PORTLAND, Ore. — CareOregon will become a subsidiary of Providence Plan Partners under a proposed formal partnership the two organizations announced Tuesday.

CareOregon and Providence, both nonprofit organizations based in Portland, signed a letter of intent to strategically align operations and services for Oregon’s Medicare and Medicaid populations.

CareOregon serves more than 300,000 people through the two government programs. It operates the largest plan under Health Share of Oregon, a coordinated care organization serving the Portland area.

Providence Plan Partners is the health care management and administrative services affiliate of Providence Health Plans and a subsidiary of Providence St. Joseph Health, a sprawling Catholic health care system based in Renton, Wash.

Under the agreement and if they obtain regulatory approvals, CareOregon will join the Providence St. Joseph Health organization, the organizations announced. CareOregon will retain its locally based, secular and nonprofit status, as well as its own board of directors.

Providence also manages 55,000 Medicaid patients under the Health Share umbrella.

The partnership news comes as Health Share and 14 other organizations are in the final stages of the contracting process with the Oregon Health Authority for the next round of five-year Medicaid contracts, valued at $6 billion a year.

Providence and CareOregon said the affiliation would draw on the strengths of both organizations. Providence Plan Partners will provide resources and support to CareOregon.

The two organizations anticipate the completion of their new structure by January.

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