Chapter 415 — Regulation of Health Care Entities

 

2023 EDITION

 

 

REGULATION OF HEALTH CARE ENTITIES

 

HUMAN SERVICES; JUVENILE CODE; CORRECTIONS

 

FINANCIAL REGULATION OF COORDINATED CARE ORGANIZATIONS

 

(Reinsurance Program)

 

415.001     Reinsurance program for coordinated care organizations (CCOs)

 

(Regulation of Financial Solvency)

 

415.011     Oregon Health Authority regulation of financial solvency of CCOs to align with regulation of domestic insurers; rules

 

415.012     Definitions for ORS 415.012 to 415.430

 

415.013     Powers and authority to enforce ORS 415.012 to 415.430 and 415.501

 

415.015     Prohibited conflicts of interest of officer or employee of Oregon Health Authority with responsibility for enforcement

 

415.019     Right to contested case hearing

 

(Confidential Reports)

 

415.055     Confidentiality of complaints; exceptions; publication of annual statistical report of complaints against all CCOs

 

415.056     Confidentiality of reports regarding certain financial information

 

415.057     Authorized use of confidential reports regarding financial information

 

(Compliance Audit Documents)

 

415.061     Definitions for 415.061 to 415.067

 

415.062     Compliance self-evaluative audit document privileged; auditor not subject to examination in administrative or judicial proceeding

 

415.063     Permissible use of compliance self-evaluative audit document by Oregon Health Authority; consideration of document in determining civil penalty

 

415.064     Waiver of privilege; permitted disclosures

 

415.065     Petition for in camera hearing on privilege of compliance self-evaluative audit document; hearing on petition; compelled disclosure

 

415.066     Exceptions to privilege of compliance self-evaluative audit document

 

415.067     Other applicable privileges not waived by release of compliance self-evaluative audit document

 

(Investigations and Examinations)

 

415.101     Requests for information

 

415.103     False or misleading filings prohibited

 

415.105     Investigations authorized

 

415.107     Examinations and audits

 

415.109     Conduct of examination; access to records; civil penalty

 

415.111     Report of examination; opportunity to respond

 

415.115     Annual audits; rules

 

415.119     Immunity from suit arising out of investigation, examination or provision or dissemination of information; attorney fees to prevailing party authorized

 

(Supervision of

Coordinated Care Organization)

 

415.203     Opportunity to cure impairment of required capitalization

 

415.204     Grounds for order of supervision; right to hearing to contest order

 

415.205     Period of supervision; cause of action for violation of order of supervision

 

(Delinquency Proceedings)

 

415.251     Jurisdiction of delinquency proceedings

 

415.252     Exclusive remedy

 

415.253     Oregon Receivership Code inapplicable

 

415.261     Petition for delinquency proceeding

 

415.263     Cooperation with Oregon Health Authority in delinquency investigation or proceeding

 

415.265     Injunction prohibiting waste or disposition of property upon petition for delinquency proceeding

 

415.280     Petition for order for rehabilitation or liquidation of CCO

 

415.281     Court order for rehabilitation or liquidation proceeding against CCO

 

415.284     Appointment of special deputy directors to assist in supervision of CCO or delinquency proceedings

 

415.300     Rehabilitation proceeding

 

415.330     Grounds for order to liquidate

 

415.333     Powers of Oregon Health Authority in liquidation proceeding

 

415.335     Order to liquidate

 

415.340     Oregon Health Authority to be appointed receiver in delinquency proceeding; powers and duties

 

415.341     Immunity from civil liability for receivers

 

415.350     Right to assets of CCO fixed as of date of order to liquidate

 

(Claims Against Insolvent

Coordinated Care Organization)

 

415.400     Filing proof of claim against CCO declared by court to be insolvent

 

415.401     Requirements for proof of claim

 

415.402     Preference of claims

 

415.403     Priority of preferred claims

 

415.404     Contingent claims

 

415.405     Priority of special deposit claims

 

415.406     Priority of secured claims

 

415.420     Attachment or garnishment prohibited during delinquency proceeding

 

415.422     Voidable transfers or liens

 

415.424     Offsets of mutual debts or credits

 

415.430     Liability of member of CCO to pay provider for cost of care

 

REGULATION OF MATERIAL CHANGE TRANSACTIONS INVOLVING HEALTH CARE ENTITIES

 

415.500     Definitions

 

415.501     Procedures for review of material change transactions; rules

 

415.505     Conflicts of interest prohibited

 

415.510     Quadrennial study of impact of health care consolidation

 

415.512     Fees; rules

 

415.900     Civil penalties

 

FINANCIAL REGULATION OF COORDINATED CARE ORGANIZATIONS

 

(Reinsurance Program)

 

      415.001 Reinsurance program for coordinated care organizations (CCOs). (1) As used in this section:

      (a) “Attachment point” means the threshold dollar amount, adopted by the Oregon Health Authority by rule, for costs incurred by a coordinated care organization in a calendar year for a member, after which threshold the costs are eligible for state reinsurance payments.

      (b) “Coinsurance rate” means the rate, adopted by the authority by rule, at which the authority will reimburse a coordinated care organization for costs incurred by the coordinated care organization in a calendar year after the attachment point and before the reinsurance cap.

      (c) “Reinsurance” has the meaning given that term in ORS 731.126.

      (d) “Reinsurance cap” means the maximum dollar amount, adopted by the authority by rule, for costs incurred by a coordinated care organization in a calendar year, after which maximum the costs are no longer eligible for state reinsurance payments.

      (e) “Reinsurance payment” means a payment by the reinsurance program described in subsection (2) of this section to cover part of a coordinated care organization’s costs.

      (2) The Oregon Health Authority may establish a reinsurance program to:

      (a) Make payments to coordinated care organizations that face particularly high costs in caring for members who require new, exceptionally costly drugs or treatments; and

      (b) Better manage costs systemically.

      (3) The following requirements apply to a reinsurance program established under subsection (2) of this section:

      (a) A coordinated care organization becomes eligible for a reinsurance payment when the coordinated care organization’s costs in a calendar year exceed the attachment point. The amount of the payment shall be the product of the coinsurance rate and the coordinated care organization’s costs that exceed the attachment point, up to the reinsurance cap.

      (b) After the authority adopts by rule the attachment point, reinsurance cap or coinsurance rate for a calendar year, the authority may not:

      (A) Change the attachment point or the reinsurance cap during the calendar year; or

      (B) Increase the coinsurance rate during the calendar year.

      (c) The authority may adopt rules necessary to carry out the provisions of this section including, but not limited to, rules prescribing:

      (A) The amount, manner and frequency of reinsurance payments;

      (B) Assessments, if any, necessary to provide funding for the program; and

      (C) Financial reporting requirements for coordinated care organizations necessary to administer the program.

      (d) The authority shall take into account reinsurance payments received by a coordinated care organization in the determination of a global budget for the coordinated care organization.

      (4) The authority shall work with the Centers for Medicare and Medicaid Services in establishing a reinsurance program under subsection (2) of this section to ensure compliance with federal requirements and federal financial participation in the costs of the program. [2019 c.529 §2]

 

      415.010 [Amended by 1957 c.388 §1; repealed by 1985 c.511 §1]

(Regulation of Financial Solvency)

 

      415.011 Oregon Health Authority regulation of financial solvency of CCOs to align with regulation of domestic insurers; rules. (1) The Oregon Health Authority may adopt rules to carry out the provisions of ORS 415.012 to 415.430.

      (2) The authority shall adopt rules for regulating the financial solvency of coordinated care organizations that align with the following provisions of the Insurance Code regulating domestic insurers, to the extent the provisions regarding insurers are applicable to coordinated care organizations and are in accordance with ORS chapters 413 and 414:

      (a) ORS 731.385;

      (b) ORS 731.504;

      (c) ORS 731.508;

      (d) ORS 731.509;

      (e) ORS 731.574 (1) to (5);

      (f) ORS 731.730;

      (g) ORS 731.988;

      (h) ORS 732.235;

      (i) ORS 732.517 to 732.546, other than ORS 732.527, 732.531 and 732.541;

      (j) ORS 732.548;

      (k) ORS 732.549;

      (L) ORS 732.551;

      (m) ORS 732.552;

      (n) ORS 732.553;

      (o) ORS 732.554;

      (p) ORS 732.556;

      (q) ORS 732.558;

      (r) ORS 732.564;

      (s) ORS 732.566;

      (t) ORS 732.567;

      (u) ORS 732.568;

      (v) ORS 732.569;

      (w) ORS 732.574;

      (x) ORS 732.576;

      (y) ORS 732.578;

      (z) ORS 732.592;

      (aa) ORS 733.010 to 733.050;

      (bb) ORS 733.140 to 733.170;

      (cc) ORS 733.510 to 733.680;

      (dd) ORS 733.695 to 733.780; and

      (ee) ORS 734.014.

      (3) Rules adopted by the authority in accordance with ORS 731.385 that establish minimum standards for risk-based capital may not require a coordinated care organization to take preventive or corrective measures to increase the coordinated care organization’s capital, surplus or reserves to achieve more than 200 percent of the minimum risk-based capital. [2019 c.478 §53]

 

      415.012 Definitions for ORS 415.012 to 415.430. As used in ORS 415.012 to 415.430:

      (1) “Coordinated care organization” has the meaning given that term in ORS 414.025.

      (2) “Medical assistance program” means the Oregon Integrated and Coordinated Health Care Delivery System established in ORS 414.570. [2019 c.478 §1]

 

      415.013 Powers and authority to enforce ORS 415.012 to 415.430 and 415.501. (1) The Oregon Health Authority shall enforce the provisions of ORS 415.012 to 415.430 and 415.501 and rules adopted pursuant to ORS 415.011, 415.012 to 415.430 and 415.501 for the public good.

      (2) The authority has the powers and authority expressly conferred by or reasonably implied from the provisions of ORS 415.012 to 415.430 and 415.501 and rules adopted pursuant to ORS 415.011, 415.012 to 415.430 and 415.501.

