The state's lawsuit, filed in Marion County Circuit Court on Feb. 13, tries to keep Oracle working for the state even as Attorney General Ellen Rosenblum continues to pursue a separate lawsuit accusing the company of fraud and racketeering over the Cover Oregon technology project.
The state contends in its suit that despite the ongoing legal hostilities, the company had agreed to keep serving the Oregon Health Authority's Medicaid-funded program until a new system is in place in December. The suit said that late on Feb. 5, the company notified the Oregon Health Authority it would not renew a contract that expires Feb. 28.
"Oracle's last-minute announcement has left OHA with no alternative," said the lawsuit, which was filed by a private law firm representing the state. "The state will be unable to enroll people in Medicaid."
Oracle has been under contract since late 2012 to help enroll people in Medicaid in one effort by the state to cope with Cover Oregon's troubles. Oracle's software is considered crucial for a process already overwhelmed with the large number of enrollees and re-enrollments added by the expansion of Medicaid under the Patient Protection and Affordable Care Act.
Oracle's move doesn't just affect new members. Its software also is used to re-enroll a large number of members already in the system.
Oracle's system for Oregon is already so swamped that many Oregonians wait weeks or months for their applications to be processed, sometimes causing them to be lose their health care coverage under the Oregon Health Plan. That in turn threatens their care, such as access to medication and doctors.
In all, the system processes 26,000 low-income people each week, according to the state. As a result, Oracle's action will "effectively deny access to health care to hundreds of thousands of Oregon's most vulnerable citizens," according to the state's lawsuit.
The suit highlights a little-known fact: Oregon has continued to use Oracle software and services despite having moved to use the federal health exchange to sign up people for private health insurance. The federal exchange sends information back to the state for Medicaid signups.
In a Feb. 10 letter to the state, Oracle defended its decision to not renew the contract, citing the state's lawsuit and the company's counterclaim that the state owes it $23 million. It also echoes its earlier claims that Cover Oregon worked just fine, and the state's shut-down of the exchange was purely political.
"It is beyond comprehension that the state believes it can criticize and defame Oracle, and seek to enjoin it from doing further business with the state due to the alleged failure to deliver a working system, while at the same time threaten Oracle with legal proceedings to force it to continue to provide hosting service because those very same services and system are working so well they are in fact critical to the Medicaid enrollment," said the letter from Dorian Daley, Oracle's senior vice president and general counsel.
The state said in a Feb. 9 letter that it was caught off guard by Oracle's decision against continuing the Medicaid work. It had planned to use Oracle's services until the transition to the new federal exchange and a replacement Medicaid system, obtained from Kentucky, could be completed.
"In September, Oracle Vice President Marti Menacho promised that Oracle would renew it contracts and continue to host both Cover Oregon and OHA's systems so that Oregon could complete its transition project. Relying on Oracle's promise, OHA did not secure new hosting services," wrote Fred Boss, deputy attorney general. "Since August, Oregon's transition team has been in weekly discussions with Oracle's team. Since the fall, those discussions have included finalizing the OHA and Cover Oregon contract renewals."
©2015 The Oregonian (Portland, Ore.)
