OEBB Chairwoman Wants to Share a Director with PEBB

James Raussen, the director in charge of the teachers health plan washed out after just eight months amid allegations of ethical misconduct and offensive remarks to and about staff members. Nancy MacMorris-Adix, the chair of the Oregon Educators Benefit Board, would like to return to the old system where her organization shared an administrative director with the health plan for state employees.

The Oregon Educators Benefit Board chairwoman wants her organization to return to the days when it shared a director with the Public Employees Benefit Board, rather than search for a new OEBB-only leader, in the wake of the director’s departure this fall amid alleged ethical lapses.

Chairwoman Nancy MacMorris-Adix said she’d like to see PEBB Director Kathy Loretz take on the role and responsibility of running both agencies permanently, much as former joint administrator Joan Kapowich did until 2013.

OEBB had a series of acting directors until James Raussen was hired to be the permanent director last December. Loretz has served as the acting director of OEBB since September, when Raussen was suspended amid an ethics investigation by the Oregon Department of Justice.

Loretz said that OEBB and PEBB already share personnel at their Salem offices, even if the two have their own distinct cultures and statutorily created boards. “I would see more of a blending of staff,” she explained. “Finance and contracts [divisions] have melded and are working together really well.”

Under the Kapowich administration, Loretz served as her deputy director at PEBB while Denise Hall was the deputy director of OEBB. Loretz said that she may ask for two deputy directors or just one deputy to serve both health insurance boards.

“This would be a perfect time to see what PEBB needs and what OEBB needs and what works and whether the old system worked,” said Loretz.

OEBB provides health insurance for Oregon’s school districts and a handful of local governments, particularly in southern Oregon. PEBB covers state and university employees. Each has one of the largest state health contracts in the state, which leading health insurers compete rigorously to administer.

OEBB recently underwent a major insurance contract overall and bidding process. Loretz told The Lund Report that the winning contract will be announced Jan. 3. Moda Health and Kaiser Permanente submitted leading bids to keep their business with OEBB, but face competition from Providence, Regence and UnitedHealthCare.

The OEBB board only has hiring authority over its chief director; the Oregon Health Authority would be tasked with hiring any deputy directors or other support staff for Loretz.

“OHA did not bring this suggestion to me. I went to OHA and asked if this is an acceptable idea,  and they said, ‘Yes,’” explained MacMorris-Adix. In addition to her work as chairwoman, MacMorris-Adix is a certified nurse midwife and an elected member of the Salem-Keizer School Board, and she represents school districts on the OEBB board.

The other board members said they would mull her recommendation over the holidays. A decision is expected in January or February. “We’re given a chance to press pause and really examine the needs of the organization,” said Heather Cordie, superintendent of the Sherwood School District.

J.J. Scofield, who represents local governments, said he wanted to know about the cost difference for the structure with a shared director versus a stand-alone director, and the level of communication between the two health plans and their boards.

Raussen Rap Sheet

Raussen resigned last month after what appeared to be minor but obnoxious indiscretions that ran afoul of a state ban on gifts to public officials of greater than $50.

Public documents released to The Oregonian alleged Raussen had broken a number of ethical rules regarding the acceptance of gifts, including expensive meals from insurance companies that do business with OEBB. He also allegedly joined Moda Health officials in their box suite for a Portland Trail Blazers basketball game without paying, although he later provided evidence that he made at least a partiall payment for those tickets.

The unfinished report said the Blazers’ tickets violation would be particularly egregious because Raussen got in trouble for accepting free Cincinnati Bengals football tickets as a state representative in Ohio and was ordered to repay $644 and attend ethics training.

Raussen had come into Oregon under an ethical cloud, after The Lund Report reported he had been investigated at the Chicago Comptroller’s office for routing business to an old political supporter from Ohio -- news that OEBB had been unaware of prior to the article. The OEBB board chose to hire him anyway.

In the recent Department of Justice preliminary report, he was also slammed for making offensive remarks, allegedly referring to OEBB staff members as “mongoloids” while at dinner with actuarial consultants from Willis Towers Watson, and telling an off-color joke to a staff member saying that he “could not tell the difference between Lesbian women and straight women in Oregon, because none of them wear makeup or perfume.”

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