In January, Cover Oregon officials told lawmakers that efforts to fix the health insurance exchange had steadily cut the number of most serious programming bugs to just 13.
Since then, that tally has grown to about 300.
The disturbing trend underlines the uncertainty Cover Oregon and Gov. John Kitzhaber wrestle with as they decide whether to try to salvage the unfinished insurance exchange – or scrap the whole thing and move to the federal exchange. The exchange board will hear an update on the process at its Thursday meeting.
Whatever officials choose, getting the exchange running smoothly in time for this fall’s open enrollment will be difficult—and is far from a sure thing, documents and interviews show. Already, Oregon is the only state in which consumers can’t enroll in coverage and qualify for tax credits in a single sitting,
Political insiders are giving the exchange only 60 to 70 percent chance of being up and running by November, said Sen. Alan Bates, D-Medford, in an interview last month.
Crucial to achieving that is time, but the state still hasn’t made a decision on which way to go. However, The Oregonian has learned state officials are negotiating with Deloitte, an exchange consultant, about taking over the project from Oracle Corp.
Officials have blamed Oracle for the problems, and the firm is scheduled to withdraw from the project this month under an agreement with the state.
But even as Oracle prepares to leave, an agreement with Deloitte has not been reached, and the clock keeps ticking—meaning hooking up to the federal exchange remains a possibility.
Even the federal exchange option would take five to eight months, according to an alternatives analysis Deloitte prepared for Oregon in early February.
Officials for the state, Cover Oregon and Kitzhaber’s office declined to answer repeated questions about the exchange and related topics. For example, officials declined to answer questions concerning Deloitte’s billings, Oracle’s departure date and whether Kitzhaber plans to have a competitive bidding process to replace Oracle.
Cover Oregon communications director Amy Fauver said only that the state’s new top information-technology manager, Chief Information Officer Alex Pettit, is taking a close look at the exchange’s situation, and “We are looking at what the viable options are moving forward both technologically and budgetarily.”
Documents and other interviews show the decision boils down to time, risk, cost and project scope. And none of the options are ideal.
Moving to the federal exchange means abandoning years of work and settling for a less consumer- and agent-friendly system, one that doesn’t enroll qualified people directly into the Oregon Health Plan as intended.
Meanwhile, trying to get the Cover Oregon system working would be a major gamble. That’s because nobody really knows if the 300 most serious bugs—and about 900 other known major ones catalogued by exchange officials—can be fixed in time.
The Deloitte report estimated 500 more bugs are lurking in the exchange that haven’t been discovered yet. Cover Oregon officials say they are focused only on about 150 bugs deemed crucial. Those are the ones that obstruct letting consumers shop for plans, check for tax credits, and enroll in a single sitting.
The Deloitte report said that rescuing the project would be a two-year job, costing $25 million in the first year, enough to reboot a working but incomplete exchange by November.
In contrast, hooking up to the federal exchange would cost $4 million to $6 million.
Already, Cover Oregon is considering cuts, possibly including layoffs, to meet a $50 million proposed budget, one that includes less than $25 million in information-technology costs.
Oregon’s negotiations with Deloitte put the state into familiar position: negotiating with one firm after bypassing standard contracting processes.
In 2011, the Oregon Health Authority cancelled a bidding process for a contractor to oversee the exchange project, to instead hand it to Oracle. In a press conference last month, Kitzhaber cited the OHA’s contracting shortcuts as a major factor in causing the exchange’s problems.
Typically on large IT projects, the state undergoes a competitive bidding process, including a request for bids posted publicly. The process can run six months or more – while would make fixing the exchange by November essentially impossible. The Feb. 10 alternatives analysis prepared for Cover Oregon by Deloitte assumed that a vendor would be selected by late February, with no bidding process.
Todd Williams, a Portland information-technology consultant who specializes in rescuing problem projects, says it’s good that the state hasn’t rushed into a fix already. But he said issuing a contract to Deloitte without soliciting competition would put the state in a very difficult position, one with no leverage and little options if things go bad.
“Then you’re beholden to that vendor,” he said. “It is not proper fiduciary responsibility to just go with go with one vendor. Quick decisions are never good.”
Deloitte has had success with some state health exchanges, but doesn’t have a spotless record of success, he said.
Currently, only agents and certified consumer assistance workers have access to the beta version of the exchange prepared by Oracle, and report mixed results.
Rep. Mitch Greenlick, D-Portland, said whatever the state does a repeat of the exchange’s current troubles is not an option.
“I don’t think there’s any question they have to be ready for open enrollment on Nov. 15,” he said. “We can’t really do this one again - I mean, having it all screwed up.”
©2014 The Oregonian (Portland, Ore.)