Or. Admin. R. 410-141-5280 - CCO ACQUISITIONS AND MERGERS: Determination Concerning Proposed Activity, Time For Decision, Grounds For Refusal

Current through Register Vol. 60, No. 12, December 1, 2021

(1) Prior to approving or disapproving the proposed activity, the Authority shall engage the public, Oregon's Medicaid Advisory Committee, and the Community Advisory Councils of the CCO. The Authority's engagement of the public shall include the following, coordinated with DCBS where efficient:
(a) Seeking recommendations by the Community Advisory Councils of the CCO regarding persons who should be notified,
(b) A public hearing in each service area of the CCO,
(c) A public comment period,
(d) An opportunity to provide input on a draft of the Authority's detailed analyses described under subsection (4),
(e) Seeking feedback from the Medicaid Advisory Committee, and
(f) Posting on the Authority's web site of the Form A and significant documents relating to the Form A. If any such document contains information protected from disclosure by state or federal law or protected from disclosure as a trade secret, as defined in ORS 192.345, including compensation paid to providers by the CCO, then the Authority shall redact the document pursuant to ORS 192.338.
(2) The Authority shall make a determination concerning the proposed activity described in OAR 410-141-5260 within a period that begins 60 days before the effective date of the activity. The Authority may refuse, after a public hearing, to approve a proposed activity if:
(a) The activity is contrary to law or would result in a prohibited combination of risks or classes of insurance;
(b) The activity is inequitable or unfair to the Members or shareholders of any CCO involved in, or to any other person affected by, the proposed activity. However, in connection with an acquisition of the CCO's voting securities from the CCO's shareholders, the Authority shall evaluate whether the proposed acquisition is fair to the shareholders of the CCO to be acquired only with respect to any shareholders that are unaffiliated with the acquiring party or parties and that would remain after the acquisition is completed;
(c) The activity would substantially reduce;
(A) The security of and service to be rendered to Members of any CCO involved in the proposed activity or would otherwise prejudice the interests of such Members or other Oregonians;
(B) Access to and quality of health care for Oregonians, or would substantially increase the cost of health care for Oregonians, including health care outside of the Medicaid program; or
(C) The ability of any CCO involved in the proposed activity to:
(i) Perform its contractual obligations to the Authority;
(ii) Innovate, coordinate care, provide value, and deliver high-quality services;
(iii) Demonstrate commitment to addressing health disparities and inequities;
(iv) Be strongly connected to the community served by the CCO, including the CCO's community advisory council, community health improvement plan, and the Authority requirements to engage with the community;
(v) Provide services cost effectively and within cost growth limits imposed by the Authority or the state;
(vi) Support social determinants of health in the community served by the CCO, as required by its Contract with the Authority; or
(vii) Satisfy the Authority's policy priorities as required by its contract with the Authority or as adopted by the Oregon Health Policy Board.
(d) The activity provides for a foreign or alien CCO to be an acquiring party, and the Authority further finds that the CCO cannot satisfy the requirements of this state for transacting the CCO business that would be affected by the activity.
(e) The activity or the completion of the activity would substantially diminish competition in this state or tend to create a monopoly. An activity that the Authority determines would substantially diminish competition in this state or tend to create a monopoly may be approved if within a specific period of time a party removes the basis upon which the Authority would have otherwise disapproved the activity.
(f) After the change of control or ownership, the CCO to which the activity described in OAR 410-141-5260 applies would not be able to satisfy the requirements for receiving a CCO contract to transact the line or lines of business for which the CCO is currently authorized.
(g) The financial condition of any acquiring party might jeopardize the financial stability of the CCO.
(h) The plans or proposals that the acquiring party has to liquidate the CCO, sell the CCO's assets or consolidate or merge the CCO with any person, or to make any other material change in the CCO's business or corporate structure or management, are unfair and unreasonable to the CCO's Members and not in the public interest.
(i) The competence, experience and integrity of the persons that would control the operation of the CCO are such that permitting the activity or permitting completion of the activity would not be in the interest of the CCO's Members and the public.
(j) Any CCO involved in the activity or any acquiring party does not comply with, or the activity presents a substantial risk that any such CCO or acquiring party will not comply with:
