Oregon has chosen Deloitte Consulting to meet a challenging timeline to move Cover Oregon to the federal health insurance exchange and be ready for the next open enrollment this November.
The state on Tuesday announced the award of a contract of up to $18.4 million after choosing the firm out of 10 invited to apply for the contract.
Deloitte will serve as the systems integrator, sort of a general contractor, to oversee both Cover Oregon's transition to the federal exchange and the state's effort to fix an unfinished Medicaid enrollment system for the Oregon Health Plan.
As envisioned, Cover Oregon will remain as a website for the public next year, but consumers using it will be transferred to Healthcare.gov to process their applications. People qualifying for the low-income Oregon Health Plan will be kicked back to the state for processing.
The Deloitte contract comes as the state is moving toward suing Oracle Corp, the state's previous lead exchange technology vendor, over the failure to build a working exchange despite $250 million spent by the state.
But perhaps more than a messy legal situation, the exchange's biggest obstacle is time. An earlier Deloitte report estimated that hooking up to the federal exchange would take five to eight months, a timeline the June 30 contract barely meets.
That concern was echoed by a report by Cover Oregon consultant Maximus in April, saying the contract "will need to be put in place by the end of April/early May to ensure there is ample time to execute for the 2015 enrollment."
But Tina Edlund, the Kitzhaber administration official who is overseeing the federal transition project, expressed optimism that the state has put into place adequate safeguards to avoid a repeat of last fall's disaster. Key to that effort is a Deloitte contract that is tighter than the earlier ones entered into with Oracle, and focused on the bare-minimum of necessary technology.
"I'm confident," she said, adding that she has been "laser-focused on managing scope and really making sure that we don't broaden the scope."
Deloitte served as the lead technology vendor for some states who enjoyed relative success with their exchanges, such as Kentucky. A prepared statement from Deloitte released by the state said "We have delivered in other states and we are committed to doing it again so that Oregonians can enroll in health insurance online in November."
However, Oregon's past experience with Deloitte has been mixed. On the plus side, last year the firm helped Cover Oregon set up its public browse-only site when exchange officials realized the full exchange wouldn't be ready.
Cover Oregon officials had a more frustrating experience this year when they asked the firm to look at rescuing the state's Oracle-based technology. The initial estimate of roughly $40 million was affordable. But when Cover Oregon entered into secret negotiations for a sole source contract, the firm's price doubled, triggering the decision to move to a federal exchange.
The firm's record in other states has not been without problems. Last year, in California, Deloitte software was found to be bug-ridden, leaving thousands of unemployed people without benefits. In Massachusetts, the Department of Revenue fired Deloitte over similar problems after paying the firm $54 million.
©2014 The Oregonian (Portland, Ore.)