Nathanson Bill Requires Quality Assurance for IT Projects That Cover Oregon Ignored

House Bill 4122 will require all large state IT projects to have quality assurance information shared with high-ranking executive officials, but emails show Oregon Health Authority Director Bruce Goldberg was aware of bad reports on Cover Oregon a year before the failed launch. Rep. Dennis Richardson says he had also discussed the red flags directly with Gov. John Kitzhaber.

The House Consumer Protection and Government Efficiency Committee passed a sweeping bill that will ensure that future state information technology projects will have clear third-party oversight and that the appropriate boards and directors are notified of any reports.


“There will be oversight through third-party contracts,” said Rep. Nancy Nathanson, D-Eugene. “We are making sure that there are more eyes on that report.”


House Bill 4122 is being pushed as a response to the trouble-plagued Cover Oregon insurance exchange, but Cover Oregon already had a third-party quality assurance contractor, whose concerns appear to have gone largely ignored.


September 2012 emails shared with The Lund Report by Rep. Dennis Richardson, R-Central Point, show that he had discussed a series of red flags with Oregon Health Authority Director Bruce Goldberg that had been raised by Virginia company Maximus, Inc., the third-party oversight.


Of the 19 categories assessed by Maximus, 11 were marked with red flags, including such key areas as project management, scope, budget and schedule.


But Richardson told The Lund Report that neither Goldberg nor Gov. John Kitzhaber heeded the warnings of Maximus, a full year before Cover Oregon fell on its face trying to launch the website.


“The governor said we need to trust the team,” Richardson said, recalling in 2012 that he told Kitzhaber that a scathing quality assurance report would not go overlooked if the governor were shepherding such a large contract for a private business investment. “You wouldn’t just trust the team. You would listen to the QA.”


At the time of his email exchange, the Oregon House was politically divided, and Richardson was the powerful co-chairman of the Joint Committee on Ways & Means, in charge of the government purse. Today, he’s challenging Kitzhaber for his job as governor and using the mistakes of Cover Oregon to build his campaign.


Goldberg declined to answer questions about Maximus to The Lund Report. “That is all part of the independent review, so Bruce wouldn’t have a comment on it,” said Oregon Health Authority spokeswoman Patty Wentz. The Lund Report further asked the health authority for a copy of Goldberg’s emails to verify the accuracy of correspondence provided by Richardson.


The Oregonian has earlier reported that Mike Bonetto, the governor’s chief of staff and former health policy advisor, had told Kitzhaber that Bonetto had demanded an action plan from those in charge of the Cover Oregon project. Goldberg promised Richardson that his concerns would be addressed.


“It should not be a surprise that with a project of the size of developing the Cover Oregon website, issues were raised along the way. Issues were raised, and they would get resolved,” said chief Kitzhaber spokeswoman Nkenge Harmon Johnson in an email to The Lund Report. Harmon Johnson said Oracle and key project leaders had misled Kitzhaber and the Legislature about the exchange’s ability to meet its timetable.


In his statement responding to Richardson’s call for a federal audit, Kitzhaber said: “No one is angrier than I am about the issues with Cover Oregon. No one wants to get to the bottom of this more than I do. We do already have new Cover Oregon leadership in place.”


But Cover Oregon executive director Rocky King has been replaced by Goldberg, who was not only aware of the Maximus quality assurance reports but was the boss of former Oregon Health Authority Chief Information Officer Carolyn Lawson, whom The Oregonian reported tried to suppress the critical Maximus reports in January 2013. Lawson was stopped by other government functionaries in the Department of Administrative Services from forcing Maximus to rewrite a more favorable report.


Lawson, who was asked to resign in December 2013, has not yet been interviewed by First Data, the firm hired by Kitzhaber to audit Cover Oregon, but Matt Shelby of the Department of Administrative Services told The Lund Report that First Data has not finished its investigation, which will be released to the public next month.


As budget chair, Richardson held up $48 million from a federal grant for Cover Oregon until Goldberg agreed to hire the quality assurance contractor, Maximus. “It is only because of that that we have the uncovering of the truth about the fraud, waste and abuse that is part of the uncovering of Cover Oregon,” he added.


HB 4122 Casts Wider Net


Richardson supports HB 4122, which he said would ensure future reports would be more widely distributed than the Maximus assessments.


Rep. Nancy Nathanson, D-Eugene, the chief sponsor of HB 4122, said her legislation would require a quality assurance firm like Maximus for all state information technology projects worth more than $5 million and all contracts worth more than $1 million if they meet certain criteria such as if the project will take longer than a year or if it’s critical to the mission of the agency or public corporation.


She said HB 4122 requires the directors of relevant state agencies, the boards of public corporations like Cover Oregon or the Public Utility Commission and the new state chief information officer to be kept up-to-date on quality assurance reports. The Legislature is not among the parties to receive automatic notices, but she said the people’s representatives will not be kept in the dark.


“When you have a report spread so broadly, we will get reports,” she told The Lund Report.


Nathanson also amended the bill to stipulate that state agencies could not cut IT projects into smaller pieces to fall under the threshold for quality assurance oversight, a point praised by Rep. Alissa Keny-Guyer, D-Portland:


“I think you did a very good job preventing any leakage,” Keny-Guyer said.


Better than Average Enrollment


Despite the technology failures of Cover Oregon, the state has actually done relatively well at enrolling people in subsidized insurance plans compared to other states. About 35,000 people have purchased health insurance policies through the insurance exchange, putting Oregon in 24th place among other states, according to the latest data.


Cover Oregon has also enrolled 68,000 people in the Oregon Health Plan, the 12th highest figure among all states. That ranking is higher in part because most Republican-led states refused to accept federal money to insure their most vulnerable populations. Another 123,000 people have been signed up for Medicaid in Oregon through a separate process that accessed Food Stamp rolls.


“It’s a much maligned operation, but it’s enrolled 100,000 people in health insurance,” opined Rep. Mitch Greenlick, D-Portland, after he voted to put forward a number of fixes for the insurance exchange earlier this week.


Oregon, the 27th largest state, is behind smaller Connecticut but has enrolled more people than Louisiana and Maryland, which have larger populations. Cover Oregon has also assisted more people than exchanges in Minnesota and Massachusetts, although Massachusetts already had an insurance exchange prior to the Affordable Care Act.


Minnesota enrolls people below 200 percent of the federal poverty line in a public program called MinnesotaCare, so these people would not be buying subsidized insurance policies on that state’s exchange.


A bill currently in the Joint Committee on Ways & Means directs the Oregon Health Authority to study the possibility of a program like MinnesotaCare for the same socioeconomic class in Oregon, likely administered by the coordinated care organizations.


Interestingly, the CCO model was partly inspired by a similar system for delivering Medicaid in Hennepin County, Minn., which includes Minneapolis.


To learn more about the emails from Rep. Dennis Richardson, click here.

Chris can be reached at [email protected].

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