(A) ORS 414.625(2), with respect to the CCO's governing body;
(B) 42 C.F.R. Part 438, Subpart H or 42 C.F.R. 438.808, with respect to the CCO's ownership, control and affiliations;
(C) Minimum medical loss ratio requirements;
(D) Any other applicable law; or
(E) The CCO's contractual obligations to the Authority.
(k) The activity or completing the activity is likely to be hazardous or prejudicial to members of the CCO, other Medicaid members, or the insurance-buying public.
(l) The activity or completing the activity is likely to reduce the CCO's demonstrated commitment to addressing health disparities and inequities, create or increase disparities or inequities, or make it more difficult to achieve health equity in the state.
(m) The activity is subject to other material and reasonable objections.
(3) If the Authority does not approve the activity, then the activity may not proceed, without regard to whether DCBS has approved it. If the activity is subject to approval by DCBS, then:
(a) The Authority shall work in concert with DCBS to jointly analyze the proposed acquisition;
(b) The Authority may rely on DCBS as to grounds that are common to the DCBS approval and the Authority approval;
(c) The Authority shall exercise independent judgment as to grounds for the Authority's approval that are not grounds for DCBS approval; and
(d) The Authority shall approve the activity only if DCBS also approves the activity and shall do so concurrently.
(4) The Authority may disapprove, approve, or approve with conditions a proposed acquisition. OHA shall publish detailed analyses justifying OHA's decisions. If the Authority disapproves the proposed activity, the Authority shall promptly notify, in writing, the CCO and each acquiring party involved in the proposed activity, specifying the bases, factors and reasons for the disapproval and giving the CCO and each acquiring party that filed the statement relating to the proposed activity an opportunity to amend the statement, if possible, to obviate the Authority's objections.
(5) If the Authority determines that a party that proposes to acquire control of a CCO must maintain or restore the CCO's capital to a level required under the laws and rules of this state, the Authority shall make and communicate the determination to the acquiring party not later than 60 days after the acquiring party files the statement required under OAR 410-141-5265.
(6) The acquiring party or parties that filed Form A under OAR 410-141-5265 shall file any amendment to Form A that responds to the Authority's objection and, if a hearing was held on the proposed activity, shall resubmit the amendment at a hearing held under this section unless the Authority finds that a hearing is not necessary to protect the Members, shareholders or any other person the proposed activity affects.
(7) The Authority may retain at the acquiring party's expense any actuaries, accountants and other experts not otherwise a part of the Authority's staff as the Authority may reasonably need to assist the Authority in reviewing the proposed activity.
(8) The Authority may establish the effective date of an activity to which OAR 410-141-5260 applies in the order that approves the activity.
(9) If the Authority issues a notice of approval, the acquiring party and the CCO must submit to the Authority the disclosures required by 42 C.F.R. ยง 455.104.
(10) Within 60 days after receiving a notice of approval or disapproval, any CCO or other party to a proposed activity, including the CCO subject to the acquisition, may appeal the Authority's final order as provided in ORS chapter 183. For purposes of the judicial review, the specifications the Authority must set forth in the Authority's written notice are the findings of fact and conclusions of law of the Authority.
(11) Not later than the 30th day after consummation of an activity described in OAR 410-141-5260, the acquiring party shall submit to the Authority a statement that the activity has been consummated. The statement must be made under the oath of the presiding officer of the board of directors of the acquiring party.
(12) Not later than one year after consummation of an activity described in OAR 410-141-5260, the CCO subject to the acquisition shall submit to the Authority a retrospective review of the transaction. The retrospective review shall include analyses of the following (with any relevant supporting documentation, and with specific regard to each of the paragraphs of OAR 410-141-5265(5)(L)):
(a) The extent to which the business plans for the CCO after the proposed activity, as submitted to the Authority in response to OAR 410-141-5265(5)(L), have been realized; and
(b) The explanation for, and the CCO's planned rectification of, any respect in which those business plans have not been realized.


Or. Admin. R. 410-141-5280
DMAP 60-2019, adopt filed 12/18/2019, effective 1/1/2020; DMAP 3-2020, temporary amend filed 02/12/2020, effective 02/12/2020 through 08/09/2020; DMAP 38-2020, amend filed 08/05/2020, effective 08/07/2020;DMAP 39-2020, minor correction filed 08/07/2020, effective 8/7/2020

Statutory/Other Authority: ORS 413.042, 414.615, 414.625, 414.635 & 414.651

Statutes/Other Implemented: ORS 414.610 - 414.685

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