Ore. Gov. Seeks Lawsuit Over Exchange; Conn. Selling Technology
May 30, 2014 in News
On Thursday, Oregon Gov. John Kitzhaber (D) sent a letter to state Attorney General Ellen Rosenblum (D) asking for the state to file a lawsuit against Oracle over its failed health insurance exchange website, AP/Modern Healthcare reports.
Oregon’s insurance exchange website is the only state-operated system that has prevented residents from enrolling in coverage electronically because of technological glitches (AP/Modern Healthcare, 5/29). The issues have forced state residents to enroll in coverage through a costly and slow paper-online process. State exchange officials last month made the decision to scrap the exchange site and move to the federal exchange site.
According to the Congressional Research Service, Oregon had received $305 million in federal grants to build its exchange. The state used $134 million of the funding to pay Oracle, the contractor it hired to create the site (iHealthBeat, 5/22). According to AP/Modern Healthcare, the state still is withholding $25.6 million in payments from Oracle.
In the letter, Kitzhaber said that Rosenblum will make the final determination about whether to file a lawsuit against the company for the failed website but noted that the state has strong claims (AP/Modern Healthcare, 5/29).
Kitzhaber acknowledged the state’s own failings in supervising the project, but said Oracle deserves some of the blame. “I don’t think by any stretch of the imagination Oracle or anyone else could assume that we were paying them to produce a website that didn’t work,” he said (Cooper/Wozniacka, AP/Sacramento Bee, 5/29). He did not specify how much money he is hoping to recoup from Oracle, although he said that the state will pay for the portions of the site that are operational (AP/Modern Healthcare, 5/29).
In response, Rosenblum said that her legal team is reviewing legal options and strategies. “I share [Kitzhaber's] determination to recover every dollar to which Oregon is entitled,” she said.
Meanwhile, Kitzhaber has also sent a letter to HHS’ Office of Inspector General, asking the agency “to levy the appropriate fines and penalties to hold Oracle accountable” (AP/Sacramento Bee, 5/29).
In a statement, Oracle said that the state mismanaged the project and is trying to shift blame. “Contrary to the story the state is promoting, Oracle has never led the Oregon Health Exchange project,” the company said. It added, “[Oregon Health Authority] and Cover Oregon were in charge and badly mismanaged the project by consistently failing to deliver requirements in a timely manner and failing to staff the project with skilled personnel.” Oracle also said it was “proud of the work that [it has] done” and looks forward to “an investigation that … will completely exonerate” the company (Viebeck, The Hill, 5/29).
Connecticut Looks To Sell Exchange Website Technology
In related news, officials in Connecticut, which had a smooth exchange rollout, are selling their website technology to states that struggled to launch their online platforms, Modern Healthcare reports.
A spokesperson from Maryland Health Connection, the state’s health insurance exchange, said Maryland is “already underway” in adopting the Connecticut technology and is working with Deloitte, the main contractor that oversaw the successful implementation of the site. She noted that switching to Connecticut’s technology is the cheapest option, costing the state an estimated $40 million to $50 million.
However, Dan Schulyer, senior director for exchange technology at Leavitt Partners, said that adopting another state’s technology is “not a seamless purchase.” He noted that building an exchange site using Connecticut’s template could reduce the development time from 16 months to about six months. He also raised concerns that states with outdated Medicaid systems might be unable to connect with the exchange platforms, meaning extra work for vendors (Tahir, Modern Healthcare, 5/29).