Oregon providers press lawmakers for ombuds office to address insurer audits and parity gaps

PORTLAND, Ore. — Behavioral health providers told the Oregon House Committee on Behavioral Health and Health Care on May 29 that insurance audits, retroactive payment clawbacks and unclear enforcement of parity law are imposing severe operational and financial strain on small practices and are reducing patient access to care.

Providers asked legislators to create an ombuds office empowered to take and log complaints from providers, share that information with regulators and to escalate patterns of insurer conduct for enforcement or legislative fixes.

The request came during an informational hearing on House Bill 2,040 and House Bill 3,725, which the committee opened to hear provider testimony but did not move for action. Tiffany Ketterman, who identified herself as the owner of a group mental health practice with 45 staff that serves more than 800 clients and provides over 2,300 monthly appointments, described repeated audits and a “never ending threat to my personal financial stability.” She said, “It is by far the most exploitative, difficult, exhausting, stressful work I've ever experienced” and blamed insurance practices for much of the burden.

Larry Connor, a licensed professional counselor and legislative chair for the Oregon Mental Health Providers PAC, told the committee that providers have no consistent way to report suspected parity violations or abusive insurer practices. “There is no structure that allows me as the provider who knows the law and knows the violation to report that to DCBS,” he said, adding that an ombuds process would help surface up‑to‑date information on insurer behavior and gaps in enforcement.

Melissa Todd, a psychologist and solo practitioner, presented historical data to show both improvements since Oregon’s 2021 parity law and continuing problems with non‑quantitative treatment limitations (NQTLs) such as prior authorization, prepayment and postpayment audits and clawbacks. Todd noted HB 3046 (2021) as a law that improved transparency and reimbursement alignment but said regulators still lack line of sight into many modern medical‑management tactics insurers use.

Witnesses gave concrete examples: several providers reported major retroactive recoveries (“clawbacks”) for claims after insurers searched for secondary coverage; one provider reported an almost $10,000 clawback received the day before testimony and another reported a nearly $40,000 clawback in the prior year. Ketterman said multiple audits by Medicaid and commercial insurers have followed providers across years and that artificial‑intelligence‑enabled review tools threaten to scale audits from tens of cases to entire practices.

Speakers proposed an ombuds structure that could sit inside existing agencies or operate externally, gather reports from providers in real time, review insurers’ comparative analyses required by law, and share findings with the Department of Consumer and Business Services (DCBS) and the Oregon Health Authority (OHA). Ketterman and Connor said such a resource would allow providers to register complaints without requiring clients to file consumer complaints themselves.

Amber Redingazzini, a doctor of Chinese medicine and acupuncturist and president of the Oregon Association of Acupuncturists, told the committee that credentialing delays and contract terms also limit access to care. “No agency has the authority to regulate or enforce provider‑insurer contracts for fairness,” she said, describing a six‑month credentialing delay that kept her practice from using available clinicians.

Committee members asked about budget and structure. Representatives and witnesses suggested starting small; Ellen Penny, OHA’s patient ombuds, advised beginning with a single staff person and scaling with demand. Representative Nelson raised funding options including a modest premium surcharge or other fee; Nelson observed that even a small per‑member charge could fund several staff positions. The witnesses said they modeled HB 3,725 on an existing workers’ compensation small‑business ombuds structure.

Chair Rep. Noss closed the informational hearing without action and said the topic would require more study before any bill moved forward. He characterized the proposals as “big” and recommended additional work over the summer and fall so lawmakers could identify funding and operational models.