      (3) The authority may conduct examinations and investigations and require the production of books, records, accounts, papers, documents and computer and other recordings the authority considers necessary to administer and enforce ORS 415.012 to 415.430 or 415.501 and any rules adopted pursuant to ORS 415.011, 415.012 to 415.430 or 415.501. [2019 c.478 §3; 2021 c.615 §11]

 

      415.015 Prohibited conflicts of interest of officer or employee of Oregon Health Authority with responsibility for enforcement. (1) An officer or employee of the Oregon Health Authority who is delegated responsibilities in the enforcement of ORS 415.012 to 415.430 or rules adopted pursuant to ORS 415.011 may not:

      (a) Be a director, officer or employee of or be financially interested in any coordinated care organization, except as a member of a coordinated care organization or by reason of rights vested in compensation or benefits related to services performed prior to affiliation with the authority; or

      (b) Be engaged in any other business or occupation interfering with or inconsistent with the duties of the authority.

      (2) This section does not permit any conduct, affiliation or interest that is otherwise prohibited by public policy. [2019 c.478 §2]

 

      415.019 Right to contested case hearing. (1) The Oregon Health Authority shall hold a contested case hearing upon written request for a hearing by a person aggrieved by any act, threatened act or failure of the authority to act under ORS 415.012 to 415.430 or 415.501 or rules adopted pursuant to ORS 415.011, 415.012 to 415.430 or 415.501.

      (2) The provisions of ORS chapter 183 govern the hearing procedures and any judicial review of a final order issued in a contested case hearing. [2019 c.478 §4; 2021 c.615 §12]

 

      415.020 [Repealed by 1957 c.388 §17]

      415.030 [Amended by 1983 c.179 §1; repealed by 1985 c.511 §1]

      415.040 [Amended by 1983 c.179 §2; repealed by 1985 c.511 §1]

      415.050 [Repealed by 1983 c.179 §3]

(Confidential Reports)

 

      415.055 Confidentiality of complaints; exceptions; publication of annual statistical report of complaints against all CCOs. (1) A complaint made to the Oregon Health Authority against a coordinated care organization for a violation of ORS 415.012 to 415.430 or rules adopted pursuant to ORS 415.011, and the record of the complaint, is confidential and may not be disclosed except as provided in ORS 413.175 or 414.607. The complaint, and the record of the complaint, may not be used in any action, suit or proceeding except to the extent the authority considers necessary in prosecuting apparent violations of ORS 415.012 to 415.430, rules adopted pursuant to ORS 415.011 or other law.

      (2) Data gathered pursuant to an investigation by the authority of a complaint is confidential, may not be disclosed except as provided in ORS 413.175 and 414.607 and may not be used in any action, suit or proceeding except to the extent the authority considers necessary in investigating or prosecuting apparent violations of ORS 415.012 to 415.430, rules adopted pursuant to ORS 415.011 or other law.

      (3) Notwithstanding subsections (1) and (2) of this section, the authority shall establish by rule a method for publishing an annual statistical report containing the coordinated care organization’s name and the number, percentage, type and disposition of complaints the authority receives against each coordinated care organization that contracts with the authority. [2019 c.478 §12]

 

      415.056 Confidentiality of reports regarding certain financial information. (1) The Oregon Health Authority may disclose or use a report as considered necessary by the authority in the administration of ORS 415.012 to 415.430, rules adopted pursuant to ORS 415.011 or other law.

      (2) A report filed with the authority according to requirements established by rule for disclosure of material acquisitions or dispositions of assets is confidential.

      (3) A report filed with the Oregon Health Authority according to requirements established by rule for the purpose of determining the amount of restricted reserves, capital or surplus that a coordinated care organization must maintain under ORS 414.572 (1)(b)(A) is confidential and may not be disclosed.

      (4) A financial plan of action stating corrective actions to be taken by a coordinated care organization in response to a determination of inadequate restricted reserves, capital or surplus that is filed by the coordinated care organization with the authority according to requirements established by rule is confidential and may not be disclosed.

      (5) The results or report of any examination or analysis of a coordinated care organization performed by the authority in connection with a financial plan described in subsection (4) of this section and any corrective order issued by the authority pursuant to such an examination or analysis is confidential and may not be disclosed.

      (6) Information contained in documents described in subsections (1) to (4) of this section that is also contained in final examination reports filed under ORS 415.111 is not confidential under this section.

      (7) All financial analysis ratios and examination synopses concerning coordinated care organizations that are submitted to the authority by the Insurance Regulatory Information System of the National Association of Insurance Commissioners are confidential. [2019 c.478 §14]

 

      415.057 Authorized use of confidential reports regarding financial information. (1) The Oregon Health Authority may use reports and financial plans of action that are made confidential under ORS 415.056 only for the purpose of monitoring the solvency of coordinated care organizations and the need for possible corrective action with respect to coordinated care organizations.

      (2) The authority may not use reports and financial plans of action referred to in subsection (1) of this section for establishing global budgets or in any proceeding related to global budgets.

      (3) This section does not prohibit authority from using information included in reports or financial plans referred to in subsection (1) of this section that is available from other sources. [2019 c.478 §15]

 

      415.060 [Amended by 1957 c.388 §2; 1969 c.597 §59; repealed by 1985 c.511 §1]

(Compliance Audit Documents)

 

      415.061 Definitions for 415.061 to 415.067. As used in ORS 415.061 to 415.067:

      (1) “Compliance audit” means a voluntary internal evaluation, review, assessment, audit or investigation that is undertaken to identify or prevent noncompliance with, or promote compliance with, laws, regulations, orders or professional standards, and that is conducted by or on behalf of a coordinated care organization.

      (2)(a) “Compliance self-evaluative audit document” means a document prepared as a result of or in connection with a compliance audit.

      (b) “Compliance self-evaluative audit document” includes, but is not limited to:

      (A) A written response to the findings of a compliance audit.

      (B) Field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, exhibits, computer-generated or electronically recorded information, phone records, maps, charts, graphs and surveys, provided this supporting information is collected or developed solely for the purpose of a compliance audit.

      (C) A compliance audit report prepared by an auditor, who may be an employee of the coordinated care organization or an independent contractor, which may include the scope of the audit, the information gained in the audit and conclusions and recommendations, with exhibits and appendices.

      (D) Memoranda and documents analyzing portions or all of the compliance audit report and discussing potential implementation issues.

      (E) An implementation plan that addresses correcting past noncompliance, improving current compliance and preventing future noncompliance.

      (F) Analytic data generated in the course of conducting the compliance audit, not including any analytic data that exists independently of the audit or existed before the audit was conducted. [2019 c.478 §16]

 

      415.062 Compliance self-evaluative audit document privileged; auditor not subject to examination in administrative or judicial proceeding. Except as provided in ORS 415.061 to 415.067:

      (1) A compliance self-evaluative audit document is privileged information and is not discoverable or admissible as evidence in any civil, criminal or administrative proceeding.

      (2) Any person who performs or directs the performance of an compliance audit, any officer, employee or agent of a coordinated care organization who is involved with a compliance audit and any consultant who is hired for the purpose of performing a compliance audit may not be examined in any civil, criminal or administrative proceeding about the compliance audit or any compliance self-evaluative audit document. [2019 c.478 §17]

 

      415.063 Permissible use of compliance self-evaluative audit document by Oregon Health Authority; consideration of document in determining of civil penalty. (1) ORS 415.062 does not prohibit the Oregon Health Authority from acquiring any compliance self-evaluative audit document or examining any person in connection with the document. If the authority determines that the actions of a coordinated care organization are egregious, the authority may introduce and use the document in any administrative proceeding or civil action under ORS 415.012 to 415.430 or rules adopted pursuant to ORS 415.011.

      (2) Any compliance self-evaluative audit document submitted to the authority under this section and in the possession of the authority remains the property of the coordinated care organization and is not subject to disclosure or production under ORS 192.311 to 192.478.

      (3)(a) The authority shall consider the corrective action taken by a coordinated care organization to eliminate problems identified in the compliance self-evaluative audit document as a mitigating factor when determining a civil penalty or other action against the coordinated care organization.

      (b) The authority may, in the authority’s sole discretion, decline to impose a civil penalty or take other action against a coordinated care organization based on information obtained from a compliance self-evaluative audit document if the coordinated care organization has taken reasonable corrective action to eliminate the problems identified in the document.

      (4) Disclosure of a compliance self-evaluative audit document to a governmental agency, whether voluntarily or pursuant to compulsion of law, does not constitute a waiver of the privilege set forth in ORS 415.062 for any other purpose.

      (5) The authority may not be compelled to produce a compliance self-evaluative audit document. [2019 c.478 §18]

 

      415.064 Waiver of privilege; permitted disclosures. (1) The privilege set forth in ORS 415.062 does not apply to the extent that the privilege is expressly waived by the coordinated care organization that prepared or caused to be prepared the compliance self-evaluative audit document.

      (2) The privilege set forth in ORS 415.062 does not apply in any civil, criminal or administrative proceeding commenced by the Attorney General relating to Medicaid fraud, without regard to whether the proceeding is brought on behalf of the state, a state agency or a federal agency. A coordinated care organization may request an in camera review of any document or other evidence to be released or used under this subsection and may request that appropriate protective orders be entered governing release and use of the material.

      (3) In any civil proceeding a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in ORS 415.062 is asserted if the court determines that the material is not subject to the privilege, or that the privilege is asserted for a fraudulent purpose, including but not limited to an assertion of the privilege for a compliance audit that was conducted for the purpose of concealing a violation of any federal, state or local law or rule. This subsection may not be construed to prohibit the Oregon Health Authority from acquiring, examining and using compliance self-evaluative audit documents under ORS 415.062.

      (4) In a criminal proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in ORS 415.062 is asserted if the court determines that:

      (a) The privilege is asserted for a fraudulent purpose, including but not limited to an assertion of the privilege for a compliance audit that was conducted for the purpose of concealing a violation of any federal, state or local law or rule;

      (b) The material is not subject to the privilege; or

      (c) The material contains evidence relevant to commission of a criminal offense, and:

      (A) A district attorney or the Attorney General has a compelling need for the information;

      (B) The information is not otherwise available; or

      (C) The district attorney or Attorney General is unable to obtain the substantial equivalent of the information by any other means without incurring unreasonable cost and delay. [2019 c.478 §19]

 

      415.065 Petition for in camera hearing on privilege of compliance self-evaluative audit document; hearing on petition; compelled disclosure. (1) Within 30 days after a district attorney or the Attorney General serves on a coordinated care organization a written request by certified mail for disclosure of a compliance self-evaluative audit document, the coordinated care organization that prepared or caused the document to be prepared may file in circuit court a petition requesting an in camera hearing on whether the compliance self-evaluative audit document or portions of the document are privileged under ORS 415.062 or subject to disclosure. Failure by the coordinated care organization to file a petition waives the privilege only with respect to the specific request.

