The Oregon Educators Benefit Board recruited James Raussen from across the country and offered him a salary of $126,456 to revamp the statewide health plan for Oregon teachers.
In July 2015, OEBB voted to delay their work on the new contract, arguing they wished to wait until a director was hired.
But now Raussen has mysteriously resigned after a two-month personnel investigation and the state is charging ahead, claiming that Raussen wasn’t needed after all.
“The resignation of Mr. Raussen does not have any effect on the RFP process that is currently underway through the OEBB board. The OEBB board continues to be responsible for the final decisions regarding the RFP,” said Oregon Health Authority spokeswoman Courtney Crowell.
The Oregon Health Authority itself has evaded multiple opportunities to clear the air and explain the OEBB situation with the public -- saying only in the vaguest way in a press release that “Mr. Raussen was on administrative leave during an investigation by the Department of Justice for allegations of violations of state policies.
“Mr. Raussen resigned from his position before the investigation was completed. OHA has suspended its pending investigation into allegations of possible violation of state policies by Mr. Raussen, to avoid further outlay of state time and resources.”
For now, the work will fall more heavily on the shoulders of actuarial consultants Willis Towers Watson and Public Employee Benefit Board Director Kathy Loretz, who has been called in to preside over the intense work of the contract on top of her PEBB duties.
“PEBB director Kathy Loretz who has been with PEBB since 2009 will be continuing as interim director until a replacement can be found,” Crowell added. “Kathy has a keen understanding of the OEBB process and is well suited to help lead the work of OEBB. OEBB continues to move forward with their RFP process and any decisions by the OEBB board will move forward as scheduled.”
Loretz has served for a number of years as the deputy director of the Public Employee Benefits Board, where she’s now chief administrator. Two years ago, she assisted PEBB on a similar contract overhaul, which has led a growing number of public employees to choose a health plan with a coordinated care framework.
The PEBB board held their annual retreat in Wilsonville this week and Loretz wasn’t available to shed light on the situation, either. OEBB board members also have refused to speak to the press on the situation.
During the Oregon Department of Justice investigation, Raussen himself appeared in the dark about his problems with the state, according to comments he made to the Oregonian. Moda Health, which has the largest contract with OEBB, also told the newspaper it was uninformed about the details of the investigation.
The state’s botched hire of Raussen came after the Oregon Health Authority failed to do a thorough background check on him last November.
The Lund Report unearthed a trail of bad press about Raussen before his approval, spurring the OEBB board to schedule a special meeting to discuss the new material before deciding to hire him anyway. He lasted barely half a year before the suspension in September.
Raussen’s former boss at the Chicago Comptroller’s Office, Amer Ahmad, sits in prison on a bribery conviction stemming from when they both worked for the state of Ohio. Raussen was not involved in the Ohio corruption, but an independent audit of the comptroller’s office did find that Raussen had steered contracts at the Chicago airports to a Cincinnati firm that had financially supported Raussen’s political campaigns while he served as a state representative in Ohio.
The airport work raised eyebrows but he was cleared of wrongdoing in that matter as well.
Less than a year later, Raussen is gone. And meanwhile a healthcare plan insuring 150,000 people that was worth $720 million in the last fiscal year hangs in the balance as OEBB carries on with the major contract overhaul without a full-time leader.
