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Governor wants to sue Oracle over Oregon's failed health exchange

 Posted: 6:15 PM May 29, 2014

SALEM — Gov. John Kitzhaber said today he's seeking a lawsuit against Oracle Corp. over Oregon's online health insurance enrollment system, the failure of which embarrassed the state and resulted in multiple investigations.

In a letter to Attorney General Ellen Rosenblum, Kitzhaber said he has fired state managers in charge of Cover Oregon, and now it's time to hold accountable the website's main technology contractor.

"This is a very serious decision taking on a very large corporation — the second-largest software corporation in the world — but I do not believe they've delivered for the state of Oregon," Kitzhaber told The Associated Press during an interview in his state Capitol office.

Kitzhaber said Rosenblum will make the ultimate decision about whether to file a lawsuit, but he believes the state has strong claims. Rosenblum responded in a letter to the governor that her legal team has been reviewing options and developing legal strategies.

"I share your determination to recover every dollar to which Oregon is entitled," she wrote. Cover Oregon and Oracle have agreed not to initiate legal action before May 31.

Oracle, which is headquartered in Redwood City, California, said in a statement it was not responsible for the failed launch.

"Contrary to the story the State is promoting, Oracle has never led the Oregon Health Exchange project," Oracle's statement said. "OHA (the Oregon Health Authority) and Cover Oregon were in charge and badly mismanaged the project by consistently failing to deliver requirements in a timely manner and failing to staff the project with skilled personnel."

The governor is trying to shift blame from where it belongs, the company said, adding it is confident an investigation would "completely exonerate Oracle."

In a letter to Cover Oregon's temporary leadership last month, Oracle President and Chief Financial Officer Safra Catz wrote that the company provided "clear and repeated warnings" to Cover Oregon that the exchange website would not be ready to launch last October.

Oregon paid Oracle $134 million in federal funds to build what turned out to be a glitch-filled Cover Oregon website. Oregon is the only state that still doesn't have an online portal where the general public can sign up for health insurance in one sitting through a marketplace required under President Barack Obama's health care law.

The state is still withholding $25.6 million in payments from Oracle. Oregon abandoned plans for fixing the site and is switching to the federal portal used by most states,

The website's failure has been an embarrassment for the Democratic governor, who enthusiastically embraced Obama's health care law and has for decades been a respected voice on health care policy. Kitzhaber's Republican rival in the November election, state Rep. Dennis Richardson, has made the Cover Oregon problems a centerpiece of his campaign.

— Associated Press

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