Oracle says Cover Oregon to blame for health exchange debacle

Oracle says Cover Oregon to blame for health exchange debacle

Oracle says Cover Oregon to blame for health exchange debacle

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by GOSIA WOZNIACKA and JONATHAN COOPER/Associated Press

KREM.com

Posted on April 17, 2014 at 8:36 AM

PORTLAND, Ore. (AP) - After six months of near silence about the problems at Cover Oregon, the project's main technology contractor says it's not to blame for the failed launch of Oregon's health insurance exchange.

In a letter to Cover Oregon's temporary leadership last week, obtained by The Associated Press, Oracle Corp. President and Chief Financial Officer Safra Catz wrote that Oracle provided "clear and repeated warnings" to Cover Oregon that the exchange website would not be ready to launch last October.

This assertion goes directly against what Oregon officials have told the public and independent investigators who reviewed the project: that Oracle was to blame because the tech giant's staff regularly reassured the state that the portal was almost ready, asserting that the next release of the website would work.

It didn't. Despite promises that the exchange would soon launch to the public, Cover Oregon and Oracle missed deadline after deadline. More than six months later, Oregon's exchange is the only one in the nation that still doesn't let the public enroll in coverage in one sitting. Instead, Oregonians must use a time-consuming hybrid paper-online application process and the state was the only one to receive a month-long enrollment extension from the federal government. The website's failure, and Oracle's role in it, has attracted notice from tech-industry publications.

Cover Oregon spokesman Michael Cox confirmed the agency has received Catz's letter. In a response letter to Catz provided to the AP and dated Wednesday, acting executive director Clyde Hamstreet wrote that he is not yet in a position to respond to Oracle's arguments. Hamstreet, a turnaround consultant, took over Cover Oregon's leadership four days ago.

Cover Oregon declined to provide any other comments on Catz's letter. The state is parting ways with Oracle at the end of April and is on the brink of deciding whether to switch to the federal exchange or hire a new contractor to fix the botched website.

More: State could sue Oracle over Cover Oregon problems

The state has already paid Oracle $134 million in federal money and is withholding $26 million from the company. Oregon also hired a legal firm to review options. Catz's arguments could reflect what Oracle plans to say in court if either Oregon or Oracle file a lawsuit.

More: State withholds payments to Oracle

In the letter, Catz cites "many documents and communications detailing project risks and readiness provided to Cover Oregon." She also says Cover Oregon didn't provide some critical specifications to Oracle until November 2013, a month after the exchange was to go live. Oracle declined to comment on the contents of the letter or provide the documents.

"Even without these documents, however," Catz says in the letter, "anyone with even minimal IT expertise would have known that the system would not, and could not, go live on October 1."

Catz also wrote that Oracle merely assisted Oregon on the exchange project, was not the project manager or systems integrator, and the company was hampered by the state's lack of skills and ability in performing those duties.

Oregon's decision not to hire a systems integrator has since been criticized by the state itself and in the independent review released by Atlanta-based First Data Government Solutions in March.

According to that investigation, the contract language and the terms of the Oracle purchase orders also delineate a smaller role for Oracle. The contract was based on hours worked, not on the completion of work. It "put the burden on the state for directing the vendor work and offers little accountability for Oracle's performance," First Data wrote.

Interviews with state officials and quality assurance reports have also shown the state wasn't able to hire its own developers and often lacked expertise needed for the project - making it probable that it was more dependent on Oracle than the contract had envisioned.

Catz wrote in the letter that the Cover Oregon portal is completed and has been functional "for many weeks," with an error rate below one percent - but Cover Oregon has chosen not to make the website available to the general public.

However, the portal has only been used by a small number of insurance agents and community partners, meaning it is unknown how well it would handle large numbers of public sign-ups.

And it appears several key elements of the portal are still incomplete. Cover Oregon's interim chief information officer Alex Pettit told board members last week that re-enrollment, change of circumstances, and interfaces with insurance carriers and Medicaid must still be developed.

In the letter, Oracle touts its work on other state-built exchanges, such as one in California, which are running well. However, Oracle only played a small role on those exchanges, while Oregon relied on the company nearly completely for most of the development work, the software and hardware, data storage, and consulting services.

So far, about 217,000 Oregonians have enrolled in coverage through Cover Oregon. About 63,000 of those enrolled in private health plans, while nearly 154,000 enrolled in the Oregon Health Plan, the state's version of Medicaid.

More health reform coverage

More: State could sue Oracle over Cover Oregon problems

More: State withholds payments to Oracle

 

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