409-065-0035 Reasonable Causes of Cost Growth (1) The Authority must not impose a performance improvement plan outlined in OAR 409-065-0040 or financial penalty outlined in OAR 409-065-0045 on an entity that exceeded the cost growth target due to unforeseen market conditions or other equitable factors, as enumerated in section (2) of this rule. The Authority must conduct analyses to understand potential systematic causes, market conditions, or other factors that might result in entities exceeding the cost growth target. The Authority must determine, on a case-by-case basis, when such a condition or factor or a combination of such conditions or factors suffices as a reasonable cause for an entity to exceed the cost growth target (“determination of reasonableness”). (2) Reasonable cause for exceeding the cost growth target includes but is not limited to: (a) Changes in mandated benefits codified in Oregon Revised Statute, Oregon Administrative Rule, Federal law, or Federal Regulations, to the extent that the mandated benefits are not defrayed under applicable law; (b) Changes in federal, state, or local law that increases costs, including, but not limited to workforce and labor requirements and compliance requirements;; (c) New pharmaceuticals, and new uses of existing pharmaceuticals, or new medical treatments entering the market, including new medical procedures and devices; (d) Changes in taxes related to health care or other administrative requirements including but not limited to changes in medical loss ratio rebate requirements pursuant to state or federal regulation; (e) Acts of God such as natural disasters or pandemics; (f) Entity investments to improve population health or address health equity including but not limited to investments in primary care or behavioral health; (g) Macro-economic factors wholly outside of the ability of the entity to influence or mitigate, such as periods of significant inflation, supply chain shortages, or labor shortages; (h) A provider organization’s total compensation, defined as wages, benefits, salaries, bonuses, and incentive payments, paid to frontline workers; (i) High-cost patient or member outliers defined as per member per year costs totaling $1 million or more; and (j) Any other reasonable cause specified in writing by the Authority and published as guidance on the Program website. (3) The Authority must notify an entity in writing if the entity’s cost growth for that measurement period exceeded the cost growth target with statistical confidence and if the entity must participate in the Authority’s determination of reasonableness process, as specified in writing by the Authority and published on the Program website. (4) Entities must participate in conversations regarding the determination of reasonableness process with the Authority. Participation may include, but is not limited to, the entity or its delegate or authorized representative: (a) attending meetings with the Authority, (b) responding to Authority questions, or (c) providing supplemental documentation, analysis or data as requested to support claims of reasonable cost growth. (5) Failure of an entity to participate in conversations regarding the determination of reasonableness process upon request by the Authority may result in the Authority determining that the cost growth was unreasonable. (6) As part of the determination of reasonableness process, an entity that exceeds the cost growth target with statistical confidence may submit analyses and supporting documentation to the Authority for any and all potentially acceptable reasons for cost growth as the entity may identify. Such analyses and supporting documentation may include but are not limited to: (a) the quantified impact of the reasonable cause on the entity’s cost growth with detailed explanation of how the entity calculated the impact; (b) what the entity’s cost growth would have been had it not been for the reasonable cause, including a detailed explanation of how the entity calculated the cost growth; (c) sufficient documentation to support the claim of a reasonable cause; and (d) the aggregate amount of total compensation using a methodology posted by the Authority in sub-regulatory documentation on the Program website, if a provider organization claims total compensation paid to frontline workers as a reasonable cause, as specified in (2)(h) of this rule and OAR 409-065-0028. (7) The Authority may request additional information, documents and analyses as the Authority may require to evaluate an entity’s assertation of reasonable cause for exceeding the cost growth target. (8) No person shall file or cause to be filed with the Authority any statement, report, or other information required or permitted to be filed and known to such person to be false or misleading in any material aspect. (9) After reviewing information submitted by the entity, the Authority must determine whether the entity’s claim of reasonable cost growth for the measurement period is acceptable. (a) The Authority must determine that a payer or provider organization’s cost growth is reasonable if all of the cost growth above the cost growth target is due to one or more reasonable causes, as described in this rule. (b) If the Authority determines that any amount of cost growth above the cost growth target is unreasonable, accountability mechanisms shall apply, as specified in OAR 409-065-0040 and OAR 409-065-0045. (10) The Authority must issue a notice of intent to impose one of three possible determinations: cost growth is due to an acceptable reason(s), cost growth is not due to an acceptable reason(s), or the reason(s) for cost growth cannot be determined. (11) The Authority may, subject to OAR 409-065-0030, publish the final outcome of the conversations regarding the determination of reasonableness process. (12) The Authority must notify the payer or provider organization in writing if a Performance Improvement Plan is required, as per OAR 409-065-0040. (13) The Authority will deem there is reasonable cause for a provider organization exceeding the cost growth target if its frontline worker cost growth is greater than or equal to the total value of the provider organization’s cost growth above the target across all accountable markets. (14) A payer or provider organization that has received a determination that cost growth is not due to an acceptable reason may request a contested case hearing pursuant to the procedure outlined in OAR 409-065-0050. Statutory/Other Authority: ORS 442.386 Statutes/Other Implemented: ORS 442.386 History: OHP 4-2024, adopt filed 07/22/2024, effective 07/22/2024