      (2) A petition filed by a coordinated care organization under this section must contain the following information:

      (a) The date of the compliance self-evaluative audit document.

      (b) The identity of the person that conducted the audit.

      (c) The general nature of the activities covered by the compliance audit.

      (d) An identification of the portions of the compliance self-evaluative audit document for which the privilege is being asserted.

      (3) Within 45 days after the filing of a petition by a coordinated care organization under this section, the court shall schedule an in camera hearing to determine whether the compliance self-evaluative audit document or portions of the document are privileged under ORS 415.062.

      (4) The court, after an in camera review pursuant to this section, may require disclosure of material for which the privilege established by ORS 415.062 is asserted if the court determines that any of the conditions set forth in ORS 415.064 or 415.066 are met. Upon making such a determination, the court may compel the disclosure of only those portions of a compliance self-evaluative audit document relevant to issues in dispute in the underlying proceeding. Any disclosure that is compelled by the court will not be considered to be a public document or be deemed to be a waiver of the privilege for any other civil, criminal or administrative proceeding. A party unsuccessfully opposing disclosure may apply to the court for an appropriate order protecting the document from further disclosure.

      (5) A coordinated care organization asserting the privilege established under ORS 415.062 has the burden of establishing that the privilege applies. If the coordinated care organization establishes that the privilege applies, a party seeking disclosure under ORS 415.064 has the burden of proving the elements set forth in ORS 415.064. [2019 c.478 §20]

 

      415.066 Exceptions to privilege of compliance self-evaluative audit document. The privilege established under ORS 415.062 does not apply to any of the following:

      (1) Documents, communications, data, reports or other information expressly required to be collected, developed, maintained or reported to the Oregon Health Authority or other regulatory agency under ORS 415.012 to 415.430, rules adopted pursuant to ORS 415.011 or other state or federal law;

      (2) Information obtained by observation or monitoring by the authority or any regulatory agency; or

      (3) Information obtained from a source other than the compliance audit. [2019 c.478 §21]

 

      415.067 Other applicable privileges not waived by release of compliance self-evaluative audit document. Nothing in ORS 415.061 to 415.067, or in the release of any compliance self-evaluative audit document under ORS 415.061 to 415.067, shall limit, waive or abrogate the scope or nature of any statutory or common law privilege or other limitation on admissibility of evidence including, but not limited to, the work product doctrine, the lawyer-client privilege under ORS 40.225 or the subsequent remedial measures exclusion provided by ORS 40.185. [2019 c.478 §22]

 

      415.070 [Repealed by 1957 c.388 §3 (415.090 enacted in lieu of 415.070)]

      415.080 [Repealed by 1957 c.388 §17]

      415.090 [1957 c.388 §4 (enacted in lieu of 415.070); repealed by 1985 c.511 §1]

 

(Investigations and Examinations)

 

      415.101 Requests for information. The Oregon Health Authority may request information from any coordinated care organization or its officers in relation to the activities or condition of the coordinated care organization or any other matter connected with a coordinated care organization’s transactions, and the person of whom the information is requested shall promptly and truthfully reply using the form of communication requested by the authority and verified by an officer of the coordinated care organization, if the authority so requires. A response is subject to the provisions of ORS 415.103. [2019 c.478 §6]

 

      415.103 False or misleading filings prohibited. A person may not file or cause to be filed with the Oregon Health Authority any article, certificate, report, statement, application or other information required or permitted to be filed under ORS 415.012 to 415.430 or 415.501 or rules adopted pursuant to ORS 415.011, 415.012 to 415.430 or 415.501 that is known by the person to be false or misleading in any material respect. [2019 c.478 §5; 2021 c.615 §13]

 

      415.105 Investigations authorized. The Oregon Health Authority, whenever the authority deems it advisable in the interest of members of a coordinated care organization or for the public good, shall investigate into the affairs of:

      (1) A coordinated care organization;

      (2) A person proposing to form a coordinated care organization; or

      (3) A person holding the capital stock, membership or other ownership or controlling interest in one or more coordinated care organizations for the purpose of controlling the management of the coordinated care organization as a voting trustee or otherwise. [2019 c.478 §8]

 

      415.107 Examinations and audits. The Oregon Health Authority shall examine every coordinated care organization, including an audit of the financial affairs of the coordinated care organization, as often as the authority determines an examination to be necessary but at least once every five years. An examination shall be conducted for the purpose of determining the financial condition of the coordinated care organization, its ability to fulfill its obligations and its manner of fulfillment, the nature of its operations and its compliance with ORS 415.012 to 415.430 or rules adopted pursuant to ORS 415.011. The authority may also examine any person holding the capital stock, membership or other ownership or controlling interest in a coordinated care organization for the purpose of controlling the management of the coordinated care organization as a voting trustee or otherwise. [2019 c.478 §7]

 

      415.109 Conduct of examination; access to records; civil penalty. (1) When the Oregon Health Authority determines that an examination should be conducted, the authority shall appoint one or more examiners to perform the examination and instruct them as to the scope of the examination. The authority may prescribe the examiner handbook and employ other guidelines and procedures that the authority determines to be appropriate.

      (2) The authority may retain appraisers, independent actuaries, independent certified public accountants or other professionals and specialists in conducting an examination, as needed. The coordinated care organization that is the subject of the examination is responsible for the cost of retaining the professionals and specialists.

      (3) Upon an examination or investigation of a coordinated care organization, the Oregon Health Authority may examine under oath all persons who may have material information regarding the property or business of the coordinated care organization being examined or investigated.

      (4) Every person being examined or investigated shall produce all books, records, accounts, papers, documents and computer and other recordings in its possession or control relating to the matter under examination or investigation, including, in the case of an examination, the property, assets, business and affairs of the person.

      (5) With regard to an examination, the officers, directors and agents of the coordinated care organization being examined shall provide timely, convenient and free access at all reasonable hours at the offices of the coordinated care organization being examined to all books, records, accounts, papers, documents and computer and other recordings. The officers, directors, employees and agents of the person must facilitate the examination.

      (6) In an investigation or examination of a coordinated care organization’s financial condition, the authority may order a coordinated care organization to produce information the coordinated care organization does not possess but to which the coordinated care organization might have access by reason of a contractual relationship or a statutory obligation or by other means. If the coordinated care organization cannot obtain the information the authority requires, the coordinated care organization shall provide the authority with a detailed explanation of the reason the coordinated care organization cannot obtain the information and shall identify the person that possesses the information. If the authority finds that the coordinated care organization’s explanation is without merit, the authority may impose a civil penalty on the coordinated care organization as provided in rules adopted pursuant to ORS 415.011 (2)(g) or may suspend or revoke the coordinated care organization’s contract. [2019 c.478 §9]

 

      415.110 [Amended by 1957 c.388 §16; repealed by 1985 c.511 §1]

 

      415.111 Report of examination; opportunity to respond. (1) Not later than the 60th day after an examination is completed, the examiner in charge of the examination shall submit to the Oregon Health Authority a full and true report of the examination, verified by the oath of the examiner. The report shall comprise only facts appearing upon the books, papers, records, accounts, documents or computers and other recordings of the coordinated care organization, its agents or other persons being examined or facts ascertained from testimony of individuals concerning the affairs of the coordinated care organization, together with such conclusions and recommendations as reasonably may be warranted from the facts.

      (2) The authority shall make a copy of the report submitted under subsection (1) of this section available to the coordinated care organization that is the subject of the examination and shall give the coordinated care organization an opportunity to review and comment on the report. The authority may request additional information or meet with the coordinated care organization for the purpose of resolving questions or obtaining additional information and may direct the examiner to consider the additional information for inclusion in the report.

      (3) Before the authority files the examination report as a final examination report or makes the report or any matters relating to it public, the coordinated care organization being examined shall have an opportunity for a hearing. A copy of the report must be mailed by certified mail to the coordinated care organization being examined. The coordinated care organization may request a hearing not later than the 30th day after the date on which the report was mailed. This subsection does not prohibit the authority from disclosing a final examination report as provided in subsection (5) of this section.

      (4) The authority shall consider comments presented at a hearing requested under subsection (3) of this section and may direct the examiner to consider the comments or direct that the comments be included in documentation relating to the report, although not as part of the report itself. The authority may file the report as a final examination report at any time after consideration of the comments or at any time after the period for requesting a hearing has passed if a hearing is not requested.

      (5) A report filed as a final examination report is subject to public inspection. The authority, after filing any report, if the authority considers it to be in the public interest, may publish any report or the result of any examination contained in the report without expense to the person examined. [2019 c.478 §10]

 

      415.115 Annual audits; rules. (1) A coordinated care organization shall have an annual audit conducted by an independent certified public accountant and shall file an audited financial report annually with the Oregon Health Authority by June 30 following the end of the period to which the report applies. The annual audited financial report shall disclose:

      (a) The financial position of the coordinated care organization as of the end of the most recent calendar year; and

      (b) The results of the coordinated care organization’s operations, cash flows and changes in capital, surplus and reserves for the year just ended.

      (2) The authority shall adopt the following rules as needed for carrying out the requirements of this section prescribing the:

      (a) Required contents and format of the audited financial report.

      (b) Requirements for filing the report.

      (c) Requirements applicable to qualifications and designation of certified public accountants for purposes of audits under this section, which may include limitations on length of service for certified public accountants and may permit recognition of accountants comparably qualified under the laws of another country.

      (d) Requirements applicable to evaluation of the accounting procedures of a coordinated care organization and its system of internal control by a certified public accountant.

      (e) Standards governing the scope and preparation of the audit.

