State, contractor blamed for Cover Oregon problems

SALEM, Ore. (AP) An independent review of Oregon's troubled health insurance exchange has found poor management, an overly ambitious scope and shoddy work by technology contractor Oracle as some of the reasons for Cover Oregon's failed launch.

Details of the investigation by Atlanta-based First Data Government Solutions were announced by Gov. John Kitzhaber at a press conference Thursday.

Kitzhaber lashed out at Oracle, saying the review found the company had missed deadlines and performed incomplete, substandard work.

The state has paid Oracle Corp. $160 million in federal funds to build the exchange. The governor said the state had "no intention" of paying an additional $26 million in payments it's withholding for the broken website.

Investigators also found top state exchange managers had poor communications and an "unrealistically high sense of optimism that Oracle could deliver," Kitzhaber said.

Oracle spokeswoman Deborah Hellinger declined to comment on the report or the governor's criticisms.

Kitzhaber said no single person was to blame for the exchange fiasco. Rather, he said, "a series of people who made bad management decisions within a structure" bear the blame.

Kitzhaber, a Democrat, also said Bruce Goldberg has resigned as director of the Oregon Health Authority. For the past few months, Goldberg has been acting as interim director of Cover Oregon after the previous executive director Rocky King went on medical leave and resigned. Kitzhaber said Goldberg will remain in that position until a new Cover Oregon executive director is hired.

The governor also said he directed the Cover Oregon Board to change the top leadership at Cover Oregon, including chief operating officer and chief technology officer though he was not clear whether those individuals would be fired or when.

More than five months after the exchange was due to go live, Oregon is the only state where the public still can't sign up for health insurance online in one sitting. The public and Cover Oregon staff must use a hybrid paper-online process to enroll in coverage.

Officials have said the full online Cover Oregon portal will not be open to the general public before the end of March, when open enrollment ends, because it has recently experienced "an unacceptable number of IT errors."

The exchange's fiasco has created tremendous political pressure for Kitzhaber, who championed the exchange, and state legislators who overwhelmingly backed it. The governor has repeatedly said and again insisted at the press conference that he was not disengaged from the Cover Oregon process and was repeatedly assured the project was on track.

"This was a perfect storm," Kitzhaber said. "We had a big IT project, a very inspirational but as it turns out a very unrealistic project. ... In hindsight, we should have had more oversight in place, but I don't think any of us knew the scope of the problem."

Despite the technology problems, Oregon has managed to enroll about 155,000 Oregonians in coverage through Cover Oregon. More than 47,000 of those enrolled in private health plans, while nearly 108,000 enrolled in the Oregon Health Plan, the state's version of Medicaid.

The enrollment figures still fall short of the Obama administration's original projections, which assumed 189,600 would sign up for individual policies by the end of February although lower-than-expected enrollment isn't limited to Oregon. The state is one of 14 that are running their own insurance marketplaces.

The federal Government Accountability Office is also investigating what went wrong at Cover Oregon.

Copyright 2014 The Associated Press