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Kitzhaber Hires Cover Oregon Examiner as Doubts Build on Fate of Exchange

Gov. John Kitzhaber told reporters Thursday that the state has hired an independent examiner to critically analyze the mistakes of contractor Oracle Corp and the state in rolling out Cover Oregon, while he and other Democratic officials have skirted discussion of whether the insurance exchange can survive its botched roll out.
January 10, 2014

Gov. John Kitzhaber told reporters Thursday that the state has hired an independent examiner to critically analyze the mistakes of contractor Oracle Corp and the state in rolling out Cover Oregon, while he and other Democratic officials have skirted discussion of whether the insurance exchange can survive its botched roll out.

Kitzhaber said 170,000 Oregonians now have health coverage thanks to the Affordable Care Act. But the vast majority of those have gotten Medicaid — only 20,000 people are covered by the private policies sold on the exchange, which are needed to keep it alive when its grant funding runs out at the end of 2014.

Republican Jim Thompson of Dallas told The Lund Report after Kitzhaber’s press conference that he doesn’t believe Cover Oregon will be able to stick to a greatly reduced budget and he sees no way that the Legislature will approve more money to bail out the exchange in an election year.

“We’re in this so deep it’s going to be difficult to get out of it; it’ll be difficult to go forward,” Thompson said. “[Healthcare reform] is a great goal. … We got where we set such sweeping goals that we didn’t know how to work with them.”

Cover Oregon is set up to operate based on a commission from every private insurance policy it sells, and with people unable to go online to easily buy policies, the state has fallen far short of its goal of 50,000 enrollees. The state has made tremendous progress since the end of November, when it reported only 44 policies sold — the lowest in the nation — but it’s still short of even low ball estimates of 30,000 individuals in private plans by the end of 2013.

The state still has three months until the end of open enrollment to play catch-up, but it has a lot of ground to cover.

Kitzhaber acknowledged Thursday that many people are still frustrated by the process, which has been an onerous and anxiety-inducing ordeal, leaving many applicants to wait months to hear back on paper applications from an overwhelmed Cover Oregon, which had not intended to process 86,000 applications by hand.

Even after the federal exchange,, put together a functional website after experiencing significant delays, Cover Oregon still does not work properly, and there’s no launch date for a fully operational website in sight.

The problems of Cover Oregon have cost the Oregon Health Authority several million dollars and the exchange an extra $1 million by having to hire low-wage temporary workers to process forms — and high-salaried Silicon Valley experts and consultants to fix mistakes made by Oracle as well as the state in getting the website running.

Acting Cover Oregon director Dr. Bruce Goldberg said the exchange would be able to stay within its 2014 grant budget by revamping priorities.

For 2015, Goldberg opened his budget predictions with the goal of holding the line on administrative fees, indicating he believes the exchange will sell enough policies to survive.

“We’re preparing some budgets that have us at very low enrollment figures without increased fees,” Goldberg told the Cover Oregon board Thursday. Currently insurance companies pay roughly a $9 monthly fee for every policy sold on the exchange. “I would like to leave that administrative fee where it’s at.”

But Thompson found Goldberg’s projections to be unrealistic. He told The Lund Report that Goldberg had earlier told him the same thing with one extra detail — to reach that goal, Cover Oregon would have to cut its budget 20 percent.

“Have you ever seen a state agency cut service by that much and still operate the way they’re supposed to? That 20 percent is a big drop,” said Thompson, a moderate and the ranking Republican on the House Health Committee.

If Cover Oregon doesn’t have enough funds, Thompson said the state may have to pack it up and turn everything over to the federal exchange.

Merkley Deflects Question of Federal Help

At a recent string of town halls last weekend, U.S. Sen. Jeff Merkley joined the bandwagon in excoriating Oracle, the state’s contractor for designing and implementing the nonfunctional Cover Oregon software and website.

When asked whether the federal government should get involved in the problems facing Cover Oregon, Merkley’s office declined repeated requests to answer the question.

“Senator Merkley has been pushing Cover Oregon very hard at the highest levels to consider every option to get the website up and running and help Oregonians enroll in healthcare,” according to spokeswoman Courtney Warner Crowell.

