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Federal report faults Cover Oregon, Oracle

PORTLAND — A federal government report on Oregon's botched health insurance exchange faults the state's main information technology contractor for not providing key information to Cover Oregon and blames the exchange for lax management.

The review by the Centers for Medicare and Medicaid Services, first reported by The Oregonian on Thursday, says Cover Oregon lacks oversight over the project and has limited visibility into Oracle Corp.'s work. The state also lacks leverage in their contract to make Oracle accountable for missing deadlines.

As a result, the report says Cover Oregon is largely dependent on the vendor and isn't closely monitoring Oracle's activities to make sure the company is fulfilling the requirements of the contract.

It recommends that Cover Oregon “identify a more appropriate” IT vendor.

More than five months after the exchange was due to go live, 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. Officials are pessimistic about the prospects for finishing the website before the end of March, when nearly all Americans are required to have insurance under the federal health care law.

According to the report, Cover Oregon's system architecture and data model need “significant review and re-work.”

The report, dated Feb. 27 and based on a mid-January site visit by federal IT specialists, says Oracle has not provided Oregon with comprehensive test results and analysis reports. It also suggests many Oracle staff “do not have extensive knowledge and experience” and that Oracle may be “throwing bodies rather than skillset at a problem.” That, it says, is significantly racking up project costs.

Thus far, Cover Oregon has paid Oracle more than $90 million for building the exchange. Cover Oregon is continuing to withhold $25.6 million that Oracle Corp. has billed for technology development.

Two weeks ago, Oracle pulled 100 of its software developers out of Oregon — nearly two-thirds of Cover Oregon's Oracle workforce — from the exchange project. Just 65 Oracle developers remain to work on the project.

The report does praise Oracle for some progress, including in “systems engineering areas” — as evidenced by recent releases being delivered on time — and in the stabilization of the exchange system.

“There are still significant performance issues with the system such that, while the core functionality exists, the end user experience would be significantly diminished,” the report says.

Cover Oregon spokesman Michael Cox said the report is dated and the exchange has addressed its findings. Oracle declined to comment.

The Cover Oregon board will meet later Thursday to discuss post-Oracle options.

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