New Cover Oregon executive director to make $215,000, with less oversight

New Cover Oregon executive director to make $215,000, with less oversight »Play Video
Cover Oregon director Aaron Patnode

SALEM, Ore. - Aaron Patnode, a Kaiser Permanente official, will start at Cover Oregon next week.  According to his contract, which the On Your Side Investigators obtained, Patnode is eligible to receive incentive pay of $32,250 if he meets “performance metrics” determined by the Board. The Board has until October to decide those metrics.

The Cover Oregon board unanimously voted to hire Patnode last month, sealing his fate as the fourth executive director at the organization in a matter of months.

Patnode takes over an organization under immense scrutiny and turbulence. Cover Oregon scrapped its botched health insurance exchange – which the agency and the state sunk a combined $250 million dollars in – in favor of the federal exchange website, healthcare.gov.

So what will be Patnode’s specific job duties?

According to Cover Oregon's spokeswoman, Ariane Holm, "Aaron’s responsibility will be to manage the organization to execute its mission; to serve current and new customers, now and during the coming open enrollment period; and, to work with the Board and the Legislature."

The On Your Side Investigators learned about some of the tasks Patnode will oversee, from an email a member of the Senate Republican office sent to Cover Oregon interim executive director Clyde Hamstreet.

Matt Friesen, a policy analyst for the Senate Republican Office emailed Hamstreet last month saying. 

“I’m unclear on why a new Executive Director is being recommended to the Board?" the email read. "Isn’t this putting the cart before the horse and making the assumption Cover Oregon will continue to exist? Otherwise, why would someone (like Patnode) be willing to quit a high level job to take this position?”

Hamstreet responded to Friesen’s email this month.

“As you know the Board has hired Aaron Patnode as executive director after an open recruitment. …While we continue providing restructuring and management services it makes sense for the permanent director to come on board as the restructuring is being accomplished and become the organizations leader as the changes go forward.  While what Cover Oregon looks like or is in 2015 is yet to be determined what is clear  is that a significant amount of work remains for 2014 as it completes the transition of technology to allow enrollment of both current and new customers for 2015, helping existing customers who have a change in circumstances, as well as assisting in processing redeterminations, payment of monthly  commissions to more than 600 agents updating customer data and providing other information to 15 insurance carriers and taking care of normal business such as paying bills, issuing financial reports and responding to various inquiries.”   

A grand jury is investigating Oregon's exchange, as is the federal Government Accountability Office (GAO) and the inspector general of the U.S. Department of Health and Human Services.

Amidst all that turbulence, the On Your Side Investigators learned that the Legislative Oversight Committee, which was tasked with providing oversight of Cover Oregon, no longer exists.

Representative Jim Thompson, R-Dalles, told KATU he was not aware of the Board’s decision to hire Patnode.

“And I presume no else on the committee was,” Thompson said. “We didn't meet to discuss that. We haven't met for several months."

April was the last time the committee met, according to Cover Oregon’s spokeswoman Ariane Holm.

The bill that created the state's health insurance exchange in 2011 dictated that the committee was supposed to give "advice" and oversight, but Thompson said the committee didn’t have the authority to do that. He said the bill lacked teeth.

“It didn't take long to figure out that wasn't going to happen,” Thompson said. “We were gaining information after the fact and when we asked forward-looking questions, the answer was always, 'We don't know, we're not there yet.'"

Thompson said he didn’t receive any formal notice that the committee disbanded, so he asked the state’s legislative counsel for an opinion.

In short, the legislative counsel believed that committee’s purpose had come to an end.

"… the committee was intended to be in existence for a limited transition period that ended …(when) the legislative assembly approved the formal business plan the Cover Oregon board had adopted,” reads a lettter from legislative counsel Dexter Johnson.

"We conclude that the legislative committee ... no longer exists."

So that takes us back to Patnode. He’s a new hire with a higher salary, taking over an organization with a history of failure but, now, with fewer people ensuring the health insurance exchange stays on track.

When asked about the committee disbanding, Holm responded, “Cover Oregon will continue to be responsive to requests from the Legislature to answer questions, participate in meetings and provide timely information."

Cover Oregon’s first executive director, Rocky King, came under fire when the online enrollment system failed to go live in October. He went on medical leave in December, then resigned for medical reasons in March. 

Bruce Goldberg, the former head of the Oregon Health Authority (OHA), took on the executive director role but resigned in March – the announcement of which was made by Gov. John Kitzhaber during a press conference about the troubled website.


Soon after, Clyde Hamstreet assumed the role of interim executive director at Cover Oregon. His firm specializes in turning around troubled organizations and businesses. According to an email Hamstreet wrote to the Senate Republican office, his reign will end when Patnode’s begins next week.

The On Your Side Investigators asked to speak with Patnode on Wednesday but were told he was unavailable.

KATU also contacted Hamstreet and Tina Edlund, the woman tasked with leading the state's transition to the federal technology. Neither returned messages.