Gov. Kitzhaber trying to shift responsibility for Cover Oregon

by Rep. Dennis Richardson

Recently in the Oregon Capitol I joined the Joint Committee on Legislative Audits, Information Management and Technology for a report on Cover Oregon.  The key speaker of the hearing was Governor John Kitzhaber.  Kitzhaber testified that he and the legislature had been deceived by Oracle, the state’s primary I.T. contractor, and that he was requesting the Oregon Attorney General to consider suing Oracle to “recover the people’s investment in Cover Oregon.” In addition, he testified that Cover Oregon has “exceeded its enrollment targets.”

The report he gave shifted responsibility rather than offering Oregonians a true picture of who is to blame. Here’s why:

1. Kitzhaber: I didn’t know there were problems with Cover Oregon until after it failed.

Facts: Last January Kitzhaber told a KATU TV reporter that he knew nothing about the problems with Cover Oregon until October 2013, sometime after the October 1, 2013 launch date had come and gone. As a result of the Governor’s statement, KATU obtained copies of then State Representative Patrick Sheehan’s December 2012 and my September 2012 warnings to the Governor. Note that these warnings were sent to the Governor more than a year before the launch date of this debacle. Subsequently, KATU aired a prime time expose’ proving the Governor’s statement was untrue.

2. Kitzhaber: Cover Oregon has exceeded enrollment targets.

Facts: Cover Oregon was originally called the Oregon Health Exchange (HIX). The Affordable Care Act (Obamacare) required each state to have an internet website where individual health insurance policies could be reviewed, compared and purchased. States had the option of either developing their own exchanges or participating in a “federal health exchange.” Oregon was one of 14 states that accepted federal grants to develop its own individual health insurance policy exchange. In contrast to the Oregon Health Exchange, there is the Oregon Health Plan.   Since the Oregon Health Plan was enacted in 1993, state health agencies have routinely determined eligibility for and enrolled qualified Oregonians into federal Medicaid—the federal health plan for low income individuals. The state Medicaid program is now run by the Oregon Health Authority.

After Cover Oregon’s failure in its mission of enrolling individuals into private health insurance policies and its determination that most Cover Oregon applicants actually qualified for free Medicaid health care, Cover Oregon increased its efforts to assist the Oregon Health Authority in signing up qualifying citizens for Medicaid – but again, there were notable failures. According to an Oregonian article nearly 4,000 undocumented residents were signed up for Medicaid. Although the number of Oregonians enrolled for Medicaid by both the Oregon Health Authority and Cover Oregon (338,726), far exceeded the anticipated number (200,000 plus), the number of individual health policies enrolled by Cover Oregon (83,852) was much less than the numbers originally targeted by Cover Oregon (which ranged from a low projection of 94,405 to a high projection of 206,937). When the facts about the enrollment numbers are known, the Governor’s statement about Cover Oregon exceeding its target is untrue.

3. Kitzhaber: The failure of Cover Oregon is Oracle’s fault and the state should sue Oracle to recover the public’s investment.

Facts: The Governor’s impassioned accusation of Oracle is all hat and no cattle. It was the Governor’s appointees and their staff who signed a “time and materials” contract with Oracle instead of a contract where payment was based on performance and outcomes. In other words, “time and materials” means the state pays for the time (hours) worked, regardless of what the contractor may or may not produce. The state agency staff were simply out of their league when they decided to run the Cover Oregon project themselves. An experienced “Systems Integrator” should have been hired instead. The Governor ignored repeated warnings from Maximus, the Quality Assurance team, and from me as Co-Chair of the legislature’s Joint Ways and Means Committee. According to KATU, Oregon Health Authority managers even edited a Maximus report to delete a warning from Maximus that there was no way to “conclude that the current governance structure is adequate or effective.”

For two years Oracle’s invoices were paid by the state without reference to actual outcomes obtained.  Now, more than six months after the failed launch date and more than $130 million in contract programming, Governor Kitzhaber is demanding the Attorney General sue Oracle.

Oregonians deserve an honest report from their Chief Executive. The truth is that it wasn’t Oracle’s fault – it was the fault of bureaucrats at Cover Oregon, the Oregon Health Authority and the Governor’s office who directed Oracle’s work, then refused to change course when warned. And now the Federal Government is knocking on the Governor’s door. The FBI has issued subpoenas for several top officials, including the Governor’s Chief of Staff – which has taken this failure to a potentially criminal investigation.

There has been an avalanche of resignations at the top – including one that continues to draw a salary of more than $14,000 per month. There’s simply nobody left to blame but the Governor. To place this failure on a programming contractor who was working at the direction of a state agency is simply a cover-up. I’m disappointed that the Governor’s testimony didn’t offer Oregonians an honest account of what went wrong, or a real path to correct course.