Challenging Moda Health’s Unfair Practices: Why Filing a Complaint Mattered

A Discussion Paper

Concerned about Moda Health’s fraudulent and unfair contracting practices, independent mental health providers considered the merits and risks of filing a formal complaint. The Oregon Health Authority (OHA), the Oregon Department of Consumer and Business Services (DCBS), and the Oregon Attorney General (OAG) are the appropriate agencies to investigate such allegations.

The biggest challenges and obstacles have been creating opportunities for provider education, discussion and public and legislative awareness. Given the potential for unfair contracting, fraud, bad-faith contracting, and antitrust violations, it is imperative that providers take action to protect their financial stability, preserve the values of excellent patient care, and restore fair competition in Oregon’s healthcare market.

Where Should a Complaint Be Filed?

Moda Health’s misconduct, alleged in the Complaint, ranging from unfair financial risk-shifting to deceptive contract terms, potentially falls under the jurisdiction of multiple state agencies. The Oregon Health Authority (OHA) plays a key regulatory role, particularly in overseeing healthcare plans that serve public employees and Medicaid recipients. Filing a complaint with OHA was intended to lead to increased scrutiny of Moda’s contracts and possible enforcement actions. OHA was sent the MRI Complaint in October, 2024.

The Oregon Department of Consumer and Business Services (DCBS) is another viable option. DCBS regulates insurance companies and ensures compliance with fair business practices. Moda Health’s bait-and-switch tactics, in which providers are promised fair contract terms only to face a risk of restrictive and/or financially damaging policy changes, may violate state insurance regulations, warranting DCBS intervention. DCBS informed House Representative Kropf that DCBS is not able to process complaints filed with their department.

When there are fraud and antitrust concerns, the Oregon Attorney General (OAG) ideally should be engaged. The allegations against Moda Health include phantom networks, predatory contracting, and market manipulation, each undermine fair competition and violate public trust. The OAG has the power to prosecute fraudulent business practices and hold Moda Health accountable. The OAG referred the complaint filed with them to DCBS.

Finally, when corporate governance violations are suspected, the Oregon Secretary of State (SOS) may investigate and take steps to dissolve Moda’s business registration if its practices were found to be deceptive or unlawful. It is not clear whether the MRI Complaint may suggest Moda has violated corporate governance provisions. The Complaint was filed with the Oregon Attorney General for review.

The Risks of Filing a Complaint

Filing a complaint against a major health plan such as Moda Health has risks. Providers who challenge unfair practices may face professional retaliation, such as being excluded from insurance networks, receiving fewer patient referrals, or being subjected to increased administrative scrutiny. Moda Health’s capacity to shift contract terms mid-agreement suggests that providers who raise concerns might experience financial losses, penalties or restrictive amendments to their agreements.

Legal and financial costs are also a concern. While advocacy groups and independent provider alliances might offer support, pursuing legal action or navigating regulatory complaints is time-consuming and expensive. Independent provider groups, which operate on tighter margins than larger healthcare entities, lack the resources to sustain a prolonged complaint process.

A primary risk to MRI’s well documented concerns lies in regulatory inertia. When complaints are filed and regulations are under consideration, large corporations have substantial lobbying power. They can work behind the scenes to stall investigations or water-down regulatory responses, which delay or weaken potential reform. While there is no direct evidence, it appears that lobbying power may be in operation based on the regulatory focus and omission patterns in Oregon’s current proposed bills related to health care.

For More Information:
Comparisons of HB 2029, HB 3725, HB 4130, and SB 0951.

The Benefits of Taking Action

Despite the risks, MRI’s complaint presents significant opportunities for change. Following several failed attempts to discuss their faulty contract terms with Moda’s representatives, MRI’s formal complaint has the intent to support Oregon regulations that prevent deceptive contracts and ensure transparency in provider agreements. If successful, this effort would restore fair market competition and protect independent providers from unfair financial risk.

For providers, MRI’s well-documented Complaint could serve as a turning point in health plans’ contract negotiations, forcing health plans to adopt more ethical and fair contracting practices. It could also create precedents for future legislation, ensuring that providers are not subjected to unfair financial burdens imposed by health plans.

The greatest impact, however, would be on patient care. When providers are forced to operate under contracts that prioritize corporate profit over clinical outcomes, patients access to care suffers. By challenging Moda Health’s unfair practices, providers are both protecting their financial interests and advocating for the integrity and quality of behavioral and mental health services in Oregon.

Additionally, increased public awareness and legislative oversight could pave the way for whistleblower protections, ensuring that providers who speak out against fraudulent contracts and market manipulation are shielded from retaliation.

A Call to Action for Oregon’s Mental Health Providers

Filing a Complaint against Moda Health was and is about exposing unethical business practices, and about demanding accountability and protecting the future of independent mental health services. The Independent Mental Health Practices Alliance (IMHPA) and Mentor Research Institute (MRI) have documented extensive evidence of Moda Health’s misconduct, making a compelling case for regulatory intervention.

Now is the time for mental health providers to unite. Standing together and filing complaints with OHA, DCBS, and the OAG, providers can pressure the State to act against Moda Health’s unfair practices. Legislators need to be made aware that Moda’s contracting model both threatens independent providers and jeopardizes access to essential mental and behavioral health services for thousands of Oregonians.

The risks of inaction are much greater than the risks of speaking out. If left unchallenged, Moda Health’s predatory contract will set a dangerous precedent, allowing other health plans to adopt similar exploitative practices. Filing a complaint was the first step toward ensuring a fair, transparent, and accountable healthcare system—one that prioritizes patient care over corporate greed.

DISCLAIMER and PURPOSE: This discussion document is intended for training, education, legislation, and or research purposes. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.

For more information see:
https://www.mentorresearch.org/disclaimer-and-purpose
https://www.mentorresearch.org/challenging-moda-healths-unfair-practices-why-filing-a-complaint-matters

For more information see:
https://www.mentorresearch.org/disclaimer-and-purpose