Cover Oregon project complicated by state's grand vision

Cover Oregon project complicated by state's grand vision »Play Video
The glossy Oracle brochure, the front page shown here, gave indications that what Oregon state officials were asking - build the Cover Oregon website and overhaul the state's online social service delivery system - would likely court complications.

PORTLAND, Ore. – Many have blamed the embarrassing rollout of Cover Oregon on its software developer, Oracle.

The state’s health insurance exchange website hasn’t been fully functional since open enrollment for health insurance began Oct. 1. Consequently, the state has resorted to processing applications by hand.

The On Your Side Investigators pored through documents and found Oracle was selected after a two-year bidding process. They also found there was another state project that complicated Oracle's creation of Cover Oregon's website.

The state didn't just settle for an insurance exchange; the Department of Human Services (DHS) planned to also modernize Oregon's entire online social service delivery system - from Medicaid to food stamps.

Documents show state health leaders were looking to re-create the entire DHS computer infrastructure, replacing dozens of clunky old software products with one streamlined program. It would have to handle all of Oregon's social services, including: Medicaid eligibility, payments and enrollment, the Temporary Assistance for Needy Families (TANF) program, even SNAP - the supplemental assistance nutrition program.

While DHS was working to streamline Medicaid eligibility, the Oregon Health Authority (OHA) was responsible for the health care exchange.

In 2009, the state sent out requests to see which software companies were interested.

Oregon Health Authority spokeswoman Patty Wentz said the requests were posted on the Oregon Procurement Information Network (ORPIN). She said an invitation also went out in the summer of 2010, through ORPIN to vendors, to present project proposals that would meet the minimum needs of the projects.

According to Wentz, the minimum capabilities for the software included: client intake, eligibility determination/rules engine, data warehouse/data management, financial payments, case management.

"This process allows greater vetting of the vendors on the actual solutions rather than judging them on written proposals that provide little or no interactions with the venders themselves," Wentz said in an email to KATU. "This was an open competitive process and also quite lengthy."

The state said the process went through spring of 2011 and included vendor demonstrations, completed detailed evaluation of functional and technical requirements, qualitative questions and responses, and a review of the vendor's documentation of product design features and functionality.

Fewer than a dozen companies responded.

In early 2011, there was a new development. Oregon started receiving federal funds to build Cover Oregon – to the tune of $48.1 million – as a result of the Early Innovator Grant. The OHA later received another $11.8 million for the same grant.

It was at this point that leaders with DHS and OHA determined the projects should work jointly. The state, in other words, piggybacked the insurance exchange onto the DHS modernization project.

With time, the number of vendors fell to just two candidates: Oracle and Curem Software, which is now part of IBM.

The process then slowed down to allow time to evaluate compatibility of the two projects, Wentz said.

She said once Curem Software found out about the scope of the project, it dropped out.

That left Oracle as the remaining finalist.

Wentz said the state hired a third-party consultant to see if Oracle could meet the needs of both the modernization and the exchange projects. Oracle was ultimately procured through a license and services agreement.

The On Your Side Investigators found documents that show Oregon officials knew they were courting disaster in the pages of a glossy Oracle brochure called "Architects of Reform." Published in 2012, the brochure appears to celebrate Oracle's blossoming partnership with Oregon health care leaders, specifically, Carolyn Lawson, the chief information officer for DHS and the OHA.

Statements in the Oracle brochure read, "Logistically, the health insurance exchanges are a massive IT challenge. These are huge projects with the potential for serious complications, from system incompatibilities to cost overturns. Despite the risks, leaders at the State of Oregon Department of Human Services (DHS) saw this federally mandated as an opportunity to modernize their entire information enterprise."

Then Lawson was quoted in the brochure as saying "In a project of this magnitude, with these kinds of expressed timelines, we knew that if we didn't take an enterprise approach, not only would there be collisions, but we'd tie ourselves in knots."

As we know now, the project turned out to be extremely complicated. In interviews Lawson gave to other media outlets, she said Oracle executives told her Cover Oregon was the second most complex job the company ever tackled.

The On Your Side Investigators found that's because Cover Oregon is a more complex system than federal law required and more than what other states built.

Websites have "rules" to help software understand the diverse complexities of various health care scenarios. It's normal to have roughly 250 rules, which KATU found is common with other state websites. Oregon's system has around 1,700.

By Lawson's own estimate in interviews she gave last month to media outlets, it would have taken four to five years to accomplish the job. Oracle had fewer than three.

KATU reached out to both Lawson and Wentz for more perspective on the state's bidding and selection of Oracle. Lawson did not return calls or emails. Wentz said OHA leaders were swamped and declined any on-camera interviews.

KATU also left messages for Curem. They were not immediately returned.

Meanwhile, Wednesday was the last day for Oregonians to get their paperwork in order for health coverage to start on Jan. 1.