Oregon Hits Pause on Medicaid Redesign

The state of Oregon recently set aside a bill that would have changed how Medicaid decides what medical services it pays for. The proposal, known as House Bill 4003, was meant to update the state’s rules to match new federal requirements that force Oregon to stop using its long‑standing “prioritized list” of treatments. The list, a unique tool that ranks medical conditions and therapies based on evidence and public input, has guided coverage decisions since the 1990s. The federal agency overseeing Medicaid told Oregon it could no longer use this ranking as the legal basis for denying care. Instead, decisions must be grounded in the state’s written Medicaid plan and a definition of medical necessity. In 2022, Oregon agreed to move the prioritized list into its standard Medicaid plan and to comply with federal rules by January 1, 2027. The bill was introduced to codify that transition into state law, but it slipped through committee during a brief 35‑day legislative session. Although the deadline remains in force, the bill’s failure means the state will still need to adjust how it covers services over the next two years. For the 1. 4 million people enrolled in Oregon’s Medicaid program, this shift will affect how benefits are defined and challenged.The prioritized list has no parallel in other states. It pairs diseases with treatments, ranks them, and then draws a “funding line. ” Treatments above the line are usually covered; those below are not, unless an exception applies. Oregon also covers many optional services—like adult dental care and prescription drugs—that rank above this line. Federal officials now say the state cannot base denial decisions on that ranking and must rely on written Medicaid policies and medical necessity criteria instead. Former governor John Kitzhaber, who helped create the Oregon Health Plan, opposed the bill. He argued that the state already agreed to move the list into its Medicaid plan and that changes could be handled administratively, not legislatively. Kitzhaber also criticized the rushed timeline and warned that removing the funding‑line framework from law could cause confusion. His critique gained support, leading lawmakers to shelve the bill. What does this mean for patients? Today’s benefits stay unchanged, but in the coming years Oregon will need to spell out covered services more clearly, set limits on amounts and durations, and base denials on medical necessity. Appeals will follow federal rules, potentially giving consumers clearer guidance and more predictable processes. The state also must decide explicitly which optional benefits it will continue to cover, moving away from the old ranking system.