SALEM, Ore. (AP) - Oracle Corp. has sued the state of Oregon in a fight over the state's health insurance exchange, saying government officials are using the technology company's software despite $23 million in disputed bills.
The lawsuit seeks payment of the disputed $23 million plus interest, along with other unspecified damages.
Oregon's health-insurance enrollment website was never launched to the general public. State officials have blamed Oracle, but the company says the state's bad management is responsible.
Gov. John Kitzhaber has called for the state to sue Oracle and recover some of the $134 million it has already paid to the Redwood City, California, company.
In June, Oregon issued legal demands for documents that could become evidence in a possible lawsuit against Oracle under the state's False Claims Act.
"The governor is aware of the lawsuit and isn't surprised by it," Melissa Navas, a spokeswoman for Kitzhaber, said in a statement. "The state fully expected to end up in litigation over Oracle's failure to deliver. The attorney general's office will review the complaint filed by Oracle and continue to pursue legal remedies on behalf of the state."
Lawyers at the state Department of Justice were reviewing the lawsuit, spokeswoman Kristina Edmunson said. "We will continue to pursue all legal options," she said.
Oracle declined to comment.
The lawsuit lays out Oracle's side of the Cover Oregon fiasco in the most detailed terms yet.
The company says the project became a victim of bureaucratic infighting between two state agencies responsible for both the Cover Oregon website and a separate effort to modernize a complex state computer system.
It says state officials were unable to define requirements for the Cover Oregon system, an essential early step, and even went on a 60-day "retreat" to develop them but "returned empty-handed." State officials continued making requests for changes in the crucial final weeks before the website was supposed to launch in October 2013, the lawsuit alleges.
Then-executive director Rocky King was more concerned about the website's look than its function, the lawsuit alleges. It quotes from an email he sent in late September: "If the road is going to be bumpy, let me at least be driving a good looking car."
The lawsuit also faults the state's decision not to hire a systems integrator, which works as a sort of general contractor to coordinate and direct the work of multiple technology vendors. With the state acting in that capacity, the lawsuit says, Oracle programmers were at the whims of indecisive and warring state managers.
The website's problems became a political liability for Kitzhaber, a Democrat who has built a national reputation as a health care reformer. His Republican rival, state Rep. Dennis Richardson, has used the Cover Oregon fiasco to argue that Kitzhaber is an ineffective manager and a poor steward of public funds.
Kitzhaber responded by firing several state managers, in some cases with a hefty severance, and blaming Oracle for work he's called subpar. Oracle's lawsuit repeatedly refers to Kitzhaber's statements as "slander." Even as Kitzhaber was publicly scolding the technology giant, Cover Oregon managers continued seeking assistance from Oracle programmers.
"Oracle gave that help for many months, in spite of the public excoriation, because it was committed to helping Cover Oregon complete the project and because Cover Oregon repeatedly promised to pay Oracle for its services," the lawsuit says. "In the end, though, Cover Oregon reneged on its promises, thus prompting this lawsuit."
Instead of signing up for health insurance in one sitting, Oregonians had to use a hybrid paper-online process that was costly and slow, and the state had to hire more than 400 workers to help them. Altogether, about $250 million in federal funds has been spent on Oregon's exchange, including technology development, salaries, advertising and rent.
Despite the exchange's technology woes, about 454,500 Oregonians have enrolled in coverage through Cover Oregon using the hybrid process. An estimated 97,000 of those enrolled in private health plans, while about 357,500 enrolled in the Oregon Health Plan, the state's version of Medicaid.
Earlier this year, the state decided to stop building the Oracle website and transition to the federally run enrollment website.
The FBI and the federal Government Accountability Office are also investigating Oregon's exchange problems.
