County, CCOs urge coordinated action as Medicaid behavioral health costs outpace revenue

Multnomah County commissioners heard a detailed briefing from county staff and the region's coordinated care organizations (CCOs) about how Medicaid-funded behavioral health services are delivered, paid for and under strain.

Commissioner Lynn Moyer, who co-sponsored the budget note prompting the briefing, told the board the goal was to clarify responsibilities across jurisdictions and to begin collaboration aimed at narrowing what she described as “gaping holes” in the system. “One of the reasons that we brought this budget note forward is the level of complexity that Oregon has created in its Medicaid system, particularly in behavioral health,” Moyer said.

Rachel Banks, Multnomah County's health department director, told the board the county serves as the local mental health authority and as the community mental health program (CMHP), with statutory obligations to provide a safety-net of services for uninsured and underinsured residents and to administer quality and reporting functions under the county financial assistance agreement (C-FAS) with Oregon Health Authority.

Representatives of the two regional CCOs — Mindy Statlander of Health Share of Oregon and Amit Shah of CareOregon — described how the region's pandemic-era investments rapidly expanded capacity and new service models, while utilization has since increased sharply. CareOregon presented data showing a small, high-acuity cohort (people with opioid or stimulant use disorders, psychosis or multiple overlapping diagnoses) drives a disproportionate share of costs and inpatient admissions; speakers said that cohort can account for about a quarter of total health-care costs.

As spending on services began to outpace Medicaid revenue in 2024 and 2025, CCOs said they used stewardship and equity criteria to make difficult trade-offs. Health Share's leadership described a framework of prioritizing "high-value access" that focuses limited capacity and funding on those most at risk of decompensation, suicide, overdose, relapse or need for higher levels of care, while trying to preserve culturally specific and crisis services.

CCO speakers listed many investments made between 2020 and 2024 — including expansion of low-barrier, peer-led addiction treatment and crisis services, withdrawal-management capacity, intensive outpatient programs for children and adults, behavioral health pharmacy services and health-record integration funding — and said those one-time and ongoing investments contributed both to improved capacity and to current higher utilization and costs.

Speakers also warned of a looming federal policy change. Health Share and Trillium presenters said implementation of HR1 will reintroduce more frequent eligibility redeterminations and work requirements, and cited state estimates that roughly 200,000 Oregonians could lose Medicaid coverage during implementation. "If you think about about a third of the Medicaid population lives in the tri-county area, that's about 70,000 or so community members that will be impacted," Statlander told the board, and called for coordinated outreach to help members retain coverage.

Commissioners pressed presenters on where responsibilities lie among the state, CCOs and counties — particularly for the Oregon State Hospital, inpatient lines, voluntary versus involuntary care and children's behavioral health. County and CCO staff answered that Oregon Health Authority manages state-level facilities and licensing while CCOs handle payment, utilization and contracting; they acknowledged children's behavioral-health access is a continuing gap that requires deeper follow-up.

What happens next: presenters and the board agreed to follow up with more data and targeted briefings. The county requested copies of regional gap analyses and CAST/OHSU reports; commissioners flagged cross-jurisdictional coordination, capacity planning, and outreach plans tied to HR1 as priority follow-ups for staff.