      (f) Requirements and procedures relating to the reporting of the adverse financial condition of a coordinated care organization by a certified public accountant.

      (g) Requirements and procedures relating to the reporting of significant deficiencies for internal controls of a coordinated care organization.

      (h) Exemptions.

      (i) Any other matter that the authority determines to be needed for preparation of or inclusion in the financial report. [2019 c.478 §11]

 

      415.119 Immunity from suit arising out of investigation, examination or provision or dissemination of information; attorney fees to prevailing party authorized. (1) Except in the case of malfeasance in office or willful or wanton neglect of duty, a cause of action does not arise and liability may not be imposed against the Oregon Health Authority, an authorized representative of the authority or any examiner appointed by the authority for:

      (a) Any statements made or conduct performed in good faith pursuant to an examination or investigation.

      (b) The authority’s collection, review, analysis or dissemination of the data and information collected from the filings required by rules adopted pursuant to ORS 415.012 to 415.430 or rules adopted pursuant to ORS 415.011.

      (2) A cause of action does not arise and liability may not be imposed against any person for communicating or delivering information or data to the authority or an authorized representative of the authority or examiner pursuant to an examination or investigation if the communication or delivery was performed in good faith and without fraudulent intent or an intent to deceive.

      (3) This section does not abrogate or modify in any way any common law or statutory privilege or immunity otherwise enjoyed by any person to which subsection (1) or (2) of this section applies.

      (4) The court may award reasonable attorney fees to the prevailing party in a cause of action arising out of activities of the authority or an examiner in carrying out an examination or investigation. [2019 c.478 §13]

 

      415.120 [Repealed by 1985 c.511 §1]

(Supervision of Coordinated Care Organization)

 

      415.203 Opportunity to cure impairment of required capitalization. (1) Whenever the Oregon Health Authority determines from any showing or statement made to the authority from any examination made by the authority that the assets of a coordinated care organization are less than its liabilities plus required capitalization, the authority may:

      (a) Proceed immediately to petition for an order of rehabilitation or liquidation or to commence a delinquency proceeding; or

      (b) Allow the coordinated care organization a period of time, not to exceed 90 days, in which to make good the amount of the impairment with cash or authorized investments.

      (2) If the amount of the impairment is not made good within the time prescribed by the authority under subsection (1) of this section, the authority shall proceed to petition for an order of rehabilitation or liquidation or to commence a delinquency proceeding.

      (3) An order directing a coordinated care organization to cure an impairment is confidential for such time as the authority considers proper but not exceeding the time prescribed by the authority for making the amount of the impairment good. If the authority determines that the public interest in disclosure outweighs the public interest in protecting or salvaging the solvency of the coordinated care organization, the authority may make the order available for public inspection. [2019 c.478 §26]

 

      415.204 Grounds for order of supervision; right to hearing to contest order. (1) For any reason stated in subsection (2) of this section, the Oregon Health Authority may order a coordinated care organization to be placed under supervision.

      (2) The authority may place a coordinated care organization under supervision if upon examination or at any other time the authority determines that:

      (a) The condition of the coordinated care organization renders the continuance of its business hazardous to the public or to its members.

      (b) The coordinated care organization has refused to permit examination of its books, papers, accounts, records or affairs by the authority or any deputy, examiner or employee representing the authority.

      (c) A coordinated care organization has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the coordinated care organization.

      (d) The coordinated care organization has failed to comply promptly with the applicable financial reporting statutes or rules and any request of the authority relating to financial reporting.

      (e) The coordinated care organization has failed to observe an order of the authority to make good, within the time prescribed by law, any prohibited deficiency in its restricted reserves, capital, capital stock or surplus.

      (f) The coordinated care organization is continuing to conduct business after its contract has been revoked or suspended by the authority.

      (g) The coordinated care organization, by contract or otherwise, has done any of the following unlawfully, in violation of an order of the authority or without first having obtained written approval of the authority:

      (A) Totally reinsured its entire outstanding business; or

      (B) Merged or consolidated substantially its entire property or business with another entity.

      (h) The coordinated care organization has engaged in any transaction in which it is not authorized to engage under the laws of the state.

      (i) The coordinated care organization has failed to comply with any other order of the authority.

      (j) The coordinated care organization has failed to comply with any other applicable provisions of ORS 415.012 to 415.430 or rules adopted pursuant to ORS 415.011.

      (k) The business of the coordinated care organization is being conducted fraudulently.

      (L) The coordinated care organization agrees to supervision.

      (3) If the authority determines that one or more conditions set forth in subsection (2) of this section exist, the authority may do all of the following:

      (a) Notify the coordinated care organization of the determination of the authority.

      (b) Furnish to the coordinated care organization a written list of the requirements to abate the condition or conditions determined to exist.

      (c) Notify the coordinated care organization that it is under the supervision of the authority and that the authority is applying this section and ORS 415.205.

      (4) The authority may act as the supervisor to conduct the supervision and otherwise carry out an order under subsection (1) of this section or may appoint another person as supervisor.

      (5) The authority or the appointed supervisor may prohibit any person from taking any of the following actions during the period of supervision without the prior approval of the authority or supervisor:

      (a) Disposing of, conveying or encumbering any of the coordinated care organization’s assets or its business in force.

      (b) Withdrawing from any of the coordinated care organization’s bank accounts.

      (c) Lending any of the coordinated care organization’s funds.

      (d) Investing any of the coordinated care organization’s funds.

      (e) Transferring any of the coordinated care organization’s property.

      (f) Incurring any debt, obligation or liability on behalf of the coordinated care organization.

      (g) Merging or consolidating the coordinated care organization with another coordinated care organization or other person.

      (h) Entering into any new reinsurance contract or treaty.

      (i) Making any material change in management.

      (j) Increasing salaries and benefits of officers or directors.

      (k) Making or increasing preferential payment of bonuses, dividends or other payments determined by the authority to be preferential.

      (L) Any other action affecting the business or condition of the coordinated care organization.

      (6) The authority may apply to any circuit court for any restraining order, preliminary and permanent injunctions and other orders necessary to enforce a supervision order.

      (7) During the period of supervision, the coordinated care organization may file a written request for a hearing to review the supervision or any action taken or proposed to be taken. A request under this subsection does not suspend the supervision. The coordinated care organization must specify in the request the manner in which the action being complained of would not result in improving the condition of the coordinated care organization. The hearing shall be held within 30 days after the filing of the request. The authority shall complete the review of the supervision or other action and shall take action under subsection (8) of this section if appropriate within 30 days after the record for the hearing is closed.

      (8) The authority shall release a coordinated care organization from supervision if the authority determines upon hearing that none of the conditions giving rise to the supervision exist. [2019 c.478 §24]

 

      415.205 Period of supervision; cause of action for violation of order of supervision. (1) A coordinated care organization placed under supervision must correct, eliminate or remedy the acts, transactions or practices that are the basis for the order of supervision and otherwise comply with the requirements of the Oregon Health Authority within the period of time allowed by the authority, not to exceed 60 days, after the date on which the order is served on the coordinated care organization.

      (2) If the authority determines that the conditions giving rise to the supervision still exist at the end of the supervision period established in subsection (1) of this section, the authority may extend the period.

      (3) During the period of supervision of a coordinated care organization, the authority may institute rehabilitation or liquidation proceedings, extend the period of supervision or take any other action authorized by law.

      (4) The authority or supervisor on behalf of a coordinated care organization under supervision may bring an action for damages against any person who violates any order of the authority under ORS 415.204 if the violation reduces the net worth of the coordinated care organization or results in loss to the coordinated care organization that the coordinated care organization would not have suffered otherwise. The authority or supervisor may recover damages to the extent of the reduction or loss. [2019 c.478 §25]

 

(Delinquency Proceedings)

 

      Note: Definitions in 734.014 relating to delinquency proceedings may apply to 415.012 to 415.430. See 415.011 (2)(ee).

 

      415.251 Jurisdiction of delinquency proceedings. (1) The circuit court shall have original jurisdiction of delinquency proceedings, and any court with jurisdiction is authorized to make all necessary or proper orders to carry out the purposes of ORS 415.203 to 415.430.

      (2) The venue of delinquency proceedings and proceedings under ORS 415.203 to 415.430 against a coordinated care organization shall be in the Circuit Court for Marion County.

      (3) At any time after the commencement of a delinquency proceeding or a proceeding under ORS 415.203 to 415.430, the court may issue an order changing the venue of the proceeding on motion of the Oregon Health Authority or other interested person if the court finds the proceedings may be more economically and efficiently conducted thereby. [2019 c.478 §32]

 

      415.252 Exclusive remedy. (1) Delinquency proceedings constitute the sole and exclusive method of rehabilitating, liquidating or conserving a coordinated care organization, and a court may not entertain a petition for the commencement of such proceedings, or any other similar procedure, unless the Oregon Health Authority has filed such a petition in the name of the state.

      (2) A coordinated care organization shall appeal an order granting or refusing rehabilitation, liquidation or conservation and every order in delinquency proceedings that has the character of a final order to the Court of Appeals. [2019 c.478 §33]

 

      415.253 Oregon Receivership Code inapplicable. Notwithstanding ORS 37.040, the Oregon Receivership Code does not apply to delinquency proceedings under ORS 415.203 to 415.430. [2019 c.478 §48]

 

      415.261 Petition for delinquency proceeding. (1) The Oregon Health Authority shall commence a delinquency proceeding by an application to the court for an order directing the coordinated care organization to show cause why the authority should not have the relief prayed for.

      (2) The application shall be by petition, verified by the authority, setting forth the ground or grounds for the proceeding and the relief demanded.

      (3) If the court is satisfied from reading the authority’s petition that the facts alleged, if established, would constitute grounds for a delinquency proceeding, the court shall issue an order to the coordinated care organization to show cause.

      (4) On the return of the order to show cause, and after a full hearing, the court shall either deny the application or grant the application, together with such other relief as the nature of the case and the interests of the members of the coordinated care organization or the public may require.

