The state of Oregon has inked an $18.4 million contract with Deloitte LLP to oversee its attempts to salvage the flawed Oracle technology for use in enrolling people for the state’s Medicaid program, the Oregon Health Plan.
The contract was announced at the Oregon Health Policy Board meeting by Tina Edlund, who left her perch at the Oregon Health Authority at the request of Gov. John Kitzhaber to help supervise the state’s transition away from the original Cover Oregon concept.
Edlund is leading efforts to set up a state-run portal for the Oregon Health Plan while corporate turnaround expert Clyde Hamstreet has acted as interim director of Cover Oregon as it transitions the private insurance portal to the federal exchange.
Oregon just finished a “gaps analysis,” with Deloitte, a British professional services company that is one of the four largest companies of its kind in the world. The state is expanding Deloitte’s workload in a way not unlike the way Oregon expanded the mission of Oracle, which started work upgrading a computer system for the Department of Human Services and ultimately was given the responsibility of developing the technology for Cover Oregon.
But this time, the state government considered 10 bidders and chose Deloitte only after it had proven its mettle elsewhere.
Washington state’s successful insurance exchange hired Deloitte to act as its systems integrator two years ago. Since then, struggling exchanges from Minnesota to Maryland and now Oregon have asked Deloitte to take over technology projects where others failed.
At the suggestion of Kitzhaber, the Oregon Attorney General is considering legal charges against Oracle, the world’s second-largest software company after Microsoft.
Acting as systems integrator -- a kind of general contractor for IT projects, Edlund said Deloitte would have four objectives it must accomplish:
- Create a website that will direct Oregonians to the federal technology to enroll in private plans and to the Oregon Health Authority to enroll in Medicaid.
- Transfer the current Cover Oregon technology for Medicaid to the health authority for enrollment via an online form that will connect directly to the state’s Medicaid system without manual action.
- Ensure secure and complete transfer of information between the state government and the federal exchange.
- Create the ability for the system to screen applicants for other public assistance.
Edlund promised Deloitte’s work for the state will be conducted in transparency, with regular updates to the coveroregon.com site -- a stark contrast to Oracle’s work on Cover Oregon, in which even a legislative oversight committee was apparently kept in the dark while the exchange continued to tout itself as a national leader, unaware of the disaster about to erupt. “Transparency is very important to me,” Edlund said.
The contract is also written so that Deloitte will be paid based on its performance and completion of objectives, unlike the Oracle contract where the tech giant billed for time and materials.
“The last [12% of the payment] won’t be paid until we approve of the final deliverable,” Edlund said. Deloitte will be paid through leftover federal grant money that Cover Oregon had received to set up a more comprehensive state exchange before aborting that project in April.
After hearing about the decision to choose Deloitte as the systems integrator, Rick Skayhan, an insurance agent with Leonard Adams Insurance, raised some concerns, telling The Lund Report, “It appears that they want to do a “double-click” meaning an “Oregon” portal that leads Oregonians to the federal enrollment system. Why? That’s like saying you need to get through the state of Oregon’s website before you can do business with your bank. It’s a waste of resources and duplicative.”
When asked why that was happening, Ariane Holm, spokeswoman for Cover Oregon, responded saying a few other states have also taken this approach, and referenced Deloitte's Web Presence Strategy for more details on why this path has been taken. Edlund said Oregonians may go directly to the federal healthcare.gov site but developing a route on the state’s site that leads to the federal portal will ease the confusion for consumers who are ineligible for Medicaid.
Also, the systems integrator decision was announced a day after local TV news leader KATU reported that Cover Oregon’s transition to the federal exchange was at high risk for failure because a contract had not been inked.
Chris can be reached at [email protected].
