Oregon's CCO Quality Incentive Program works to improve health care quality for Oregon Health Plan (Medicaid) members. The federal government allows states to have programs that help improve the quality of care Medicaid members receive. The CCO Quality Incentive Program gives CCOs bonuses for improving on a set of
incentive measures.
Bonuses are on top of monthly payments that cover the cost of care. Because these are bonuses, incentive funds are not guaranteed.
Frequently Asked Questions
Definitions
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CCO Metrics: Incentive Payments
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Frequently Asked Questions
In 2020, the COVID-19 pandemic upended the CCO Quality Incentive Program's usual processes. Under
the original 2020 CCO contract, OHA was to withhold 4.25% of each CCO’s per-member per-month (PMPM) or capitation
payments to fund the Quality Pool. Due to the pandemic, the withhold
was suspended in April 2020 so funds could be infused into the health care
system. This resulted in about $17 million or more per month to help CCOs address critical needs.
The funds withheld from January to March (Quarter 1) 2020 remained in the Quality Pool. In July 2020, the Metrics and Scoring Committee suspended all 2020 benchmarks. This meant that CCOs only had to report data on incentive metrics to earn bonuses.
All CCOs met this report-only requirement. All Quality Pool funds were distributed to CCOs in June 2021. We do not include 2020 in most charts since all CCOs were paid 100% of their eligible Quality Pool in Phase 1.
Since 2021, we report total CCO enrollment based on the yearly average of members per month. These estimates come from OHA's Office of Actuarial and
Financial Analytics (OAFA) and are used to calculate Quality Pool payments. Prior to 2021, we reported total CCO enrollment from December of the prior year.
To encourage ongoing improvement, CCOs can meet a measure by achieving either 1) the benchmark or 2) a CCO-specific improvement target.
- Benchmarks are the same for all CCOs. This benchmark is meant to be an aspirational goal, generally at the 75th or 90th percentile of national performance.
Improvement targets are smaller goals specific to each CCO, between their prior year's rate (baseline) and the benchmark. Specifically, CCO-specific improvement targets are a 10 percent reduction in the gap between their baseline and the benchmark.
Benchmarks and minimum improvement targets are set annually by a public body called the Metrics and Scoring Committee. The public is welcome to attend Metrics and Scoring Committee meetings and provide public testimony.
We use the Minnesota Department of Health Quality Incentive Payment System method to calculate improvement targets, called the Minnesota method. With this method, CCOs must reduce the gap between their prior year's rate (baseline) and the benchmark by 10 percent (or one-tenth).
For example, if the benchmark is 50% and a CCO’s baseline is 20%, then the CCO would need to improve by 3 percentage points (ppt).
Minnesota method: (50% - 20%) / 10 = 3%
Improvement target: 20% + 3% = 23%
With the Minnesota method, CCOs would never have to reach the benchmark. They would only have to get closer to the benchmark each year. This is why the Metrics and Scoring Committee selects a "floor" or minimum goal.
If the Minnesota method is lower than the floor, then the floor will be added to the baseline. For example, if the Minnesota method was 1 ppt and the floor was 3 ppt, the CCO would need to improve by 3 ppt.
Definitions
In the "Measures met by year" tab, we show the CCO who had the best service rate for each measure in a given year. There may be instances where the top-performing CCO did not meet the benchmark or their improvement target.
Some incentive measures have multiple required components. This may include different service types or age groups. For Upstream measures, this can reflect "glide path" requirements alongside service rates. Glide paths lay the necessary groundwork for systems change, including building new data systems, partnerships and processes.
To see incentive measure history and detailed measure specifications, please visit our CCO Quality Incentive Program Resources.
Must-pass measures have
a benchmark or reporting requirement that CCOs must meet to be eligible to receive full Quality
Pool payments. There were no must-pass measures for incentive years 2022, 2023 or 2024.
To see incentive measure history and detailed measure specifications, please visit our CCO Quality Incentive Program Resources.
Bonuses are on top of monthly payments that cover the
cost of care.
