Oregon Hits Pause on Medicaid Redesign

Oregon has set aside a bill that would have updated how Medicaid decides what medical services it pays for.
House Bill 4003 was intended to align state rules with federal requirements that prohibit using the long‑standing “prioritized list” of treatments as a legal basis for denying care.

The Prioritized List Explained

• Unique to Oregon – no other state uses a similar system.
• How it works: diseases and therapies are ranked; those above the “funding line” are typically covered, while those below are not unless an exception applies.
• Optional services (e.g., adult dental care, prescription drugs) are also included above the line.

Why the Bill Fell Short

• Federal mandate: Oregon must stop using the list as a legal basis for denial; decisions must now rely on the written Medicaid plan and medical‑necessity criteria.
• 2022 agreement: Oregon pledged to embed the list in its standard Medicaid plan and comply with federal rules by January 1, 2027.
• Legislative outcome: The bill failed to pass during a brief 35‑day session, but the deadline remains. Oregon will need to adjust coverage over the next two years.

Bottom Line

Oregon’s Medicaid program will transition from a unique, evidence‑based ranking system to a more standardized approach grounded in written policy and medical necessity. While the change is delayed, it will ultimately reshape how benefits are defined, challenged, and appealed for the 1.4 million people enrolled in Oregon’s Medicaid program.