Oregon hospital group may appeal US judge’s ruling upholding state Health Care Market Oversight Program

SALEM, Ore. (KTVZ) -- A U.S. District Court judge ruled Thursday that a state law creating the Health Care Market Oversight Program does not violate the Due Process Clause of the U.S. Constitution. The Hospital Association of Oregon, which brought the lawsuit, said Friday it's considering an appeal to the U.S. Ninth Circuit Court of Appeals.

The Oregon Legislature passed HB 2362 in 2021 to create the Health Care Market Oversight Program, which gives the Oregon Health Authority significant power to oversee transactions involving health care entities, and aims to promote transparency, support statewide priorities, and monitor impacts. But since its passage, HAO claims, there have been concerns about the law’s negative impacts.

“Proponents of this law said it would improve health equity and protect access to care, which we wholeheartedly support. However, the law fails to accomplish those objectives,” said President and CEO Becky Hultberg. “Instead, we have an agency that has been given too much power, and it has created costly and onerous processes that have proven both arbitrary and unpredictable.”

The hospital association challenged the law on two grounds: First, it claims the law’s open-ended and vague wording violates the Due Process Clause of the U.S. Constitution, because it imposes costs and penalties without fair notice or defined standards. And second, it claims the law violates the Oregon Constitution, because it delegates legislative power to a state agency, OHA.

While the federal court ruled the law doesn’t violate the Due Process Clause of the U.S. Constitution, HAO noted that it declined jurisdiction over the state constitutional claim and did not consider it on its merits.

“Rather than protect Oregonians, this law may be harming them,” Hultberg said. “It has created an environment where health care arrangements serving the public may be hindered, while allowing arrangements detrimental to the public to proceed. We continue to be worried about the impact this law will have on access to health care services, especially for the most vulnerable people in our state.”