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Dr. Sejal Hathi started work Jan. 16 as Gov. Tina Kotek’s pick for director of the Oregon Health Authority, but by her own choice, she will sit out one of the biggest policy questions now facing OHA.
The question: whether to approve a pending merger between Portland-based CareOregon, which serves 500,000 Medicaid patients in the metro area, and SCAN Group, a Long Beach, Calif., Medicaid insurer that serves 285,000 patients.
The two insurers, both of which are organized as nonprofits, announced their intention to merge more than a year ago.
On Dec. 6, however, OHA’s Medicaid Advisory Committee released a memo saying that, based on the information the merger partners have provided so far, the health authority should “disapprove the SCAN/CareOregon transaction.” Among other concerns, the commission cited the potential loss of local control as a reason Oregonians should be wary.
“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 CCO program,” the committee wrote. (CareOregon focuses Medicaid, which serves low-income Oregonians through the Oregon Health Plan. SCAN Group focuses on Medicare, which serves seniors.)
Hathi comes to Oregon from New Jersey, where she served as deputy health commissioner. Before that, the Yale- and Stanford-educated physician served as the White House’s senior policy adviser for public health.
The week before Hathi started work in Oregon, she wrote to the Oregon Government Ethics Commission both to notify the agency of a potential conflict of interest and to seek advice on whether she needed to take further steps.
“I have notified the governor’s counsel and my team of my intent to refrain from any involvement in or decision-making with respect to the SCAN Group-CareOregon merger, currently under review with OHA,” Hathi wrote. “I take this action in an abundance of caution, given my long-standing personal friendship with the CEO [Dr. Sachin Jain] of SCAN Group, to ensure that the applicants and the public have full confidence in OHA as a neutral decision-maker.”
In a Jan. 18 response, ethics commission director Ron Bersin told Hathi that since she has no financial stake in the merger, ethics laws would not require her recusal, although she was free to make that decision. (The Lund Report first reported Hathi’s recusal)
“Based on the information provided, it does not appear that you would be met with either an actual or potential conflict of interest with regard to the SCAN Group-CareOregon merger,” Bersin wrote. “While you may choose to refrain from participation in the matter, the government ethics laws in Oregon Revised Statutes Chapter 244 do not require you to do so.”
Hathi’s recusal will add a layer of complexity to a transaction that industry insiders are watching closely.
The Oregon Senate Rules committee will confirm the appointment of Hathi and others Kotek has recently named to various positions when the Legislature begins its 35-day session next month.