Heated hearing on cost growth target program ends with call for work group; no vote
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Summary
House Bill 40 38 — which would have imposed a 10-year moratorium or, per a -1 amendment, limited OHA enforcement and penalties in the cost growth target program — drew extensive testimony from insurers, providers and consumer advocates. Lawmakers closed the hearing and signaled a likely interim work group rather than immediate repeal.
House Bill 40 38 generated extended debate in the House Health Care Committee as insurers, hospitals, clinics, unions and consumer groups presented sharply different views about Oregon's cost growth target program.
Industry witnesses including Mary Ann Cooper of Regence Blue Cross Blue Shield told the committee the program's enforcement timeline, penalty structure and "reasonableness factors" can penalize organizations before they have time to improve, potentially shifting costs to consumers. "The current rules in the current program has major flaws," Cooper said, arguing the program can punish organizations for actions taken before guidance was provided and that penalties start at 5% and escalate in ways that could reach millions of dollars.
Insurers and independent clinics asked for an interim work group to craft specific fixes: caps on penalties, clearer payer-specific reasonableness factors, a reset mechanism after sustained compliance, and exclusions for plans governed by federal law. Several payers said fiscal and legal exposure — including where plans have left the market — made the current rules unfair or administratively unworkable.
Opposing repeal, consumer and labor advocates including Charlie Fisher of a statewide consumer group and Matt Swanson of SEIU defended the program as an important lever to gather data and press for accountability in a health system that has produced rapid cost increases. "We want this program to work," Fisher said. He and others noted that to date only a small share of entities that exceeded the target were found to have done so without reasonable basis, and that financial penalties carry multiple procedural protections and limits.
Committee members pressed witnesses on how to balance accountability and practical market realities: whether the program should be forward- or backward-looking, how to set targets relative to inflation and wages, and whether the state should create a broader approach to cost drivers. Several members said they would prefer a targeted interim work group to study rule changes rather than a wholesale repeal or multi-year moratorium. The chair closed the hearing and said the issue will likely be a subject of future bills and a work group; the bill did not move forward this session.