Governor presses for lawsuit against Oracle, GOP rival says state mostly to blame

by: TRIBUNE PHOTO: PETER WONG - Gov. John Kitzhaber (back to camera) answered questions Thursday afternoon from his GOP gubernatorial rival, state Rep. Dennis Richardson (far left on dais), during a legislative committee hearing in Salem on the problems with Cover Oregon.Democratic Gov. John Kitzhaber and Republican rival Dennis Richardson faced off Thursday as the governor announced a long-expected lawsuit against Oracle Corp. in connection with the failed Cover Oregon website.

Kitzhaber, appearing before a legislative committee on information technology, said the lawsuit was one of three steps the state will take against the software giant.

"Oracle's failure is unacceptable to Oregonians who need and deserve access to quality health care," Kitzhaber said.

Kitzhaber requested Attorney General Ellen Rosenblum, a separately elected official, to proceed with a lawsuit.

But Richardson, a lawyer and state representative from Central Point and the GOP nominee against Kitzhaber, questioned the prospects for such a lawsuit.

He said the state's failure to hire an overseer for the technology project, known as a "systems integrator," plus state contracts with Oracle that apparently are limited to time worked and materials provided, would work against it.

Oracle officials responded to Kitzhaber's announcement by saying the company "was proud of the work" done on Cover Oregon and expected to be exonerated in any investigation or court hearing.

"We understand the political nature of the announcement just made and that the governor wants to shift blame from where it belongs," Oracle officials said. "We are proud of the work that we have done to enable over 420,000 Oregonians to enroll in health care. We look forward to an investigation that we are confident will completely exonerate Oracle."

State's culpability

It was their first meeting since last week's primary, when Richardson won against five little-known opponents and Kitzhaber had no significant opposition.

Although Richardson is not a member of the committee, legislators are allowed to participate at the discretion of the chairman. Kitzhaber had not been scheduled by the committee, but he announced about two hours in advance that he would appear to testify about Cover Oregon.

"There is no question but that the combination ... created a perfect storm on the state's side that created this problem," Kitzhaber replied.

"But no one can convince me that Oracle, with a straight face, can say we didn't know you hired us to produce a functioning website. You don't get to be the second-largest software company in the world with that attitude. Yes, the state has culpability. We have addressed that. But yes, Oracle has culpability."

Kitzhaber also said, prior to Richardson's questioning, that he would ask for an investigation of Oracle by the U.S. Department of Health and Human Services and enlist the help of Oregon's congressional delegation to recoup money for Oregon.

Richardson slammed Kitzhaber's remarks after the committee hearing, issuing a campaign statement saying that the governor was "so desperate to get out of the Cover Oregon hot seat that he’ll say and do anything to draw attention away from himself."

"The fact is, trading blame doesn’t solve the problem," Richardson said. "Kitzhaber had a responsibility to be accountable to Oregonians, because it is their money that he is wasting. Instead of taking ownership over the failed project, he is merely attempting to distract us from his chief role in the Cover Oregon disaster.”

Effective way to enroll

Oracle is based in Redwood City, Calif., but has an office in Hillsboro.

Despite spending of $248 million for a project to enable people to enroll people in private insurance or determine their eligibility for state-supported insurance under the Oregon Health Plan, the website has not enrolled anyone without assistance.

It has become a major political liability for Kitzhaber, a former Roseburg emergency-room physician who seeks a record fourth nonconsecutive term.

The Cover Oregon board has voted to join the federal electronic exchange for the next enrollment period this fall.

But when Richardson questioned whether Cover Oregon should remain as a public corporation, Kitzhaber said the answer should be supplied by the board and whoever is hired as its next executive director.

"The objective is to make sure that Oregonians have an effective way to enroll in commercial (insurance) products in a market that is competitive and transparent," he said.

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Here are Gov. Kitzhaber's prepared remarks to the committee:

Good afternoon. Before you begin with your regular agenda and updates, I appreciate you allowing me a few minutes to discuss steps I’m taking to demand further accountability and begin fighting to recover the public’s investment in Cover Oregon as we continue to ensure that the people of this state have better access to quality, affordable health care.

