SCAN Group, CareOregon scuttle merger plans

A little over a year after announcing their plans to merge, SCAN Group and CareOregon are calling it quits.

The two insurers have "mutually agreed" to end the talks to combine amid concerns from regulators in the Beaver State and other stakeholders about the implications of the combination, they confirmed in a joint statement to Fierce Healthcare.

"SCAN and CareOregon share a commitment to preserving and protecting nonprofit, locally based healthcare and that has always been our goal in combining under the HealthRight Group," th two payers said. "Our intent in coming together was to support Oregon’s healthcare 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," they said.

The deal was first announced in late December 2022, and the combined payer organization intended to operate as HealthRight Group under SCAN CEO Sachin Jain's leadership. The two intended to continue using their existing brands in the markets they serve

CareOregon CEO Eric Hunter would have maintained that title and led HealthRight's Medicaid segment. The combined organization would have represented about $6.8 billion in revenue.

The merger was initially expected to close in 2023, but it faced significant scrutiny from Oregon regulators. The state's Medicaid Advisory Committee, for example, recommended (PDF) in December 2023 that the Oregon Health Authority "disapprove" the merger over multiple concerns, including "the flow of taxpayer dollars leaving the state" and "a loss of local control" in Medicaid, as SCAN is based in California.

The OHA was set to render a decision on the matter next month.