      (5) After commencement of a delinquency proceeding by the authority, the court may make any further orders necessary in response to the application of any interested person. [2019 c.478 §34]

 

      415.263 Cooperation with Oregon Health Authority in delinquency investigation or proceeding. (1) An officer, manager, member of the governing board, trustee, owner, employee or agent of a coordinated care organization, and any other person with authority over or in charge of any portion of the coordinated care organization’s affairs, including any person who exercises control directly or indirectly over the activities of the coordinated care organization through a holding company or other affiliate of the coordinated care organization, shall cooperate with the Oregon Health Authority in any delinquency proceeding or any investigation preliminary to the proceeding. For purposes of this section, cooperation with the authority includes at least the following:

      (a) Replying promptly in writing to any inquiry from the authority requesting such a reply; and

      (b) Making available to the authority any books, accounts, documents or other records, information or property of or pertaining to the coordinated care organization and in the possession, custody or control of the coordinated care organization.

      (2) A person may not obstruct or interfere with the authority in conducting a delinquency proceeding or any investigation that is preliminary or incidental to a delinquency proceeding.

      (3) This section may not be construed to abridge existing legal rights, including the right to resist a petition for liquidation or other delinquency proceedings, or other orders. [2019 c.478 §23]

 

      415.265 Injunction prohibiting waste or disposition of property upon petition for delinquency proceeding. (1) Upon application by the Oregon Health Authority for an order to show cause under ORS 415.261, or at any time thereafter, the court may, without notice, issue an injunction restraining a coordinated care organization, its officers, members of its governing board, agents, employees and all other persons from the transaction of its business or the waste or disposition of its property until the further order of the court.

      (2) The court may at any time during a delinquency proceeding issue other injunctions or orders to prevent any of the following activities:

      (a) Transacting further business of the coordinated care organization.

      (b) Transferring property.

      (c) Interfering with the receiver or with a delinquency proceeding.

      (d) Wasting assets of a coordinated care organization.

      (e) Dissipating or transferring bank accounts.

      (f) Instituting or further prosecuting any actions or proceedings.

      (g) Obtaining preferences, judgments, attachments, garnishments or liens against the coordinated care organization or its assets.

      (h) Levying execution against the coordinated care organization or its assets.

      (i) The making of a sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the coordinated care organization.

      (j) Withholding from the receiver books, accounts, documents or other records relating to the business of the coordinated care organization.

      (k) Taking any other threatened or contemplated action that might lessen the value of the assets of the coordinated care organization or prejudice the rights of the state, creditors or other interested persons, or the administration of a delinquency proceeding.

      (3) Notwithstanding any other provision of law, the authority may not be required to post bond as a prerequisite for issuing any injunction or restraining order pursuant to this section. [2019 c.478 §35]

 

      415.280 Petition for order for rehabilitation or liquidation of CCO. (1) The Oregon Health Authority may petition the circuit court for an order:

      (a) Directing the authority to rehabilitate a coordinated care organization on one or more of the following grounds:

      (A) The coordinated care organization is impaired.

      (B) The coordinated care organization has failed to submit its books, papers, accounts or affairs for the reasonable inspection and examination by the authority.

      (C) Without first obtaining the written consent of the authority, the coordinated care organization has by contract of reinsurance, or otherwise, transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge, consolidate or reinsure substantially its entire property or business in or with the property or business of any other person, without first having complied with rules adopted pursuant to ORS 415.011 (2)(i).

      (D) The coordinated care organization is in such condition that its further transaction of business would be hazardous to its members, creditors, the state or the public.

      (E) The coordinated care organization has violated its articles of incorporation, its bylaws, any law of the state or any order of the authority.

      (F) Any person who has executive authority in the coordinated care organization, whether an officer, manager, general agent, member of the governing board or trustee, employee or other person, has refused to be examined under oath by the authority concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact, the coordinated care organization has not promptly and effectively terminated the employment and status of the person and all influence of the person on management.

      (G) The coordinated care organization or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator or sequestrator or similar fiduciary of the coordinated care organization or of its property other than as authorized under ORS 415.012 to 415.430 and rules adopted pursuant to ORS 415.011, and the appointment has been made or is imminent, and the appointment might deprive the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings.

      (H) The coordinated care organization has consented to the order by a vote of a majority of its governing board.

      (I) The coordinated care organization has failed to pay any obligation to any state or any subdivision of the state.

      (J) The coordinated care organization has failed to pay a binding final judgment rendered against it by the later of:

      (i) Sixty days after the judgment became final;

      (ii) Sixty days after the time for taking an appeal expired; or

      (iii) Sixty days after the dismissal of an appeal before final determination.

      (K) There is reasonable cause to believe that there has been embezzlement from the coordinated care organization, wrongful sequestration or diversion of the coordinated care organization’s assets, forgery or fraud affecting the coordinated care organization or other illegal conduct in, by or with respect to the coordinated care organization that if established would endanger assets in an amount threatening the solvency of the coordinated care organization.

      (L) The coordinated care organization has failed to remove a person who has executive authority in the coordinated care organization, whether an officer, manager, general agent, member of the governing board, trustee, employee or other person, if the person has been found by the authority to be dishonest or untrustworthy in a way affecting the coordinated care organization’s business.

      (M) Control of the coordinated care organization, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons who have been found by the authority to be untrustworthy.

      (N) The coordinated care organization has failed to file reports or financial data required by statute or by rule within the time allowed by law or within any additional time allowed by the authority.

      (b) Authorizing the authority to seize all or part of the property, books, accounts and other records of a coordinated care organization as well as the premises where health services are provided or administrative functions for a coordinated care organization are housed.

      (c) Enjoining the coordinated care organization from disposing of its property and transacting business except as allowed by written consent of the authority.

      (2) The authority must include all of the following in the petition under subsection (1) of this section:

      (a) An allegation that one or more grounds exist that would justify a court order for a rehabilitation or liquidation proceeding against the coordinated care organization.

      (b) An allegation that the interests of members of the coordinated care organization, creditors of the coordinated care organization or the public will be endangered by delay.

      (c) The contents of the order that the authority requests the court to issue. [2019 c.478 §27]

 

      415.281 Court order for rehabilitation or liquidation proceeding against CCO. (1) Upon petition by the Oregon Health Authority under ORS 415.280, the court may issue the requested order immediately, ex parte and without hearing. The court in its order shall specify the duration of the order. The duration of an order shall be a period sufficient to enable the authority to ascertain the condition of the coordinated care organization.

      (2) On motion of the authority or the coordinated care organization against whom an order under this section is issued, or on the court’s own motion, the court may hold such hearings from time to time as the court determines are desirable, after such notice as it determines appropriate, and may extend, shorten or modify the terms of the order.

      (3) The court may vacate an order issued under this section if the court determines that the authority has not commenced a rehabilitation or liquidation proceeding within a reasonable time.

      (4) An order of the court directing a rehabilitation or liquidation proceeding vacates the order issued under this section.

      (5) Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the coordinated care organization.

      (6) At any time after a court issues an order under this section, the court may direct that notice of the order be given to a person if the court determines both of the following:

      (a) That the person was not notified of the hearing on the order and did not appear at the hearing.

      (b) That the interest of the person is or will be substantially affected by the order. [2019 c.478 §28]

 

      415.284 Appointment of special deputy directors to assist in supervision of CCO or delinquency proceedings. The Oregon Health Authority, in connection with supervising a coordinated care organization or conducting a delinquency proceeding, may appoint one or more special deputy directors to act for the authority and may employ counsel, clerks and assistants as the authority deems necessary. Unless otherwise provided by the authority, a person so appointed is not a state employee solely by reason of the appointment. The compensation of the special deputies, counsel, clerks or assistants and all expenses of supervising the coordinated care organization or taking possession of a delinquent coordinated care organization and conducting delinquency proceedings must be paid out of the funds or assets of the coordinated care organization. A special deputy acting within limits the authority imposes with respect to supervising a coordinated care organization or conducting delinquency proceedings has a receiver’s powers and is subject to a receiver’s duties. [2019 c.478 §37]

 

      415.300 Rehabilitation proceeding. (1) An order to rehabilitate a coordinated care organization shall direct the Oregon Health Authority to take possession of the property of the coordinated care organization and to conduct the business of the coordinated care organization, and to take such steps toward removing the causes and conditions that made rehabilitation necessary as directed by the court.

      (2) If at any time the authority deems that further efforts to rehabilitate the coordinated care organization would be useless, the authority may apply to the court for an order of liquidation under ORS 415.335.

      (3) The authority may apply at any time for an order terminating the rehabilitation proceeding and permitting the coordinated care organization to resume possession of its property and the conduct of its business, but the order may not be granted except after a full hearing. [2019 c.478 §29]

 

      415.330 Grounds for order to liquidate. The Oregon Health Authority may apply for an order directing the authority to liquidate the business of a coordinated care organization, regardless of whether there has been a prior order directing the authority to rehabilitate the coordinated care organization, upon any of the grounds specified in ORS 415.280, or if the coordinated care organization:

      (1) Has ceased transacting business for a period of one year;

      (2) Under any laws except ORS 415.203 to 415.430 or rules adopted pursuant to ORS 415.011, has:

      (a) Commenced voluntary liquidation or dissolution;

      (b) Attempted to commence or prosecute an action or proceeding to liquidate its business or affairs;

      (c) Commenced dissolving its corporate charter; or

      (d) Commenced procuring the appointment of a receiver, trustee, custodian, or sequestrator; or

      (3) Is insolvent. [2019 c.478 §49]

 

      415.333 Powers of Oregon Health Authority in liquidation proceeding. The Oregon Health Authority, after taking possession of the property and business of any coordinated care organization, shall:

      (1) Subject to a court’s direction, immediately conduct the business of the coordinated care organization or take steps authorized by law to rehabilitate, liquidate or conserve the coordinated care organization;

      (2) Be vested with the coordinated care organization’s title and interest in and to all assets and property of every kind, both tangible and intangible;

      (3) Possess, in the name of the coordinated care organization or in the name of the authority, all rights, privileges, powers and authority granted to coordinated care organizations in this state or otherwise possessed by coordinated care organizations generally, without regard to any limitations prescribed in the articles or bylaws of the coordinated care organization; and

      (4) Perform and do all acts that the authority deems necessary, advisable or expedient. [2019 c.478 §30]

 

      415.335 Order to liquidate. (1) An order to liquidate the business of a coordinated care organization shall direct the Oregon Health Authority to:

      (a) Take possession of the property of the coordinated care organization;

      (b) Liquidate the business of the coordinated care organization;

      (c) Deal with the coordinated care organization’s property and business in the name of the authority or in the name of the coordinated care organization as the court may direct; and

      (d) Give notice to all creditors who may have claims against the coordinated care organization to present such claims.