OMIP Extended Through March

Kitzhaber said the state had extended the high-risk Oregon Medical Insurance Pool for three months, until March 31, to ensure this group of people have enough time to pick a new plan. People in this group had been denied private insurance previously because of pre-existing medical conditions and stand to gain the most from guaranteed coverage, but the problems of Cover Oregon put them at risk of having a lapse in treatment for serious conditions without the extension.

Goldberg wouldn’t project when the website will be fully up and running, since Cover Oregon and its information technology contractor, Oracle, had failed to meet nearly all of their previous target dates anyway.

“We’ve had multiple dates that have come and gone, and I don’t think they served us any purpose,” he told reporters. A permanent director to replace sidelined Cover Oregon Executive Director Rocky King is expected to be hired by early April.

The state hired the Atlanta firm First Data Government Solutions to critically examine all aspects of the development and roll out of the contract with Oracle and the crippled Cover Oregon exchange. First Data helped set up the Arkansas Health Connector and will be paid $228,000 for its services in Oregon.

Oregon: Medicaid Leader

In addition to announcing the independent oversight, Kitzhaber’s press conference was a clear attempt to shift the narrative away from the disastrous roll out and toward the improvements of Obamacare upon the old system, where many people had no chance of affording health insurance and thousands more were denied insurance because of pre-existing conditions.

“We’ve reduced the uninsured by 20 percent in three months,” Kitzhaber told reporters. “Are Oregonians getting healthcare? The answer is yes. Is healthcare more affordable? The answer is yes. Competition in the exchange has driven down rates. We’re adding over a billion dollars to the Oregon economy.”

And he noted that the number of people signed up for the state’s Medicaid program, the Oregon Health Plan — had well exceeded expectations with 150,000 new enrollees, compared to a goal of 136,000 by the end of 2014.

By comparison, Oregon’s neighbor Washington has roughly twice the population, but only 180,000 new people in its Medicaid program.

Kitzhaber said there were another 30,000 people who have gotten subsidy levels for private insurance approved by Cover Oregon, but had not yet purchased a plan. Some may have decided to keep their old plans, which were given a special extension.

Others may still be sorting through the bewildering selection process, where most Oregonians have over 100 different health plans to choose from on the exchange. Goldberg later told the Cover Oregon board that the state is receiving new applications at the rate of 1,000 a day.

The coordinated care organizations have been a bit overwhelmed providing care for so many new enrollees because many people had been denied access to care before the Affordable Care Act and have a backlog of health problems.

Kitzhaber conceded that absorbing a surprisingly high number of Medicaid enrollees had not come without growing pains for the CCOs.

“A year ago, we had 170,000 people who didn’t know how they were going to pay for healthcare,” he said.

Dental Care Backed Up

One choke point in Medicaid has been the delivery of dental care services. The demand for dental care is not limited just to the 150,000 new Oregon Health Plan members — but 65,000 adults who've been on the Oregon Health Plan and had their dental coverage greatly improved, giving them access to routine dental exams for the first time.

Mike Shirtcliff, the CEO of Advantage Dental, told The Lund Report that in the state’s major metro areas, including Portland, Salem, Eugene and Medford — the CCOs have still not signed contracts with all the dental care organizations that serve their communities, and are facing a dentist shortage. “The DCOs who have not contracted are getting shut out,” he said.

“They’re all coming on the first day and demanding their care right this minute,” Shirtcliff said. He added that it doesn’t work that way — managed care needs more time to pace out care.

Shirtcliff noted that a majority of the state’s 2,000 dentists do not take Medicaid clients because of low reimbursement and the state has relied on DCOs to corral enough dentists willing to meet demand.

He tried to head off this problem with a Senate bill that would have mandated the CCOs contract with all the DCOs, but opponents such as Care Oregon and Health Share lobbied to defeat his bill. Mike Plunkett of CareOregon Dental earlier told The Lund Report that Shirtcliff’s bill just divided the healthcare community and delayed the ability of CCOs to sign contracts with the dentists.

Shirtcliff said that despite the current snags, he actually thought the Medicaid expansion has been smoother than he had pessimistically predicted, and was glad to be in Oregon, which has a Medicaid program far ahead of other states.

“I suspect it’ll all get worked out, given time,” he said.