Healthy Contracts Legislation Proposal

OREGON REVISED STATUTES

Chapter [XXX] — Health Plan Contracting Reform Act for Behavioral and Mental Health Services

Declaring this Act an Emergency is Justified to:

1. Protect patient access to essential mental and behavioral health services.

2. Prevent financial harm to care providers, purchasers and prevent misuse of taxpayer and employer funds.

3. Ensure ethical oversight and accountability.

4. Avoid legal and ethical risks to providers, stakeholders and patients.

5. Ensure that Medicaid funding for Oregon Health Plan (OHP) mental and behavioral health services are not terminated.

Section 1. Short Title

This Act may be cited as the "Healthy Contracts and Ethical Oversight Act."

Section 2. Purpose

The purpose of this Act is to ensure that all health plans operating in the state of Oregon provide contracts and policies written in plain, understandable language, ensure good faith and fair dealing, ensure transparency, and establish an independent ethics point portal overseen by a certified independent auditor who reports to the health plan’s board of directors, not health plan management.

Section 3. Definitions

For purposes of this Act:

1. "Health Plan" means any insurer, health maintenance organization, managed care organization, or third-party administrator offering health insurance coverage within Oregon.

2. "Health Care Provider" means any individual or entity providing health services, including but not limited to behavioral and mental health services, licensed to practice under the laws of the state of Oregon.

3. "Plain Language" means language that is clear, concise, well-organized, and follows best practices appropriate to the subject and audience, as defined by the Plain Writing Act of 2010 (P.L. 111-274).

4. "Good Faith and Fair Dealing" means honesty in fact and observance of reasonable commercial standards of fair dealing.

5. "Independent Certified Internal Auditor" means an individual certified by the Institute of Internal Auditors (IIA) or an equivalent body, who does not report to and is not controlled by the health plan’s management.

6. "Ethics Point Portal" means an online platform for confidential reporting of unethical practices, fraud, or contractual violations.

7. "Standardized Definitions" means all key terms defined under this Act and further clarified by the Oregon Health Authority (references at Healthy Contracts Bill Definitions).

Section 4. Plain Language Requirements

Key plain writing act principles integrated into this act:

1. Clarity: Sentences should be short and straightforward, avoiding complex structure and unnecessary words.

2. Organization: Information should be logically structured, with headings and subheadings to guide the reader.

3. Active Voice: The documents should primarily use active voice rather than passive voice to convey accountability.

4. Reader-Focused: Documents should be written with the target audience in mind, ensuring that providers and consumers can make informed decisions without confusion.

5. Contract: Health plans shall ensure that all contracts, policies, benefit explanations, and provider agreements are written in plain language (references at Plain Language).

6. Definitions: All definitions of key terms, including performance metrics, risk-sharing, and reimbursement methodologies, shall be explicitly defined and disclosed prior to contract execution.

7. Interpretation: Any ambiguity in the contract shall be interpreted in favor of the provider or consumer.

Section 5. Good Faith and Fair Dealing Requirement

1. Health plans shall engage in fair and transparent negotiations with providers and consumers, (references at Good Faith and Fair Dealing).

2. Health plans shall not,(references at Signs of Bad Faith):

   • Modify contract terms retroactively.

   • Penalize providers based on undisclosed or vague performance metrics.

   • Engage in bait-and-switch practices during contract negotiations and the life cycle of the contract.

Section 6. Transparency and Disclosure Requirements

1. Health plans shall disclose (references at Controls and the Importance of Controls):

   • All methodologies used for calculating provider incentives, penalties, and risk adjustments.

   • All upside and downside financial risks associated with value-based contracts.

   • Any proprietary algorithms or metrics that affect provider compensation or patient care.

2. Health plans shall provide providers with real-time access to their performance data and explanations of any discrepancies.

Section 7. Ethics Point Portal

1. All health plans shall implement an Ethics Point Portal for confidential reporting of unethical practices, fraud, and contract violations (referenced at Ethics Point Portal).

2. Reports submitted through the portal shall be reviewed by an independent certified internal auditor (references in Internal Auditor).

3. The portal shall:

   • Ensure whistleblower protections.

   • Provide anonymous reporting options.

   • Guarantee timely investigation and resolution of complaints.

Section 8. Independent Oversight

1. Health plans shall engage an independent certified internal auditor (CIS) to create and oversee compliance with this Act, (references in CIA).

2. The auditor shall:

   • Conduct quarterly audits of health plan contracting practices in accordance with a published plan.

   • Monitor adherence to plain language requirements, transparency standards, and fair dealing practices.

   • Report findings directly to the board of directors, not health plan management (referenced at Reporting and Inspector General Guidance).

3. Health plan management shall not interfere with the auditor’s investigations or reporting.

Section 9. Enforcement and Penalties

1. Any health plan found to be in violation of this Act shall be subject to:

   • Civil penalties not exceeding $25,000 per violation.

   • Suspension or revocation of the health plan's license to operate in the state, if violations are willful or repeated.

2. Providers, purchasers, consumers and other stakeholders may seek injunctive relief and damages for violations of this Act.

Section 10. Whistleblower Protections

1. Any individual who reports unethical practices or violations under this Act shall be protected from retaliation by the health plan (referenced in Whistleblower Protections).

2. Any health plan found to retaliate against a whistleblower shall be subject to additional civil penalties not exceeding $50,000 per violation.

Section 11. Rulemaking Authority

The Oregon Health Authority shall adopt rules necessary for the implementation and enforcement of this Act, including standards for plain language, audit procedures, reporting, and ethics point portal requirements.

Section 12. Effective Date

This Act shall take effect on January 1, 2026.