The Medicare Advantage organizations SCAN Group and CareOregon will not complete their plans to merge amid questions from state regulatory agencies.
The two nonprofits announced their intent to combine last year and form a new entity that would have been known as the HealthRight Group, which would encompass SCAN’s Medicare portfolio with CareOregon’s predominantly Medicaid health plans.
In a joint statement, SCAN and CareOregon cited concerns about regulatory approvals as an impetus for canceling the combination.
“SCAN and CareOregon share a commitment to preserving and protecting nonprofit, locally based health care and that has always been our goal in combining under the HealthRight Group,” the statement indicated. “Our intent in coming together was to support Oregon’s health care system and the people that CareOregon serves. However, despite our efforts, there are still questions about our combination. As a result, SCAN Group and CareOregon have mutually agreed to withdraw our applications with the Oregon regulatory agencies and to terminate our affiliation agreement.”
The Oregon Medicaid Advisory Committee (MAC) raised questions about the proposed business combination in a Dec. 2023 memorandum.
Among their queries, MAC sought information on how the merger could affect performance on quality metrics as well as access to care for Oregon’s Medicaid beneficiaries. Other questions included some related to CareOregon’s compliance with requirements to maintain reserves of at least six times its risk-based capital.
The oversight agency also requested more details on how the combined organization would have impacted health equity within the state of Oregon.
In addition, the committee voiced concerns about potential loss of local control of a major Oregon Medicaid organization were it to transer ownership to California-based SCAN.
“The flow of taxpayer dollars to an out-of-state entity raises concerns about a potential loss of community control and knowledge driving health care innovation and service delivery, one of the hallmarks of Oregon’s [Care Coordination Organization (CCO)] program,” the MAC memorandum stated.
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