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Full coverage of the troubled Cover Oregon website:
- Cover Oregon project getting on track according to independent report
- Cover Oregon says state likely won't be affected by court ruling
- New Cover Oregon executive director to make $215,000, with less oversight
- Oregon hires firm to link to federal health site
- Cover Oregon's transition to federal exchange rated 'high risk' for failure
- Cover Oregon offers staff retention bonuses that could total $650,000
- Oracle: Cover Oregon website worked, but plug pulled for political reasons
- Oregon hires lawyers, issues demands for potential Cover Oregon suit
- Kaiser official selected to lead Cover Oregon
- Exclusive poll: Majority holds Kitzhaber accountable for Cover Oregon failure
- Grand jury to consider Cover Oregon evidence
- 80,000 Cover Oregon customers must re-enroll through federal health exchange
- Breach of contract lawsuit from 2011 could tip scales in Cover Oregon claims
- Attorney about Oracle lawsuit: "(It's) like throwing a rock at a hornet's nest'
- Gov. Kitzhaber seeks lawsuit over Cover Oregon health exchange
- Drastic call for full audit of Cover Oregon edited out of 'missing' Maximus report
- Subpoenas issued in Cover Oregon investigation
- Retiring Cover Oregon manager fires off damning email about state leaders
- Emails further suggest Cover Oregon used 'smoke and mirrors' for fed money
- New emails suggest Cover Oregon leaders started celebrating far too early
- KATU investigation finds Oracle shares blame with Cover Oregon for website disaster
- Panel recommends Oregon move to federal health exchange
- Oracle says it's not to blame for failed launch of Cover Oregon
- No decision on future of Cover Oregon but options narrowed to two
- Report: Federal exchange cheapest fix for Cover Oregon
- Cover Oregon goes to Congress, defends work that's been done
- Cover Oregon invites public to once-secret oversight meetings
- Top Cover Oregon IT official resigns
- Cover Oregon: Apply for insurance in April and avoid federal penalty
- Cover Oregon makes secret meetings public, won't explain the change
- Secret Cover Oregon oversight meetings may violate public meetings law
- Cover Oregon announces $1 million ad blitz to raise awareness
- Months later, Gresham woman still wondering if she has health insurance
- Portland tech company to governor: We can fix Cover Oregon's website
- State granted one-month extension for Cover Oregon enrollment
- First Data report: Cover Oregon didn't have federally required backup plan
- Watch: Your Voice Your Future Town Hall: Cover Oregon
- Cover Oregon confessions: Are they playing games with your health?
- New report answers many Cover Oregon questions - often for second time
- Cover Oregon directory Goldberg resigns; Governor releases investigation findings
- Cover Oregon: Still pushing for deadline extension
- Oregon tied for last in nation for young-adult health-insurance sign-ups
- Cover Oregon: Apply now if you want health insurance this year
- Federal government announces Cover Oregon investigation
- Former Cover Oregon director says 'all of us' share blame for failures
- Top Cover Oregon official refuses to discuss Lawson resignation
- Official: Oracle not allowing Cover Oregon probe access to 6 employees
- Trouble with Cover Oregon? You may still get federal tax credits
- Cover Oregon website developer pulls 100 worker off project
- Ex-Cover Oregon website chief: 'I stuck to the talking points ... they were not accurate'
- High-level IT consultant on Cover Oregon: 'They didn't know what they were doing'
- New Cover Oregon allegations: 'If it's true, someone's going to prison.'
- Paging Dr. Kitzhaber: What did the governor know about Cover Oregon collapse?
- State rep., U.S. Senate candidate calls for the end of Cover Oregon
- Cover Oregon head: State might scrap all or part of failing website
- State lawmakers to grill Cover Oregon chief
- Family struggles to sign up for insurance through Cover Oregon
- First legal complaint filed over health enrollment mistakes
- Democratic state lawmaker believes Cover Oregon can be saved
- Contractor plans to examine why Cover Oregon failed
- 'We look like fools:' A history of Cover Oregon's failure
- State rep: Ditch Cover Oregon in favor of federal exchange
- Video: Exclusive Interview: Gov. John Kitzhaber - Cover Oregon 1/9/2014
- Gov. denies prior knowledge of Cover Oregon failure, exits exclusive KATU interview
- Kitzhaber outlines Cover Oregon's next steps: 'I can't give you a date'
- Kitzhaber: Firm will review Cover Oregon failures
- Cover Oregon applications left in limbo?
- Man with cancer waiting on Cover Oregon, gets insured
- Man with cancer still waiting on Cover Oregon
- New calls for Cover Oregon to take responsibility for project failures
- Rocky King, director of troubled Cover Oregon, resigns
- Salem man says Cover Oregon error left him in health care limbo
- Some question if they'll be covered by Cover Oregon in the new year
- What doomed Cover Oregon? 'Mismanagement,' say former employees
- After resigning, Lawson not talking about Cover Oregon website failures
- Ore. health official in charge of building Cover Oregon website resigns
- Fewer enrollments challenge Oregon exchange budget
- Executive director of Cover Oregon taking medical leave
- Cover Oregon considers new solutions
- Kitzhaber calls for independent review of Cover Oregon
- New emails show Cover Oregon unraveling in days before launch
- Emails: Cover Oregon executive knew about website problems in May
- Cover Oregon complicated by state's grand vision