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Review launched of CareOregon-SCAN merger

Executives say they welcome the extended process, a first for the state, after some raised questions.
February 14, 2023

Oregon’s toughest-in-the-nation health care merger oversight program has launched its first ever comprehensive review in response to questions raised by nonprofit CareOregon’s proposed joining with The SCAN Group of California.

In December, the two entities announced plans to combine their operations into a new nonprofit called HealthRight Group, to be headquartered in Long Beach, California. Eric C. Hunter, CareOregon’s CEO and president, would remain in that role but also lead HealthRight’s new Medicaid Division.

The transaction has raised eyebrows in health care circles given CareOregon’s crucial role in three of the state’s contracted regional insurers, known as coordinated care organizations, that serve low-income members of the Oregon Health Plan. Among the questions: what will happen to the sizable reserves CareOregon has built up over the years.

Executives with both nonprofits said they welcomed the opportunity to provide more detail.

“With the combination of SCAN and CareOregon and the formation of the HealthRight Group, we look forward to demonstrating how the coming together of our organizations helps sustain and preserve nonprofit healthcare,” said Sachin Jain, the physician who serves as CEO for SCAN, in an emailed statement to The Lund Report.

“We are excited to participate in this process because we believe our partnership to form HealthRight Group will enhance CareOregon’s work for Oregonians, while allowing our CCOs to remain community based and community governed,” said Jeremiah Rigsby, chief of staff at CareOregon, in an email.

A decade ago, reforms to the Oregon Health Plan were touted as ensuring that decisions about care would be made locally. Subsequent developments — including for-profit Centene’s purchase of Trillium Health in Lane County and expansion — have sparked calls for further steps toward that end, but have not won approval from Oregon lawmakers.

Based on concerns about local decision-making and preserving CareOregon’s commitment to Oregon, a prominent member of the Oregon Health Policy Board, Dr. John Santa, submitted comments speaking only for himself urging the state to conduct a thorough study of the transaction.

Officials with SCAN, an umbrella group that includes a Medicare Advantage plan, and CareOregon have said they are committed to making sure profit margins earned in Oregon stay in Oregon, while making other improvements to serve providers, patients and the public.

Jain said SCAN intends to expand operations into Oregon that include street medicine services for people experiencing homelessness as well as offering insulin without patient copays.

CareOregon officials said they will continue to maintain a board in Oregon as well as local advisory committees affiliated with the three regional Oregon Health Plan organizations it operates and works with.

“We know that what makes the coordinated care model special is the fact that it is community based with local governance,” Rigsby said. “CareOregon has always supported efforts to bring transparency to the business transactions that impact the coordinated care model; our communities and our members should know exactly how they might be affected by new developments with their CCO, and they should have the ability to provide input on these developments.”

The merger program has sparked vigorous opposition from health systems that say it is vague and arbitrary; a lawsuit is pending.

According to the state, the newly launched review will “collect additional information about the transaction, encourage public comment, and examine the potential impacts on cost, quality, access, and equity for people in Oregon.”

Two state agencies will participate, the Oregon Health Authority and the Oregon Department of Consumer and Business Services, and hold public hearings later this year. The review is expected to take 180 days and lead to a determination issued jointly by the two agencies.

Comments will be accepted at [email protected]  as long as the review is underway; it currently is scheduled to wrap up July 11.

You can reach Nick Budnick at [email protected] or at @NickBudnick on Twitter.