As you know, I have already taken a number of actions to respond to the failed website at Cover Oregon. I commissioned First Data to conduct an independent review of the project, to identify mistakes that were made, and to make recommendations on how best to move forward. And I have been following through on those recommendations – holding accountable those at the Oregon Health Authority and Cover Oregon whose decisions contributed to the failure to deliver a working website.

We are making progress moving away from the failed technology toward a reliable enrollment process with the federal exchange that will ensure Oregonians have better access to health care.

But we have unfinished business. I have prioritized cleaning up our own house before reviewing and commenting on the performance and failings of Oracle, Cover Oregon’s primary website developer.

We have acknowledged that oversight was a problem at Cover Oregon. But better oversight would only have given us a clearer and earlier picture of Oracle’s poor performance. Oracle did not deliver. The poor quality of its work is obvious in the many bugs that are still not fixed, in missed deadlines, in the fundamental flaws in the system’s architecture, and in the independent assessments and quality assurance reports that concluded Oracles work was regularly incomplete, routinely late, and below industry standards.

From First Data’s independent assessment to Maximus’ quality control assessments to CMS’s Technical Assistance report earlier this spring – all reviews have detailed a pattern of underperformance, missed deadlines, and poor project management.

Most troubling of all are those allegations that seem to point to Oracle’s lack of respect towards its customers in Oregon. One Oracle reviewer’s report ends by calling into question “their commitment to resolving technical problems during such a critical time.”

Oracle’s failure is unacceptable to Oregonians who need and deserve quality health care and who have been faced with months of uncertainty, confusion and delays. And it is unacceptable to me and my commitment and responsibility to this state.

From the time that I began practicing emergency room medicine in Roseburg in 1974, improving the lives and health of Oregonians has been my overarching professional and political goal. Despite the success of our Coordinated Care Organizations to reduce costs and improve health outcomes and our efforts to enroll more eligible Oregonians through expanding Medicaid, the failed rollout of the Cover Oregon website has cast a shadow on these reform efforts, the success of which is crucial to Oregon’s future.

The time has come to hold Oracle accountable for its failure to deliver technology that worked on the timelines the company committed to. Today I have asked Oregon Attorney General Ellen Rosenblum to immediately initiate legal action to recover payments and other damages from Oracle.

I have written to the Inspector General of the U.S. Department of Health and Human Services, Daniel Levinson, urging him to evaluate the work performed by Oracle and to consider the full range of legal options.

I have also written to our U.S. Sens. Ron Wyden and Jeff Merkley, requesting they use their oversight authority to help investigate and recoup taxpayer dollars paid to Oracle. As Chair of the U.S. Senate Committee on Finance, with jurisdiction over the Affordable Care Act, Senator Wyden is well positioned to examine the company’s performance and accountability. The state and federal government can and should work together to recoup those lost taxpayer dollars.

Finally, we are fully collaborating with the investigation being led by the United States Department of Justice in the hope that its findings will contribute to a successful legal outcome against Oracle.

Let me be clear. I believe the law is on our side. I believe justice is on our side. I also understand that Oracle is a large corporation, the second largest software company in the world, and it will undoubtedly fight us tooth and nail, but I will not allow that to stop us from recovering the money Oracle received for technology that did not work and was not delivered on time.

I am confident that with the actions we have taken – and are taking today – and with the continued dedication and hard work of the thousands of Oregonians engaged in transforming the delivery of health care in Oregon, we will succeed. From health care providers and hospital administrators, to Democratic and Republican lawmakers, to agents, community partners, and small business owners and dedicated state workers helping fellow Oregonians everyday — we are moving forward to make this system work.

We will succeed in improving the lives of Oregonians with better health and better care at lower costs. I’m not saying it’s going to be easy or that we won’t face new challenges along the way – but I am saying that Oregon will continue to be the place where we face problems head on, and we come together to solve them.

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