CMS Report Details Cover Oregon’s Dysfunctional Relationship with Oracle

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The Oregonian reported today that it had obtained a confidential federal review of Cover Oregon’s troubled relationship with IT contractor Oracle Corp.

The report, issued by the Centers for Medicare and Medicaid Services (CMS) on Feb. 27, is titled “Technical Assistance Report For: Oregon Health Insurance Marketplace” and marked “for official federal government use only.”

The Oregonian did not say how it obtained the report, which paints a bleak picture of Cover Oregon’s relationship with Oracle and concludes that the Oregon exchange was unable to manage the relationship or hold Oracle accountable for its shortcomings.

The report is based largely on a site visit from Jan. 13 to Jan. 16 by the CMS State Engagement (SE) Team, which consisted of representatives from the Center for Consumer Information and Insurance Oversight (CCIIO) and the Office of Information Services (OIS), and from The MITRE Corporation.

The Oregonian called the resulting report “a withering critique of both Oracle and Cover Oregon.”

Among the findings:

  • Cover Oregon has an IT project management team, but no overarching Project Manager
  • Cover Oregon is not using a mainstream project management tool (such as Microsoft Project) to track action items and issues.
  • There is no evidence that Cover Oregon has established good contract administration processes or is closely monitoring Oracle’s activities.
  • It is not known whether Oracle is following industry standards in tracking configuration management history.
  • There is no evidence that formal processes for testing are being followed.
  • Cover Oregon is significantly dependent on Oracle staff, “many of whom do not have extensive knowledge and experience in a formal software development life cycle.”
  • Cover Oregon faces challenges recruiting IT staff.
  • By missing its Oct. 1, 2013, launch, Cover Oregon is “burning their funding rapidly with the addition of staff hired to assist with the manual processes.”

The Oregonian noted that CMS issued its report on Feb. 27, a day after a high-level team led by Oracle President and Chief Financial Officer Safra Catz met with Gov. John Kitzhaber and his staffers.

According to the paper, Catz “threatened to move the entire Oracle team off the project if the exchange didn’t pay up some of the $69 million the company claimed it was owed for work performed last fall.”

Cover Oregon had stopped paying Oracle in September and  was continuing to withhold payment until the company could produce a functional exchange website.

Catz said that arrangement no longer worked for Oracle, according to the Oregonian.

By that time, Oracle had withdrawn 100 of its programmers from Cover Oregon — about two-thirds of the programming staff assigned to the exchange.

On March 3, Cover Oregon announced that it had reached a “transition agreement” with Oracle under which the exchange would pay Oracle $44 million for work it had done through February, but would continue to withhold $26 million.

Another Cover Oregon investigation has recently gotten underway.  The U.S. Government Accountability Office announced last week that it will review the state’s troubled insurance exchange at the request of several members of Congress, including both of Oregon’s Democratic senators, Ron Wyden and Jeff Merkley.