The state of Oregon and Oracle Corp. have reached a settlement in Oregon’s suit against Oracle for what the state claimed was the technology company’s botched building of its health exchange.
In 2014 Oregon attorney general Ellen Rosenblum filed a suit against Oracle for $240 million that alleged that Oracle committed fraud and abuse in building and operating a computer system and database to operate Cover Oregon, the state insurance exchange, and the state’s social services departments.
In 2011 Oregon signed a deal with Oracle to build and operate Cover Oregon under a series of deadlines that met with various Obamacare mandates, deadlines and operating rules for launching the exchange in the fall of 2013.
“Again and again, Oracle broke its promises, missing every promised date,” the state said in its 2014 lawsuit. “Without the website portal that the state and Cover Oregon had already paid Oracle more than $100 million to build, Cover Oregon and the state each hired hundreds of additional employees and expedited their training, in order to manually enroll Oregonians in health insurance, Medicaid, and other programs by hand processing paper applications.”
Oregon filed suit after spending what the state said was $240 million “for a health insurance exchange that never worked as promised and a modernization program that never got off the ground.”
Oracle countersued Oregon for breach of contract and later the federal government for software license and related fees Oracle claimed it was owed when Cover Oregon was permanently canceled in 2015. At that time Center for Medicare and Medicaid Services took over all health exchange technology operations for the state.
Under the settlement announced Friday by governor Kate Brown and the Oregon Department of Justice, Oracle has agreed to give the state a compensation package worth $100 million.
The settlement deal is a mixture of cash and software services that includes $60 million in customer service support for various Medicaid and social service computer programs, a $10 million grant for science, technology, engineering and math programs in Oregon schools and $25 million to reimburse Oregon for litigation costs.
Oracle has also granted the state a six-year license for business enterprise software that includes PeopleSoft, Oracle’s enterprise resource planning software and for and enterprise financial planning and business intelligence software.
“Today’s settlement agreement ends years of turmoil and taxpayer expense related to a troubled health exchange program I dissolved in March 2015,” Brown says.
Oracle has yet to release a public statement regarding the settlement.