      (2) The authority may apply to the court for an order dissolving the corporate existence of a coordinated care organization at the time the authority applies for an order to liquidate or at any time after an order to liquidate has been granted. [2019 c.478 §51]

 

      415.340 Oregon Health Authority to be appointed receiver in delinquency proceeding; powers and duties. (1) Whenever a receiver is to be appointed in delinquency proceedings for a coordinated care organization, the court shall appoint the Oregon Health Authority as the receiver. The court shall direct the receiver to take possession of the property of the coordinated care organization and to administer the property as ordered by the court.

      (2) Any deed or other instrument executed in a delinquency proceeding or by an order of liquidation shall be valid and effectual for all purposes as though the same had been executed by the person affected by any proceedings or by the officers of the coordinated care organization pursuant to the direction of its governing board. A record of the order directing possession to be taken, or a certified copy of the order, filed in the office where instruments affecting title to property are required to be filed or recorded, shall have the same effect as the filing or recording of a deed, bill of sale or other evidence of title.

      (3) If any real property sold by the authority is located in a county other than the county where the proceeding is pending, the authority shall file a certified copy of the order of the appointment, or order authorizing or ratifying the sale, with the recording officer for the county where the property is located.

      (4) The authority as receiver shall be responsible on the official bond of the authority for the proper administration of all property coming into the possession or control of the authority. The court may at any time require an additional bond from the authority or the deputies of the authority if deemed desirable for the protection of the property. [2019 c.478 §45]

 

      415.341 Immunity from civil liability for receivers. (1) The following persons are entitled to protection under this section:

      (a) All receivers responsible for the conduct of a delinquency proceeding under ORS 415.203 to 415.430, including present and former receivers.

      (b) All employees of the receiver described in paragraph (a) of this subsection. For purposes of this section, such employees include all present and former special deputies and assistant special deputies appointed by the Oregon Health Authority and all persons whom the authority, special deputies or assistant special deputies have employed to assist in a delinquency proceeding. Unless designated as special deputies, attorneys, accountants, auditors and other professional persons or firms who are retained by the receiver as independent contractors and their employees are not entitled to protection under this section.

      (2) The receiver and employees of the receiver shall have official immunity and shall be immune from civil action and liability, both personally and in their official capacities, for any tort claim or demand, whether groundless or otherwise, arising out of any alleged act, error or omission of the receiver or any employee occurring in the performance of duties. For purposes of this section, “tort” has the meaning given that term in ORS 30.260.

      (3) The receiver and employees of the receiver shall be indemnified from the assets of the coordinated care organization against any tort claim arising out of any alleged act, error or omission of the receiver or any employee occurring in the performance of duties, whether personally or in the official capacity of the receiver or employee. Any indemnification made under this subsection is an administrative expense of the coordinated care organization.

      (4) The provisions of subsections (2) and (3) of this section do not apply in case of malfeasance in office or willful or wanton neglect of duty.

      (5) In any legal action in which the receiver is a defendant, the portion of any settlement relating to the alleged act, error or omission of the receiver is subject to the approval of the court before which the delinquency proceeding is pending. The court may not approve the portion of the settlement if it determines:

      (a) That the claim did not occur in the performance of the receiver’s duties; or

      (b) That the claim was caused by malfeasance in office or willful or wanton neglect of duty by the receiver.

      (6) This section may not be construed or applied to deprive the receiver or any employee of any immunity, indemnity, benefits of law, rights or any defense otherwise available. [2019 c.478 §36]

 

      415.350 Right to assets of CCO fixed as of date of order to liquidate. The rights and liabilities of the coordinated care organization, its creditors and all other persons interested in its assets shall, unless otherwise directed by the court, be fixed as of the date on which an order directing the liquidation of the coordinated care organization is filed in the office of the clerk of the court that made the order, subject to the provisions of ORS 415.404 with respect to the rights of claimants holding contingent claims. [2019 c.478 §50]

 

(Claims Against Insolvent Coordinated Care Organization)

 

      415.400 Filing proof of claim against CCO declared by court to be insolvent. (1) A court may make an order declaring a coordinated care organization insolvent at the time it grants an order of liquidation or at any time during the liquidation proceedings. When the order is issued, the Oregon Health Authority shall provide notice, in the manner determined by the court, to all persons who may have claims against the coordinated care organization and who have not filed proper proofs of their claims. The notice must instruct the persons to present their claims to the authority, at a specified place, within four months from the date of the entry of the insolvency order or within a longer time as the court prescribes. The notice must specify the last day that persons may file proofs of claims.

      (2) A claimant filing a proof of claim after the last day specified for filing a claim may share in the distribution of the assets after all allowed claims for which proofs were timely filed are paid in full. [2019 c.478 §31]

 

      415.401 Requirements for proof of claim. (1) All claims against a coordinated care organization against which delinquency proceedings have been begun shall:

      (a) Set forth in reasonable detail:

      (A) The amount of the claim or the basis upon which the amount can be ascertained;

      (B) The facts upon which the claim is based; and

      (C) The priorities asserted, if any;

      (b) Be verified by the affidavit of the claimant or someone authorized to act on behalf of the claimant and having knowledge of the facts; and

      (c) Be supported by documentation.

      (2) All claims shall be filed with the receiver on or before the last date for filing as specified in ORS 415.400.

      (3) After the expiration of any period for filing of claims, the receiver shall report the claims timely filed to the court, with recommendations for the actions to be taken by the court. Upon receipt of the report, the court shall fix a time for hearing the claims and shall direct the claimants or the receiver, as specified by the court, to give notice to interested persons, in the manner determined by the court, of the time and place of the hearing, the amount and nature of the claim, the priorities asserted, if any, and the recommendation of the receiver with respect to the claim.

      (4) All interested persons shall be entitled to appear at the hearing, and the court shall enter an order allowing, allowing in part or disallowing the claim. The order is an appealable order. [2019 c.478 §38]

 

      415.402 Preference of claims. Except as provided in ORS 415.406 for secured claims, the claims to be paid in full in delinquency proceedings against a coordinated care organization prior to the payment of any other claims, and the order of payment, shall be:

      (1) The expenses of administering the delinquency proceedings;

      (2) Claims that are legally due and owing by the coordinated care organization to the United States;

      (3) Compensation or wages owed to employees other than officers of the coordinated care organization, for services rendered within three months prior to the commencement of the delinquency proceeding, but not exceeding $5,000 for each employee;

      (4) Claims legally due and owed by the coordinated care organization to the state; and

      (5) Claims, including special deposit claims, owed to any person that by the laws of the state is entitled to priority. [2019 c.478 §42]

 

      415.403 Priority of preferred claims. All claims that are preferred under the laws of the state, whether owing to residents or nonresidents, shall be given equal priority of payment from the general assets of a coordinated care organization in a delinquency proceeding against the coordinated care organization regardless of where the assets are located. [2019 c.478 §39]

 

      415.404 Contingent claims. (1) A contingent claim against a coordinated care organization shall be filed, presented and reported in the same manner and within the same time limitations as provided in ORS 415.400 for a noncontingent claim. Contingent claims shall be allowed to share in a distribution of assets in the same manner as noncontingent claims of the same class and priority, provided that the contingent claim becomes an absolute claim either as a result of proof presented or litigation.

      (2) Nothing in subsection (1) of this section prevents or bars the Oregon Health Authority from compromising a disputed claim with a claimant, whether contingent or noncontingent, if the compromise is justified and supported by the facts and circumstances.

      (3) If full or partial distribution to noncontingent claimants is authorized or directed by the court prior to satisfaction of the requirements of subsection (1) of this section, the authority shall retain a sum equal to the amount that would have been paid on the contingent claims if the requirements in subsection (1) of this section had been met. The amount withheld shall be distributed to the person or persons found by the court to be entitled to a distribution when:

      (a) The contingent claims are fully established as provided in subsection (1) of this section; or

      (b) The authority is satisfied that the contingent claims are without merit or cannot be proved or established, or the statute of limitations would bar further consideration or recovery on the claim.

      (4)(a) A judgment entered after the commencement of a delinquency proceeding is conclusive evidence in the liquidation proceeding, either of liability or of the amount of damages.

      (b) A judgment entered after the date of entry of a liquidation order may not be considered in the liquidation proceedings as evidence of liability or of the amount of damages. [2019 c.478 §44]

 

      415.405 Priority of special deposit claims. The owners of special deposit claims against a coordinated care organization for which a receiver is appointed shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of the deposits. If there is a deficiency in any deposit so that claims secured by the deposit are not fully discharged, the claimants may share in the general assets of the coordinated care organization after:

      (1) The payment of claims of general creditors; and

      (2) Claimants against other special deposits, who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit. [2019 c.478 §46]

 

      415.406 Priority of secured claims. The owner of a secured claim against a coordinated care organization for which a receiver has been appointed may surrender the security and file a claim as a general creditor, or the claim may be discharged by resort to the security, in which case the deficiency, if any, shall be treated as a claim against the general assets of the coordinated care organization on the same basis as claims of unsecured creditors. [2019 c.478 §47]

 

      415.420 Attachment or garnishment prohibited during delinquency proceeding. During the pendency of a delinquency proceeding against a coordinated care organization, an action or proceeding to obtain an attachment, garnishment or execution may not be commenced or maintained in the courts of this state against the delinquent coordinated care organization or its assets. An attachment, garnishment or execution obtained prior to the commencement of a delinquency proceeding or at any time thereafter shall be void as against any rights arising in the delinquency proceeding unless the attachment, garnishment or execution obtained by the action or proceeding was obtained more than four months prior to the commencement of the delinquency proceeding. [2019 c.478 §40]

 

      415.422 Voidable transfers or liens. (1) A transfer of or lien upon the property of a coordinated care organization, other than as provided in ORS 415.420, is voidable if the transfer or lien is:

      (a) Made or created within four months prior to the commencement of a delinquency proceeding;

      (b) Made with the intent of giving to a transferee or lienor or enabling the transferee or lienor to obtain a greater percentage of the debt than any other creditor of the same class; and

      (c) Accepted by a transferee or lienor who has reasonable cause to believe that the transferee or lienor will obtain a greater percentage of the debt than any other creditor of the same class.

