Oregon lawmakers are advancing a sweeping health care overhaul that would reshape nearly every corner of the system — from hospital billing and insurance coverage rules to who can provide psychedelic mushroom therapy.
House Bill 4040, spearheaded by Rep. Rob Nosse, D-Portland, is an omnibus measure that bundles over a dozen behind-the-scenes changes to Oregon health law.
The House Committee on Health Care voted 8-0 Thursday to advance the bill. Because it carries a financial impact, it must also go to the Ways and Means Committee, where budget writers will decide whether the state can afford its provisions.
Nosse described the bill as a cleanup effort, a series of targeted fixes meant to address everyday breakdowns that cost patients time, money and access to care.
Here’s what it would mean for Oregonians.
Help for big hospital bills would start at higher threshold
One of the more controversial parts of HB 4040 would raise the dollar amount that requires hospitals to automatically check whether a patient qualifies for charity care.
Under current law, hospitals must screen patients who are uninsured, on Medicaid or who owe more than $500 from a single hospital visit. HB 4040 would increase that threshold to $1,500.
Hospitals would still have to notify patients of the results, allow appeals and pause collections during an appeal. If a patient later qualifies after paying, the hospital would have to issue a refund.
Patient advocates argue the change would weaken a law passed in 2023 that significantly reduced medical debt.
Adam Zarrin, director of state government affairs for the West region of Blood Cancer United, said $500 is more than many families can afford and that one in three Oregonians already can’t afford a $400 emergency bill. The nonprofit funds blood cancer research and advocates for affordable care.
“In practice, that means many low-income patients would no longer qualify for charity care unless they rack up significantly higher bills first,” Zarrin wrote in an email to The Oregonian/OregonLive.
He said the timing is concerning as some Oregonians are expected to lose Medicaid coverage under federal policy changes or face higher health insurance costs through the Affordable Care Act marketplace as enhanced subsidies expire.
Hospitals support the change.
Jennifer Burrows, CEO of Providence Health & Services Oregon, said in written testimony that the $500 threshold relies on third-party screening tools that do not always accurately reflect a patient’s income or household size. She said raising the threshold would reduce errors and administrative burden while preserving access for those who qualify.
Eli Rushbanks, director of policy at Dollar For, a nonprofit that helps patients apply for charity care, argued that state data shows charity care increased, bad debt decreased by nearly the same amount and hospital revenue continued to rise after automatic screening took effect in 2024.
Raising the threshold, he said, would push more patients into collections without improving hospital finances.
Medicaid coverage when people leave jail
The weeks after someone leaves jail or prison can be some of the most unstable — especially for people who rely on medications, mental health treatment or addiction services.
HB 4040 would allow the Oregon Health Authority to enroll eligible people in Medicaid before they are released, so their coverage can start the day they return to the community.
Lawmakers said the goal is to prevent gaps in care during reentry, when interruptions in treatment can lead to emergency room visits, relapse or other setbacks.
No more anesthesia time caps
HB 4040 would bar commercial health insurers from denying payment for medically necessary anesthesia simply because a procedure lasts longer than a preset time limit. The protection would take effect Jan. 1, 2027.
Supporters, including the Oregon Society of Anesthesiologists and the Oregon Association of Nurse Anesthetists, said the proposal comes after Anthem Blue Cross Blue Shield announced in 2024 that it planned to cap anesthesia reimbursement based on fixed time thresholds in some states — a move that drew sharp criticism from physicians and was later reversed. They said the issue exposed a gap in state law.
Sabrina Riggs, who testified on behalf of the organizations, told lawmakers that anesthesiologists cannot control how long a procedure takes. She warned that tying payment to arbitrary time limits could leave providers unpaid for medically necessary care and create pressure to rush complex cases.
Stronger protections for dentists
HB 4040 would require dental insurers to pay or deny a claim within 45 days and set clear rules for when insurers can clawback payments from dentists.
Supporters said the changes would reduce billing disputes and create more predictable payments.
Brett Hamilton, who testified on behalf of the Oregon Dental Association, told lawmakers that delayed insurance payments can make it difficult for dental offices to meet payroll and cover operating costs. He said the bill would align dental insurance rules more closely with medical insurance standards and put Oregon in line with 46 other states that have adopted dental prompt-pay laws.
Broader coverage for prosthetic and orthotic devices
The bill would strengthen existing state law requiring insurers to cover medically necessary prosthetics and orthotics.
HB 4040 would require insurers to cover repairs and replacements. They cannot deny a prosthetic or orthotic benefit if they would cover a comparable medical or surgical intervention for someone without limb loss.
Advocates said that closes longstanding gaps in coverage for advanced devices that allow people to work, exercise and live more independently.
Psilocybin training and licensing
HB 4040 would expand who can provide psilocybin services in Oregon and make it easier for some out-of-state providers to get licensed.
The bill would allow physical and occupational therapists to provide psychedelic mushrooms as part of their work.
It also would let people who completed approved psilocybin training in another state to use that education to qualify in Oregon, as long as the Oregon Health Authority determines the program meets or exceeds state standards.
Parents as paid caregivers
For families caring for minor children with significant disabilities, the bill would allow a parent to work as either a direct support professional or a personal support worker.
Right now, Oregon parent caregivers can only get paid as direct support professionals, which involves going through an agency.
Shasta Kearns-Moore testified that allowing parents to serve as paid personal support workers would help address caregiver shortages, ensure children receive consistent care and recognize labor parents are already performing.
But opponents, such as the Oregon Developmental Disabilities Coalition, argue that allowing parents of children with significant disabilities to be paid as personal support workers would reduce oversight and remove important checks and balances that agencies provide. They say the current agency structure matters, because agencies provide oversight, training and backup support.
Lawmakers removed an earlier proposal that would have required pay parity between certain caregiver roles.
Injured workers could stay with the same provider longer
The measure would allow nurse practitioners and physician associates to continue treating workers’ compensation patients beyond 180 days without referring them to an attending physician.
Amanda Sullivan-Astor, who testified in support of this provision on behalf of the Associated Oregon Loggers Inc., said this change would modernize Oregon’s workers’ compensation laws to reflect how care is actually delivered today, especially in rural areas where physician associates and nurse practitioners often serve as the primary health care providers.
According to Sullivan-Astor, injured workers in rural communities frequently struggle to access an attending physician quickly. When that happens, she said, the system sees longer wait times, delayed treatment, increased time off work, more travel and higher claim costs — impacts that affect workers, families and small employers alike.