December 1990.

Walker, S., and Rosser, R. (eds.), Quality of L~e:

Assessment and Application (Lancaster, PA: MTP

Press Ltd., 1988).

Weissman, J., Stern, R., Fiedling, S., et al., “Delayed Access to Health Care: Risk Factors, Rea304.

305.

306.

307.

308.

309.

310.

311.

312.

313.

314.

315.

316,

317.

318.

319.

320.

sons, and Consequences, ‘‘Annals of Internal Medicine 114 (4):325-331, Feb. 15, 1991.

Welch, H., “Should the Health Care Forest Be

Selectively Thinned by Physicians or Clear Cut by

Payers?” Annals of Interred Medicine 115(3):

223-226, 1991.

Welch, W.P., “Giving Physicians Incentives To

Contain Costs Under Medicaid,” Health Care

Financing Review 12(12) :103-1 11, winter 1990.

Whitton, C., Fiscal Officer, West Salem Clinic,

Salem, OR, personal communication, Jan. 23,1992.

Widdison, A., Alvarez, C., Karanjia, W., et al.,

“Experimental Evidence of Beneficial Effects of

Ductd Decompression in Chronic Pancreatitis, ”

Endoscopy 23(3):151-54, 1991.

Wiener, J., ‘ ‘Oregon’s Plan for Health Care Rationing,” The Brookings Review winter: 26-31, 1992.

Wilensky, G., and Rossitner, L., ‘Coordinated Care

and Public Programs, ’ Health Affairs 10(4):62-77,

1991.

Williams, C., Evaluator, U.S. General Accounting

Office, Portland, OR, personal communication,

Dec. 9, 1991.

Wilson, J. (eds.), Harrison’s Principles of Internal

Medicine, 12th Edition (New York NY: McGrawHill, hlC., 1991).

Wing, K., School of Law, University of Puget

Sound, Tacoma, WA, memoranda prepared under

contract to the Office of Technology Assessment,

August 1991.

Wing, K. and Campbell, J., “The Emergency Room

Admission: How Far Does the ‘Open Door’ Go?”

University of Detroit Law Review 63:119-144,

1985.

Witter, W., and Bass, T., “Nontyphoidal Salmonella Enteric Infections and Bacteremia, Pediatric

Infectious Disease Journal 8(6):364-367, 1989.

World Health Organization, “Constitution of the

World Health Organization,” in Basic Documents

(Geneva: WHO, 1948).

World Health Organization, International Classification of Diseases, 9th Edition, Clinical Modification (Ann Arbor, MI: Edwards Brothers, Inc., 1980).

Wright, T., and Richart, R., “Role of Human

Papillomavirus in the Pathogenesis of Genital Tract

Warts and Cancer,” Gynecologic Oncology 37(2):151-

164, 1990,

Yedwab, B., Carmichael, J, and Grenet, E,, ‘Pneumonia Caused by Pasteurella Multocida. Journal

of Family Practice 31(3):313-314, 1990.

Young, G., and Cohen, B., “Inequities in Hospital

Care, the Massachusetts Experience,” Inquiry 28(3):

255-262, 1991.

Young, J., Executive Director, Oregon Chiropractic

Physicians Association, Portland, OR, ptXSOIld

communication, June 4, 1991.