Oregon cuts ties with Oracle's health exchange

AP News
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Posted: Oct 22, 2014 6:32 PM

PORTLAND, Ore. (AP) — Oregon is cutting its last ties with a botched health insurance exchange portal built by Oracle Corp. as the state and the high-tech company pursue lawsuits against each other.

In April, Oregon announced it was giving up on the troubled state exchange and would use the federal site HealthCare.gov for signing people up for private insurance policies.

Oregon had planned to salvage some of the Oracle-built portal to enroll people in Medicaid, but officials have now decided to scrap that project as well and will use another state's Medicaid enrollment system instead.

Low-income Oregonians who are eligible for Medicaid will also enroll via HealthCare.gov during the upcoming open-enrollment period, which starts Nov. 15. The new system for the state will not be ready until next year.

Cover Oregon spokeswoman Ariane Le Chevallier said the state will continue to use Oracle's technology to manage current enrollees until the full transition to HealthCare.gov is complete and all past enrollment work is complete, which is expected to be about June 2015.

Le Chevallier said Oregon doesn't know yet which state's Medicaid technology it will use — officials are working on criteria to consider when evaluating other systems.

"We will be interested in how similar their Medicaid policies are so that minimal customization is required," Le Chevallier said.

The approved budget for the Medicaid enrollment portal is $43 million, most of it to be paid by the federal government. The state paid Oracle about $240 million in federal funds for its work on the health insurance exchange portal and related work.

Oregon says the decision to sever ties with Oracle, made last Monday, came after Oracle refused to cooperate in moving servers from their facilities to the state data center in a timely manner.

But Oracle says the disagreement was over eliminating the pre-production environment from the servers — the backup system where patches, updates, and modifications can be tested before they're applied to the actual portal. Eliminating that backup system, Oracle said in a statement, would lead to "violating widely accepted best practice and risking the citizens' data."

In dueling lawsuits, Oregon and Oracle blame each other for the state website's failure.

The state has sued the Redwood City, California, company in state court, claiming that Oracle officials lied, breached contracts and engaged in "a pattern of racketeering activity." Meanwhile, Oracle has sued the state in federal court alleging breach of contract and copyright infringement.