Federal Prosecutors Probe Oregon Insurance Website Debacle

Tuesday, 20 May 2014 08:16 PM

 

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Federal prosecutors have subpoenaed state records for a grand jury investigation of the troubled Cover Oregon health insurance website, the governor's office said Tuesday.

Oregon abandoned its plans for an independent online exchange after it failed to launch and the state said fixing it would be too time-consuming and expensive. Instead, Oregon last month decided to switch to the federal portal, making it the first state to do so.

The state paid its independent contractor, Oracle $134 million in federal funds to build what turned out to be a glitch-filled site. 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.

The governor's office released subpoenas Tuesday from the U.S. attorney's office. The subpoenas were issued to both Cover Oregon and the Oregon Health Authority, which was responsible for the early technology development of the exchange site.

They demand records of communications between state officials involved in developing the website, five of whom have resigned. They include Bruce Goldberg, former head of the Oregon Health Authority; Rocky King, former Cover Oregon executive director; and Carolyn Lawson, the health authority's former chief information officer.

The subpoenas also demand communications with the federal government about the status or functionality of the website and communications about federal funding reviews and lists of people attending them.

And they ask for communications with Exeter Group, a Boston-based software company that told Oregon it had an already built, inexpensive exchange that could plug into the state's existing technology.

Cover Oregon and the Oregon Health Authority must provide the documents by June 6.

The agencies released a joint statement saying they will cooperate fully with federal officials.

"We will work collaboratively with the U.S. attorney's office to provide any and all information we have and make any and all staff available to assist," the statement said.

An investigation ordered by Gov. John Kitzhaber found state managers failed to heed reports about problems that prevented the website from launching. It also found Oracle did a shoddy job in building the exchange.

Kitzhaber's general counsel Liani Reeves said in a letter to the U.S. attorney's office that the state would "fully comply" with the subpoenas.

"The governor is committed to a thorough review of Cover Oregon to ensure the appropriate accountability and oversight for the public investment made in the Cover Oregon website," Reeves wrote.

In March, the federal Government Accountability Office announced an investigation of Oregon's exchange, including looking at whether the federal government can reclaim grant money given to Cover Oregon if taxpayer funds were mismanaged.

Separately, former Health and Human Services Secretary Kathleen Sebelius asked for an inspector general's investigation into problems with the rollout of the health care law.

Despite the exchange's technology fiasco, about 280,000 Oregonians have enrolled in coverage through Cover Oregon using the hybrid process. An estimated 81,000 of those enrolled in private health plans, while about 199,000 enrolled in the Oregon Health Plan, the state's version of Medicaid.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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