QuickTake:
Insight Northwest Recovery is facing faces challenges in collecting Medicaid payments from PacificSource. The Eugene provider says the system calls into question the state’s claim that Medicaid services will be uninterrupted.
Insight Northwest Recovery offers a lifeline to youth and adults facing crises — sometimes a combination of mental health and drug addiction challenges simultaneously.
The provider’s suite of offices and therapy rooms in Eugene offers intense outpatient treatment, with sessions that last several hours. The clinic, which also has a Salem location, works to keep patients on the path to recovery in a state notorious for its lack of access to care and a shortage of residential beds for behavioral health care.
Insight Northwest Recovery now is in a bureaucratic battle with PacificSource, a Lane County Medicaid insurer until recently. Insight is seeking to recoup more than $100,000 of Medicaid claims for dozens of patients that PacificSource rejected in the final two months of 2025.
“They intentionally put us in this situation where they made it difficult for clients to receive care,” Josh Gotlib, executive director of Insight Northwest Recovery, said in an interview.
Lookout Eugene-Springfield emailed PacificSource with a summary of Insight Northwest Recovery’s account and offered the Springfield-based company a chance to answer questions or dispute details. A PacificSource spokesperson declined to comment or answer any questions, including what spurred the changes or if it’s part of a larger change that PacificSource is making in how it processes claims.
Gotlib also has contacted the Oregon Health Authority for assistance. The authority, a state agency, oversees Medicaid, which provides health care, dental and behavioral health coverage for low- and moderate-income people in the state. The health authority contracts with insurers, also called coordinated care organizations, that provide coverage through networks of providers.
An Oregon Health Authority spokesperson was unable to answer any questions about the issue Thursday or Friday.
But records obtained by Lookout show Gotlib contacted the health authority Dec. 10, 2025, urgently asking for help to correct the issue and recoup its claims. More than three months later, the provider is still waiting for answers.
Problems start in November
Insight Northwest Recovery opened its doors two years ago and provides intensive outpatient mental health and addiction treatment to people 12 and older. Sessions include one-on-one therapy and group activities. Since its start, the provider has served about 400 people.
The provider’s relationship and work with PacificSource went smoothly until November 2025. At that point, 80% of its clients were PacificSource members.
“We were just in a rhythm of sending in claims every week,” Gotlib said.
But beginning the second week of November, denials started to pour in, saying that a prior authorization was necessary — even for current patients who already had received care, Gotlib said.
At the same time, the system had no mechanism before November that would have allowed Insight Northwest Recovery to submit an authorization prior to providing care, Gotlib said.
“It’s this catch-22,” he said. “There was no way for us to avoid it.”
Gotlib said the provider reached out to multiple people at PacificSource to resolve the issue, to no avail.
The provider got authorizations for future care for its patients in the weeks that followed. But that also meant patients had a delay in care while waiting for PacificSource to approve it.
“At the end of the day, we provided services for free and then some people had to pause until we got authorization in order to continue providing care,” Gotlib said. “So most people had a gap in services.”
While the care is continuing, the provider is still waiting for payment from PacificSource.
Based on patient information provided, Gotlib said he believes that PacificSource did not follow a federal law that requires it to provide patients with a 10-day notice when a plan changes. PacificSource, asked if it followed that law, did not answer a question from Lookout.
Wider Medicaid transition underway
The provider’s challenges come in the wake of PacificSource’s decision to stop providing Medicaid services to Lane County residents. In the last few months, the Oregon Health Authority has worked on a plan to transition about 96,000 PacificSource Medicaid patients to a coordinated care organization run by Trillium, which served just 30,000 people in the county before the transition.
In an interview, Gotlib stressed Insight Northwest Recovery’s problems are with PacificSource and not related to Trillium.
In a Dec. 10 letter to the health authority, Gotlib pressed the agency on its promise that people would not experience disruptions in care in the transition noting that PacificSource’s denials of authorizations for patients already in treatment is “placing them at immediate risk and directly disrupting active care plans.”
“This is occurring despite repeated clarification over the past several months that Medicaid changes in Lane County would not impact continuity of care for existing clients,” Gotlib said in the letter. “We have been consistently told that clients already in treatment would be protected from abrupt or arbitrary authorization changes. That is not what we are experiencing on the ground.”
Gotlib told the agency the situation affects a vulnerable population and is not simply an administrative inconvenience.
“Our programs serve youth and adults who are often entering treatment in acute crisis: suicidal, recently hospitalized, experiencing severe co-occurring disorders, or unable to maintain safety without structured, intensive behavioral health support,” he said in the letter. “When insurers retroactively alter authorization requirements and deny services mid-episode, clients lose essential treatment hours, experience destabilization, and are forced into gaps in care that put their safety at risk.”
He asked for three things from the health authority:
Immediate clarification from the authority about the expectation that Medicaid insurers honor continuity of care for patients already receiving behavioral health treatment.
Immediate direction to PacificSource to cease denials that “retroactively impact existing cases.”
Assurance that future policy changes will not override clinical decisions, especially for high-risk youth and adults.
“These authorization denials are not administrative inconveniences — they are creating real danger for real people,” he wrote in the letter. “They threaten the stability of individuals who often come to us with nowhere else to go. When intensive services are withdrawn mid-care, we are left managing preventable crises that put clients, families, clinicians, and systems at risk.”
Dec. 10, Chelsea Holcomb, the authority’s child, family and lifespan services director, responded: “Thank you Josh for elevating this concern. I will get this to our CCO Compliance team this morning.”
It’s unclear what actions since then, if any, that the agency’s compliance team has taken in the last three months. An authority spokesperson was unable to provide any information and Gotlib is still waiting for answers.
“They said they were forwarding on to some other department, and we never heard from that department,” Gotlib said.
Other PacificSource problems
PacificSource’s issue with the providers comes amid a wider backdrop of financial challenges.
In September 2025, the health authority set PacificSource’s Lane County payment at $582.05 per member per month, a nearly 13% increase from the prior year. But PacificSource leaders maintained that was not enough to cover costs when they announced plans to pull out of Medicaid coverage in Lane County.
In October 2025, PacificSource confirmed it is laying off 325 employees, with the bulk of the layoffs tied to the provider’s exit from offering Medicaid to Lane County residents. But in addition to Springfield, layoffs affected staff in Salem, Portland, Medford and Bend.
The insurer continues to provide Medicaid coverage in other parts of Oregon.