      (2) Every director, officer, employee or other person acting on behalf of a coordinated care organization who participates in a transfer or lien described in subsection (1) of this section, and every person receiving any property of the coordinated care organization or the benefit of the transfer or lien, shall be personally liable as described in subsection (3) of this section.

      (3) The Oregon Health Authority, as a receiver in a delinquency proceeding, may avoid any transfer of, or lien upon, the property of a coordinated care organization described in subsection (1) of this section and may recover the property or value of the property transferred or attached unless the person in possession of the property or the lien was a bona fide holder for value prior to the commencement of the delinquency proceeding. [2019 c.478 §41]

 

      415.424 Offsets of mutual debts or credits. Offsets may not be allowed in cases of mutual debts or mutual credits between the coordinated care organization and another person in connection with a delinquency proceeding, except with respect to reinsurance. [2019 c.478 §43]

 

      415.430 Liability of member of CCO to pay provider for cost of care. (1) For the purpose of this section only, and only in the event of a finding of impairment by the Oregon Health Authority, as described in ORS 415.203, or of a final order of liquidation, any covered health care service furnished within this state by a provider to a member of a coordinated care organization shall be considered to have been furnished pursuant to a contract between the provider and the coordinated care organization with whom the member was enrolled when the services were furnished.

      (2) Each contract between a coordinated care organization and a provider of health care services shall provide that if the coordinated care organization fails to pay for covered health care services as set forth in the coordinated care organization’s contract with the authority, the member is not liable to the provider for any amounts owed by the coordinated care organization.

      (3) If the contract between the contracting provider and the coordinated care organization has not been reduced to writing or fails to contain the provisions required by subsection (2) of this section, the member is not liable to the authority for any amounts owed by the coordinated care organization.

      (4) A contracting provider or agent, trustee or assignee of the contracting provider may not maintain a civil action against a member to collect any amounts owed by the coordinated care organization for which the member is not liable to the contracting provider under this section.

      (5) Nothing in this section impairs the right of a provider to charge, collect from, attempt to collect from or maintain a civil action against a member for any of the following:

      (a) Health care services not covered by the medical assistance program.

      (b) Health care services rendered after the termination of the contract between the coordinated care organization and the provider, unless the health care services were rendered during the confinement in an inpatient facility and the confinement began prior to the date of termination or unless the provider has assumed post-termination treatment obligations under the contract.

      (6) Nothing in this section prohibits a member from seeking noncovered health care services from a provider and accepting financial responsibility for these services.

      (7) A coordinated care organization may not limit the right of a provider of health care services to contract with the patient for payment of services not within the scope of coverage under the medical assistance program. [2019 c.478 §52]

 

REGULATION OF MATERIAL CHANGE TRANSACTIONS INVOLVING HEALTH CARE ENTITIES

 

      415.500 Definitions. As used in this section and ORS 415.501 and 415.505:

      (1) “Corporate affiliation” has the meaning prescribed by the Oregon Health Authority by rule, including:

      (a) Any relationship between two organizations that reflects, directly or indirectly, a partial or complete controlling interest or partial or complete corporate control; and

      (b) Transactions that merge tax identification numbers or corporate governance.

      (2) “Essential services” means:

      (a) Services that are funded on the prioritized list described in ORS 414.690; and

      (b) Services that are essential to achieve health equity.

      (3) “Health benefit plan” has the meaning given that term in ORS 743B.005.

      (4)(a) “Health care entity” includes:

      (A) An individual health professional licensed or certified in this state;

      (B) A hospital, as defined in ORS 442.015, or hospital system, as defined by the authority by rule;

      (C) A carrier, as defined in ORS 743B.005, that offers a health benefit plan in this state;

      (D) A Medicare Advantage plan;

      (E) A coordinated care organization or a prepaid managed care health services organization, as both terms are defined in ORS 414.025; and

      (F) Any other entity that has as a primary function the provision of health care items or services or that is a parent organization of, or is an entity closely related to, an entity that has as a primary function the provision of health care items or services.

      (b) “Health care entity” does not include:

      (A) Long term care facilities, as defined in ORS 442.015.

      (B) Facilities licensed and operated under ORS 443.400 to 443.455.

      (5) “Health equity” has the meaning prescribed by the Oregon Health Policy Board and adopted by the authority by rule.

      (6)(a) “Material change transaction” means:

      (A) A transaction in which at least one party had average revenue of $25 million or more in the preceding three fiscal years and another party:

      (i) Had an average revenue of at least $10 million in the preceding three fiscal years; or

      (ii) In the case of a new entity, is projected to have at least $10 million in revenue in the first full year of operation at normal levels of utilization or operation as prescribed by the authority by rule.

      (B) If a transaction involves a health care entity in this state and an out-of-state entity, a transaction that otherwise qualifies as a material change transaction under this paragraph that may result in increases in the price of health care or limit access to health care services in this state.

      (b) “Material change transaction” does not include:

      (A) A clinical affiliation of health care entities formed for the purpose of collaborating on clinical trials or graduate medical education programs.

      (B) A medical services contract or an extension of a medical services contract.

      (C) An affiliation that:

      (i) Does not impact the corporate leadership, governance or control of an entity; and

      (ii) Is necessary, as prescribed by the authority by rule, to adopt advanced value-based payment methodologies to meet the health care cost growth targets under ORS 442.386.

      (D) Contracts under which one health care entity, for and on behalf of a second health care entity, provides patient care and services or provides administrative services relating to, supporting or facilitating the provision of patient care and services, if the second health care entity:

      (i) Maintains responsibility, oversight and control over the patient care and services; and

      (ii) Bills and receives reimbursement for the patient care and services.

      (E) Transactions in which a participant that is a health center as defined in 42 U.S.C. 254b, while meeting all of the participant’s obligations, acquires, affiliates with, partners with or enters into any agreement with another entity unless the transaction would result in the participant no longer qualifying as a health center under 42 U.S.C. 254b.

      (7)(a) “Medical services contract” means a contract to provide medical or mental health services entered into by:

      (A) A carrier and an independent practice association;

      (B) A carrier, coordinated care organization, independent practice association or network of providers and one or more providers, as defined in ORS 743B.001;

      (C) An independent practice association and an individual health professional or an organization of health care providers;

      (D) Medical, dental, vision or mental health clinics; or

      (E) A medical, dental, vision or mental health clinic and an individual health professional to provide medical, dental, vision or mental health services.

      (b) “Medical services contract” does not include a contract of employment or a contract creating a legal entity and ownership of the legal entity that is authorized under ORS chapter 58, 60 or 70 or under any other law authorizing the creation of a professional organization similar to those authorized by ORS chapter 58, 60 or 70, as may be prescribed by the authority by rule.

      (8) “Net patient revenue” means the total amount of revenue, after allowance for contractual amounts, charity care and bad debt, received for patient care and services, including:

      (a) Value-based payments;

      (b) Incentive payments;

      (c) Capitation payments or payments under any similar contractual arrangement for the prepayment or reimbursement of patient care and services; and

      (d) Any payment received by a hospital to reimburse a hospital assessment under ORS 414.855.

      (9) “Revenue” means:

      (a) Net patient revenue; or

      (b) The gross amount of premiums received by a health care entity that are derived from health benefit plans.

      (10) “Transaction” means:

      (a) A merger of a health care entity with another entity;

      (b) An acquisition of one or more health care entities by another entity;

      (c) New contracts, new clinical affiliations and new contracting affiliations that will eliminate or significantly reduce, as defined by the authority by rule, essential services;

      (d) A corporate affiliation involving at least one health care entity; or

      (e) Transactions to form a new partnership, joint venture, accountable care organization, parent organization or management services organization, as prescribed by the authority by rule. [2021 c.615 §1]

 

      415.501 Procedures for review of material change transactions; rules. (1) The purpose of this section is to promote the public interest and to advance the goals set forth in ORS 414.018 and the goals of the Oregon Integrated and Coordinated Health Care Delivery System described in ORS 414.570.

      (2) In accordance with subsection (1) of this section, the Oregon Health Authority shall adopt by rule criteria approved by the Oregon Health Policy Board for the consideration of requests by health care entities to engage in a material change transaction and procedures for the review of material change transactions under this section.

      (3)(a) A notice of a material change transaction involving the sale, merger or acquisition of a domestic health insurer shall be submitted to the Department of Consumer and Business Services as an addendum to filings required by ORS 732.517 to 732.546 or 732.576. The department shall provide to the authority the notice submitted under this subsection to enable the authority to conduct a review in accordance with subsections (5) and (7) of this section. The authority shall notify the department of the outcome of the authority’s review.

      (b) The department shall make the final determination in material change transactions involving the sale, merger or acquisition of a domestic health insurer and shall coordinate with the authority to incorporate the authority’s review into the department’s final determination.

      (4) An entity shall submit to the authority a notice of a material change transaction, other than a transaction described in subsection (3) of this section, in the form and manner prescribed by the authority, no less than 180 days before the date of the transaction and shall pay a fee prescribed in ORS 415.512.

      (5) No later than 30 days after receiving a notice described in subsections (3) and (4) of this section, the authority shall conduct a preliminary review to determine if the transaction has the potential to have a negative impact on access to affordable health care in this state and meets the criteria in subsection (9) of this section.

      (6) Following a preliminary review, the authority or the department shall approve a transaction or approve a transaction with conditions designed to further the goals described in subsection (1) of this section based on criteria prescribed by the authority by rule, including but not limited to:

      (a) If the transaction is in the interest of consumers and is urgently necessary to maintain the solvency of an entity involved in the transaction; or

      (b) If the authority determines that the transaction does not have the potential to have a negative impact on access to affordable health care in this state or the transaction is likely to meet the criteria in subsection (9) of this section.

