A year ago on Sept. 30, insurance agents around Oregon were feverishly preparing to use the state's new health exchange website to help enroll consumers – only to be stunned by a dire-sounding directive.
With open enrollment beginning the very next day, Cover Oregon officials told agents to immediately stop scheduling new Cover Oregon client appointments until further notice, due to technical problems. Officials said the problems could be cleared up by the weekend.
One year later, those technological problems are continuing and the exchange has become a national case study in good intentions gone wrong.
As we approach the birthday of the most costly technology failure of Oregon's history, here is a handy roundup of where we are, how we got here, and what comes next.
State officials and insurers are working to hook up to the federal exchange. In all, 15 Oregon commercial insurers have shared data and plans with the feds to offer private plans on healthcare.gov in November. "It's an important milestone," said Cover Oregon communications director Amy Fauver.
Those signing up for the Medicaid-funded Oregon Health Plan are not as lucky. Though people can still enroll, the state's plans to salvage the Cover Oregon technology to make it easier to enroll people in OHP this year have stalled since August, when problems with the exchange were found to be even worse than thought. Oracle – which the state had just sued for alleged fraud and racketeering, refused officials' request to help. Plans to eliminate the need for manual enrollment using a new application have been shelved until next year. Fortunately for the state, the federal government has agreed to handle most OHP enrollments for a 12-month period. Others will be processed manually by about 75 people.
Meanwhile, the state's litigation with Oracle continues. Oregon wants to battle it out in state court, but on Sept. 25 Oracle filed a new legal action demanding the state's lawsuit be transferred to federal court to deal with the company's claims of copyright infringement.
So has Oregon's version of federal health reforms been a failure?
No. In place of the handy online one-stop shopping center envisioned, state officials hired hundreds of temps to manually process paper and electronic applications. Oregon has racked up impressive enrollment gains of more than 350,000 in the Oregon Health Plan – most of them people who lacked coverage before health reforms kicked in.
The exchange and the Oregon Health Authority also processed more than 100,000 applications for private health insurance. About 70,000 have kept their coverage, and about 80 percent of those receive federal tax credits.
The manual enrollment process has not been without cost. Through this December, the estimated cost of manual enrollment will run more than $50 million, on top of the more than $250 million spent on other Cover Oregon work. And due to a flawed manual enrollment process, thousands were mis-enrolled or suffered errors or lengthy delays causing them stress, hassle and heartache.
Numerous reports and interviews have pinpointed poor contracting and misplaced confidence that inexperienced state staff could oversee Oracle themselves- sort of a DIY project using $300 million in federal funds.
Also, responsibilities and accountability were split between Oregon Health Authority, the agency tasked with building the technology, and Cover Oregon, the customer. Turf battles and feuds ensued.
Staff and consultant concerns were shared with high-ranking state officials -- as high as the governor's aides, even. But they were ignored. Gov. John Kitzhaber has said his aides did not inform him of serious problems until late October 2013.
Oracle sold its exchange product to the state as an integrated project that would require little assembly. But the many Oracle software products purchased by the state did not work together, and the custom programming that was supposed to make it work was shoddy, incomplete and riddled with 2,000 programming bugs, officials and consultants said said.
During the manual enrollment project, state officials used some Oracle technology to process applications. But problems continued. At one point, according to a former top Cover Oregon administrator, about 20,000 applications disappeared, with consumers calling in for weeks and months being told falsely that their insurance information was in the mail.
Today, Cover Oregon is now trying to figure out how many Oregonians will owe the IRS money at tax time due to an erroneous tax credit formula adopted by exchange officials. Though the problem was known about since January, exchange officials have had their hands full with the technology problems, they say.
The big-ticket items? Oregon officials say the state has paid Oracle $240 million for its work on the exchange and a similarly unsuccessful sister project at the Oregon Health Authority. That does not include more than $120 million on other consultants, payroll and advertising costs at Cover Oregon. The manual enrollment will tack on more than $50 million, including $11 million just on temps. The bulk of this was funded by the federal government.
Oregon is on the hook for $3.5 million of the ongoing $35 million project using Deloitte Consulting to salvage the earlier technology work for the Oregon Health Plan. The federal government will pick up the rest.
Cover Oregon officials say efforts are on track to allow Oregonians to use the federal health exchange when open enrollment begins Nov. 15.
On the Medicaid side, the federal exchange is a temporary fix, meaning the state's work is not over. Using federal funds, officials still plan to fix the Oracle technology and automate Oregon Health Plan enrollment next year.
Potentially the biggest hurdle? Oracle says the state doesn't have permission to use its programs until the state pays about $23 million.
Meanwhile, state officials are doing the best they can to make Cover Oregon a memory. In November, consumers will be directed to oregonhealthcare.gov, not coveroregon.com.
Also, lawmakers of both parties have called for the exchange to be dissolved as a stand-alone entity, to be absorbed into the state bureaucracy. The matter will be taken up by the Legislature next year.
Though Republicans have claimed keeping Cover Oregon in existence until February will cost $20 million, officials say even if the agency is dissolved its personnel and federally mandated functions will merely be moved elsewhere. The costs won't go away.
©2014 The Oregonian (Portland, Ore.)