Updated June 5, 2024

Policy and Regulatory Update Call Invite

OPCA’s Policy Team is inviting you to join them as they kick off OPCA’s Policy and Advocacy Update Call where they will provide monthly updates on important policy and regulatory issues that matter to health centers.

Attendees will have direct access to federal and state-level policy and regulatory updates from OPCA staff and national experts.

When: Every second Wednesday of the month at 12:00 PM Pacific Time (US and Canada)

Register in advance for this meeting.

After registering, you will receive a confirmation email (check spam/junk) containing information about adding the calendar invite and joining the meeting

State Update

May Legislative Days

Kicking off the slate of May Legislative Days last week was Oregon’s second revenue forecast of the year. These quarterly presentations by state economists help legislators keep an eye on resources available to fulfill expenditures planned within the current budget. They also offer a peek behind the curtain about funding predicted to be available for Governor Kotek and her team as they continue the process of developing the 2025-26 Governor’s Recommended Budget.

Last week’s hearing was Mark McMullen’s final presentation as a state economist (it was his 55th!). We’ve all grown used to him as one half of the dynamic duo with Josh Lehner, but McMullen announced last month he will resign on June 1 to join a research firm. He is the longest-serving state economist in Oregon history, according to OPB.

Similar to the last few presentations, the broader state economy seems to remain stable, and this is the sixteenth consecutive forecast with increased revenues.

Economic outlook

During the last forecast, McMullen and Lehner noted that most economic indicators are healthy, calling Oregon’s economic outlook “still pretty stable.” Our median household income is higher than the average American household, and our average wage is as high as it’s ever been. McMullen and Lehner reiterated that Oregon’s economy (and the larger U.S. economy) is tracking in line with a “soft landing” scenario as we continue to recover from the pandemic, instead of a more severe recession.

Our economists are also keeping a close eye on inflation. They showed data indicating that inflation is getting better for the most part, with consumer spending trending up even after adjusting for inflation. However, the Federal Reserve likes to see multiple quarters with these trends before it lowers interest rates. McMullen indicated the earliest we would see a rate cut would be in December, stating, “While we’re on the right path, we aren’t there yet.”

One factor that has an outsized impact on Oregon’s economy is migration. Throughout our state’s history, migration has been the largest single factor contributing to economic growth. Oregon’s population growth forecast was unchanged from last time, with economists predicting an average annual increase of 0.6% during the next several years. It remains to be seen if this will lead to a slower pace of economic growth.

Revenue forecast

We have a kicker! Personal income tax withholdings have surpassed the 2% kicker threshold over what was forecasted at the end of the legislative session. This means we could get a personal kicker in 2025 of $582 million. This could adjust up or down before it is finalized, and with another tax season yet to go, McMullen pointed out the potential for it to go away entirely.

Another area with growing revenues is within the General Fund. Because interest rates have not yet come down, General Fund interest earnings have increased $100 million from the last forecast, which is far more than typical.

Vice taxes continue to lag behind other revenue sources. Our economists have adjusted the marijuana tax revenue forecast down, given a trend in higher usage but flat sales. Oregon has record low prices for cannabis due to a large amount of supply and relatively low demand. Until the supply and demand balance out, the tax revenue won’t increase.

The bottom line: General Fund for the 2023-25 biennium is up $1.1 billion from the close of session (4.3%)

  • Lottery resourcesfor the 2023-25 biennium are up $15.8 million from the close of session (0.82%)
  • Personal income tax revenueis up $547 million (2.6%) from the close of session estimate
  • Personal kicker projection of $582.2 million is projected for 2025
  • Corporate tax revenue is projected to be $588 million, which will be part of a 2025 kicker, dedicated to K-12 education spending in the next biennium

Capitol Hill

Key House committee held 340B hearing: The House Energy and Commerce Committee’s Oversight and Investigation Subcommittee held a hearing yesterday titled, “Oversight of the 340B Drug Pricing Program.” Health centers were represented by Sue Veer, from Carolina Health Center who testified about the need to reform 340B.

NACHC releases 340B ACCESS Act: Tuesday last week, NACHC’s ASAP 340B legislation was introduced by U.S. Representatives Larry Bucshon, MD (R-IN-08), Buddy Carter (R-GA-01), and Diana Harshbarger (R-TN-01). The 340B Affording Care for Communities and Ensuring a Strong Safety-Net Act (340B ACCESS Act) represents NACHC’s two-year negation with PhRMA to forge a pathway to 340B reform.

NACHC along with Advocates for Community Health (ACH) have done a tremendous job raising awareness about 340B on Capitol Hill and among national partners. At OPCA we are monitoring this latest development in addition to the bipartisan SUSTAIN 340B Act in the Senate and ACH’s 340C proposal.

Telehealth legislation advances: Both the House Ways and Means Committee and the House Energy & Commerce Health Subcommittee recently passed a two-year extension of Medicare telehealth payment policies. The two bills were two-year extensions of current policies, but the House Energy & Commerce Health Subcommittee did deviate from Ways and Means by ensuring that Medicare reimburses telehealth visits at the same rate as in-person visits. This payment parity language, along with the rest of the extensions, passed the subcommittee by a 21-0 bipartisan vote.

Why it matters: It brings the telehealth package a step closer to a floor vote this summer and a possible year-end health deal.

  • The House Ways and Means Committee advanced its telehealth bill last week in a unanimous bipartisan vote.
  • The E&C bill, still needs to be taken up by the full E&C committee.

What’s inside: The E&C package would extend virtual care flexibilities that date to the pandemic and remove geographic requirements while expanding originating sites.

  • It would expand the number of practitioners who can furnish virtual care while retaining flexibilities for federally qualified health centers and rural health clinics.
  • It also delays an in-person requirement before Medicare beneficiaries can access behavioral health services.
  • The E&C health panel also extended for five years a Medicare hospital-at-home program for acute services.