      (7)(a) Except as provided in paragraph (b) of this subsection, if a transaction does not meet the criteria in subsection (6) of this section, the authority shall conduct a comprehensive review and may appoint a review board of stakeholders to conduct a comprehensive review and make recommendations as provided in subsections (11) to (18) of this section. The authority shall complete the comprehensive review no later than 180 days after receipt of the notice unless the parties to the transaction agree to an extension of time.

      (b) The authority or the department may intervene in a transaction described in ORS 415.500 (6)(a)(C) in which the final authority rests with another state and, if the transaction is approved by the other state, may place conditions on health care entities operating in this state with respect to the insurance or health care industry market in this state, prices charged to patients residing in this state and the services available in health care facilities in this state, to serve the public good.

      (8) The authority shall prescribe by rule:

      (a) Criteria to exempt an entity from the requirements of subsection (4) of this section if there is an emergency situation that threatens immediate care services and the transaction is urgently needed to protect the interest of consumers;

      (b) Provision for the authority’s failure to complete a review under subsection (5) of this section within 30 days; and

      (c) Criteria for when to conduct a comprehensive review and appoint a review board under subsection (7) of this section that must include, but is not limited to:

      (A) The potential loss or change in access to essential services;

      (B) The potential to impact a large number of residents in this state; or

      (C) A significant change in the market share of an entity involved in the transaction.

      (9) A health care entity may engage in a material change transaction if, following a comprehensive review conducted by the authority and recommendations by a review board appointed under subsection (7) of this section, the authority determines that the transaction meets the criteria adopted by the department by rule under subsection (2) of this section and:

      (a)(A) The parties to the transaction demonstrate that the transaction will benefit the public good and communities by:

      (i) Reducing the growth in patient costs in accordance with the health care cost growth targets established under ORS 442.386 or maintain a rate of cost growth that exceeds the target that the entity demonstrates is the best interest of the public;

      (ii) Increasing access to services in medically underserved areas; or

      (iii) Rectifying historical and contemporary factors contributing to a lack of health equities or access to services; or

      (B) The transaction will improve health outcomes for residents of this state; and

      (b) There is no substantial likelihood of anticompetitive effects from the transaction that outweigh the benefits of the transaction in increasing or maintaining services to underserved populations.

      (10) The authority may suspend a proposed material change transaction if necessary to conduct an examination and complete an analysis of whether the transaction is consistent with subsection (9) of this section and the criteria adopted by rule under subsection (2) of this section.

      (11)(a) A review board convened by the authority under subsection (7) of this section must consist of members of the affected community, consumer advocates and health care experts. No more than one-third of the members of the review board may be representatives of institutional health care providers. The authority may not appoint to a review board an individual who is employed by an entity that is a party to the transaction that is under review or is employed by a competitor that is of a similar size to an entity that is a party to the transaction.

      (b) A member of a review board shall file a notice of conflict of interest and the notice shall be made public.

      (12) The authority may request additional information from an entity that is a party to the material change transaction, and the entity shall promptly reply using the form of communication requested by the authority and verified by an officer of the entity if required by the authority.

      (13)(a) An entity may not refuse to provide documents or other information requested under subsection (4) or (12) of this section on the grounds that the information is confidential.

      (b) Material that is privileged or confidential may not be publicly disclosed if:

      (A) The authority determines that disclosure of the material would cause harm to the public;

      (B) The material may not be disclosed under ORS 192.311 to 192.478; or

      (C) The material is not subject to disclosure under ORS 705.137.

      (c) The authority shall maintain the confidentiality of all confidential information and documents that are not publicly available that are obtained in relation to a material change transaction and may not disclose the information or documents to any person, including a member of the review board, without the consent of the person who provided the information or document. Information and documents described in this paragraph are exempt from disclosure under ORS 192.311 to 192.478.

      (14) The authority or the Department of Justice may retain actuaries, accountants or other professionals independent of the authority who are qualified and have expertise in the type of material change transaction under review as necessary to assist the authority in conducting the analysis of a proposed material change transaction. The authority or the Department of Justice shall designate the party or parties to the material change transaction that shall bear the reasonable and actual cost of retaining the professionals.

      (15) A review board may hold up to two public hearings to seek public input and otherwise engage the public before making a determination on the proposed transaction. A public hearing must be held in the service area or areas of the health care entities that are parties to the material change transaction. At least 10 days prior to the public hearing, the authority shall post to the authority’s website information about the public hearing and materials related to the material change transaction, including:

      (a) A summary of the proposed transaction;

      (b) An explanation of the groups or individuals likely to be impacted by the transaction;

      (c) Information about services currently provided by the health care entity, commitments by the health care entity to continue such services and any services that will be reduced or eliminated;

      (d) Details about the hearings and how to submit comments, in a format that is easy to find and easy to read; and

      (e) Information about potential or perceived conflicts of interest among executives and members of the board of directors of health care entities that are parties to the transaction.

      (16) The authority shall post the information described in subsection (15)(a) to (d) of this section to the authority’s website in the languages spoken in the area affected by the material change transaction and in a culturally sensitive manner.

      (17) The authority shall provide the information described in subsection (15)(a) to (d) of this section to:

      (a) At least one newspaper of general circulation in the area affected by the material change transaction;

      (b) Health facilities in the area affected by the material change transaction for posting by the health facilities; and

      (c) Local officials in the area affected by the material change transaction.

      (18) A review board shall make recommendations to the authority to approve the material change transaction, disapprove the material change transaction or approve the material change transaction subject to conditions, based on subsection (9) of this section and the criteria adopted by rule under subsection (2) of this section. The authority shall issue a proposed order and allow the parties and the public a reasonable opportunity to make written exceptions to the proposed order. The authority shall consider the parties’ and the public’s written exceptions and issue a final order setting forth the authority’s findings and rationale for adopting or modifying the recommendations of the review board. If the authority modifies the recommendations of the review board, the authority shall explain the modifications in the final order and the reasons for the modifications. A party to the material change transaction may contest the final order as provided in ORS chapter 183.

      (19) A health care entity that is a party to an approved material change transaction shall notify the authority upon the completion of the transaction in the form and manner prescribed by the authority. One year, two years and five years after the material change transaction is completed, the authority shall analyze:

      (a) The health care entities’ compliance with conditions placed on the transaction, if any;

      (b) The cost trends and cost growth trends of the parties to the transaction; and

      (c) The impact of the transaction on the health care cost growth target established under ORS 442.386.

      (20) The authority shall publish the authority’s analyses and conclusions under subsection (19) of this section and shall incorporate the authority’s analyses and conclusions under subsection (19) of this section in the report described in ORS 442.386 (6).

      (21) This section does not impair, modify, limit or supersede the applicability of ORS 65.800 to 65.815, 646.605 to 646.652 or 646.705 to 646.805.

      (22) Whenever it appears to the Director of the Oregon Health Authority that any person has committed or is about to commit a violation of this section or any rule or order issued by the authority under this section, the director may apply to the Circuit Court for Marion County for an order enjoining the person, and any director, officer, employee or agent of the person, from the violation, and for such other equitable relief as the nature of the case and the interest of the public may require.

      (23) The remedies provided under this section are in addition to any other remedy, civil or criminal, that may be available under any other provision of law.

      (24) The authority may adopt rules necessary to carry out the provisions of this section. [2021 c.615 §2]

 

      415.505 Conflicts of interest prohibited. (1) An officer or employee of the Oregon Health Authority who is delegated responsibilities in the enforcement of ORS 415.501 or rules adopted pursuant to ORS 415.501 may not:

      (a) Be a director, officer or employee of or be financially interested in an entity that is a party to a proposed material change transaction except as an enrollee or patient of a health care entity or by reason of rights vested in compensation or benefits related to services performed prior to affiliation with the authority; or

      (b) Be engaged in any other business or occupation interfering with or inconsistent with the duties of the authority.

      (2) This section does not permit any conduct, affiliation or interest that is otherwise prohibited by public policy. [2021 c.615 §3]

 

      415.510 Quadrennial study of impact of health care consolidation. Every four years, the Oregon Health Authority shall commission a study of the impact of health care consolidation in this state. The study must review consolidation occurring during the previous four-year period and include an analysis of:

      (1) The impact on costs to consumers for health care either to the benefit or the detriment of consumers; and

      (2) Any increases or decreases in the quality of care, including:

      (a) Improvement or reductions in morbidity;

      (b) Improvement or reductions in the management of population health;

      (c) Changes to health and patient outcomes, particularly for underserved and uninsured individuals, recipients of medical assistance and other low-income individuals and individuals living in rural areas, as measured by nationally recognized measures of the quality of health care, such as measures used or endorsed by the National Committee for Quality Assurance, the National Quality Forum, the Physician Consortium for Performance Improvement or the Agency for Healthcare Research and Quality. [2021 c.615 §6]

 

      Note: Section 6a, chapter 615, Oregon Laws 2021, provides:

      Sec. 6a. The Oregon Health Authority shall commission the first study under section 6 of this 2021 Act [415.510] no later than September 15, 2026. [2021 c.615 §6a]

 

      415.512 Fees; rules. (1) The Oregon Health Authority shall prescribe by rule a fee to be paid under ORS 415.501 (3), proportionate to the size of the parties to the transaction, sufficient to reimburse the costs of administering ORS 415.501.

      (2) Moneys received by the authority under this section shall be deposited to the Oregon Health Authority Fund established in ORS 413.101 to be used for carrying out ORS 415.501. [2021 c.615 §4]

 

      415.900 Civil penalties. (1) In addition to any other penalty imposed by law, the Director of the Oregon Health Authority may impose a civil penalty, as determined by the director, for a violation of ORS 413.037 or 415.501. The amount of the civil penalty may not exceed $10,000 for each offense. The civil penalty imposed on an individual health professional may not exceed $1,000 for each offense.

      (2) Civil penalties shall be imposed and enforced in accordance with ORS 183.745.

      (3) Moneys received by the Oregon Health Authority under this section shall be paid to the State Treasury and credited to the General Fund. [2021 c.615 §5]

 

      415.990 [Repealed by 1957 c.388 §17]

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