Each month OHA pays CCOs a fixed, predefined amount of money for each Oregon Health Plan (OHP) member that
a CCO has enrolled in their plan. These cost of care payments are called per-member per-month (PMPM) or capitation. CCOs use this money to pay for future care OHP members receive from providers.
OHA develops capitation rates by estimating how much CCOs will likely pay in providing care
to OHP members. The federal government reviews OHA’s capitation rates and approves the
rates provided to cover members’ OHP benefit and health care costs.
CCOs review and accept these rates as reasonable for covering the cost and coordination of
care for OHP members. You can learn more about how these payment amounts are created
on the OHP rate development webpage.
In the CCO Quality Incentive Program, bonuses are paid in two phases: first from the Quality Pool and second from the Challenge Pool.
The Quality Pool holds the total pool of bonus funds. The amount CCOs can earn from the Quality Pool is determined by:
- CCO size and composition (number of enrolled members and their eligibility status)
- How well CCOs perform on a set of incentive measures.
Incentive metrics are selected by a public body called the Metrics and Scoring Committee. The committee also selects how much CCOs must improve by with benchmarks and improvement targets (see Frequently Asked Questions above for more information). The public is welcome to attend Metrics and Scoring Committee meetings and provide public testimony.
Each year, OHA decides the size of the Quality Pool by considering budgetary and other factors. Per code of federal regulations (CFR), total CCO payments cannot be greater than 105% of total PMPM payments. This means each CCO's bonus is capped at 5% of their total PMPM payments. In 2024, the total Quality Pool was set at 4.25% of that year's aggregate PMPM (capitation) to CCOs. See table below for Quality Pool amounts and percentage of total PMPM payments for the past 10 years.
| Measurement year | Quality Pool amount in millions | Percentage of total PMPM payments |
| 2015 | $168 | 4% |
| 2016 | $178.8 | 4.25% |
2017
| $178.3 | 4.25% |
| 2018 | $188 | 4.25% |
| 2019 | $166.7
| 3.5% |
20201
| $52.8
| 4.25% (Quarter 1 only)
|
| 2021 | $266.2 | 3.75% |
| 2022 | $300.8 | 4.25% |
| 2023 | $325.9 | 4.25% |
| 2024 | $325 | 4.25% |
To learn more about the Quality Pool, please visit 2024 Quality Pool Methodology.
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1 Under the original 2020 CCO contract, OHA was to withhold 4.25% of each CCO's 2020 PMPM payments to fund the Quality Pool. Due to the COVID-19 pandemic, the withhold was suspended in April 2020 so funds could be infused into the health care system to help CCO address critical needs.
In the CCO Quality Incentive Program, bonuses are paid from two pools: Quality Pool and Challenge Pool.
Unearned Quality Pool funds are funneled into the Challenge Pool. All CCOs can earn additional funds through the Challenge Pool. To earn Challenge Pool funds, CCOs must meet benchmarks or improvement targets on a subset of incentive metrics selected by the Metrics and Scoring Committee.
With the Challenge Pool, CCOs can earn more than 100% of eligible bonus funds. All CCOs — even those that earned all their Quality Pool — can earn additional bonus money from the Challenge Pool. In all but one year of the program, the majority of CCOs earned more than 100% of their eligible bonus through the Challenge Pool.
Challenge Pool funds are distributed in equal proportions based on the number of times Challenge Pool measures are met. Regardless of CCO performance, OHA pays all CCO Quality Incentive Program funds each year to CCOs through the Challenge Pool. No bonus funds are saved or carried over to the next year. For more information, see the 2024 Quality Pool Methodology.
Oregon
requires managed care organizations (MCOs) to pay a tax to support the Oregon Health Plan. In 2024,
the MCO tax rate was 2.0%. OHA pays the tax gross back to CCOs by building the
cost of the tax into capitation rates, qualified directed payments, maternity
kick payments and Quality Incentive payments.
General Information
Release 2025.1 (published November 25, 2025)
Added data for measurement year 2024.