Legislation (known as the Oregon Health Plan or OHP) was enacted in 1989 that called for an expansion of the Medicaid program to individuals and families up to 100% of the federal poverty level (FPL) and directed the legislature use a prioritized list of health services to determine the benefits available to Oregon's Medicaid clients. The Oregon State Legislature created the Oregon Health Services Commission (HSC) in Senate Bill 27 (1989) to "report to the Governor and legislature…a list of health services that are ranked by priority according to the comparative benefits of each health service." Oregon was granted an 1115 Medicaid waiver on March 19, 1993 by the Department of Health and Human Services (DHHS) to use the Prioritized List to determine the coverage of physical health and dental services beginning on February 1, 1994 and mental health and chemical dependency services as of January 1, 1995.
On January 1, 2012 the HSC was abolished and the maintenance of the prioritization of health services was transferred to the Health Evidence Review Commission (HERC). The HERC consists of 13 Governor-appointed and senate-confirmed volunteer members including six physicians (one of whom must be a doctor of osteopathy), a dentist, a public health nurse, a behavioral health representative, a provider of complementary and alternative medicine, a retail pharmacist and two consumer representatives.
The current Prioritized List contains 660 line items consisting of condition-treatment pairs, of which the services on lines 1-469 are covered for OHP Plus clients, with some vision and dental services subject to exclusion for adults age 21 and over. Over the years, the "expansion population" (individuals who have gained coverage due to the demonstration) has seen a high of 120,000 in 1995 to a low of 18,000 in 2008. The Oregon Health Plan was further expanded to all individuals and families up to 138% FPL beginning January 1, 2014 under the Affordable Care Act.
The list uses ICD-10-CM diagnosis codes and CPT and HCPCS procedure codes to define the condition-treatment pairs that make up each line. The methodology used to prioritize health services places a high emphasis on preventive services and chronic disease management in the recognition that the utilization of these services can lead to a reduction in more expensive and often less effective treatments provided in the crisis stages of disease. The ranking of health services reflects the best unbiased information on clinical effectiveness and cost-effectiveness available and the values of Oregonians.
There have been four sets of community meetings conducted in all regions of the state to obtain public input into the prioritization process over the years. All meetings of HERC and its subcommittees and advisory panels are open to the public. HERC conducts a complete review of the Prioritized List every two years, and makes interim modifications to account for new medical codes, correct technical errors, and reflect medical advancements twice a year. The list is submitted to the legislature for funding consideration in determining the benefits covered for the following biennium (although an agreement with DHHS under the current waiver extension does not allow a movement in the funding line that will reduce service coverage).
Diagnostic services needed to establish a diagnosis are covered regardless of where the ultimate diagnosis appears on the Prioritized List. Once the diagnosis is determined, coverage of further treatment is reimbursed if the service appears in the funded region of the list for that condition. Ancillary and supportive services integral to an intervention's success, such as prescription drugs and durable medical equipment, are also covered for funded conditions, even though codes that represent them do not appear on the list.
The top 12 lines of the list include maternity & newborn care, preventive services recommended by the US Preventive Services Task Force, alcohol & drug treatment, tobacco cessation, contraception & sterilization, and treatments for major depression, type 1 diabetes, asthma and HIV/AIDS. Other services covered include palliative & comfort care, preventive and restorative dental services, hearing aids, dialysis, chemotherapy for treatable cancers, and treatments for glaucoma, ADHD, high blood pressure, and rheumatoid arthritis. Services not covered include follow-up visits for most viral illnesses, routine foot care for those not at high risk for ulceration/amputation, infertility treatments, removal of asymptomatic gallstones, repair of uncomplicated hernias in adults, elective dental services, removal of benign skin lesions, and medications for hay fever. Guidelines are associated with some services on the list to distinguish when service coverage is limited to subpopulations with a condition who are likelier to gain a greater benefit from the treatment or when prioritization of a service depends on the severity of the disease it is being used to treat.