Health officials say Eugene medical chain, two Oregon insurers unreasonably raised costs

Oregon health officials called out three health care organizations this week for unreasonably driving up Oregonians’ medical costs.

The state in 2021 set a cap on annual spending growth for health care organizations at 3.4% per person, part of a regulatory bid to rein in rising health care costs. The Oregon Legislature authorized the program in 2019 and updated the law in 2021.

The Oregon Health Authority on Wednesday flagged three organizations for overshooting this limit between 2021 and 2022 without justifying the increase. They include Eugene-based Oregon Medical Group and two insurers, Moda Health and UnitedHealthcare, both of which managed Medicare Advantage plans.

Meanwhile, the state reported that 28 other health care organizations also overshot this limit but “had acceptable reasons.”

Justifications offered by the providers and insurers that the state deemed acceptable included expanding services such as behavioral health, longer hospital stays due to limited skilled nursing capacity, and increased Medicaid enrollment and usage.

“Health care is increasingly and unacceptably expensive, making quality health care out of reach for many working families and straining budgets of the businesses and government agencies that pay for health insurance,” Clare Pierce-Wrobel, the director of Oregon Health Authority’s health policy and analytics division, said in a statement.

The state found that cost of care for privately insured patients at Oregon Medical Group, which owns a chain of clinics in the Eugene area, surged by 6.5% — nearly double the state’s target growth rate. Oregon Medical Group was quietly purchased by Optum in late 2020. Following the purchase, more than 30 physicians left the group, leading to the dismissal of numerous patients in Lane County.

State health officials also cited UnitedHealthcare, a major insurer owned by the same parent company as Optum. The state reported that UnitedHealthcare’s Medicare Advantage plans rose by 6.4%.

The state also flagged Moda Health, a Portland-based insurance company, for unreasonably increasing its Medicare Advantage plan by 11.6%. Moda, however, ended the plan in December 2024.

The health care companies cited by the state did not immediately respond to emailed requests for comment.

The warnings won’t lead to financial penalties, the state said.

But starting next year, organizations whose cost increases exceed the limit without valid reasons must submit performance improvement plans detailing how they’ll reduce health care costs. The state will also start issuing fines next year if companies continue to miss the cost growth target.

— Kristine de Leon covers consumer health, retail, small business and data enterprise stories. Reach her at kdeleon@oregonian.com.

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