Oregon sues Oracle for botched O-Care website

Oregon is suing software giant Oracle for its work on the state’s health exchange, Cover Oregon, which was marred by technical issues and abandoned earlier this year.

State Attorney General Ellen Rosenbaum filed a lawsuit alleging fraud and breach of contract against Oracle with the Marion County Circuit Court on Friday. The suit accuses Oracle of “fraudulently” inducing the state to enter into a contract to build the Cover Oregon exchange.

The lawsuit charges that Oracle violated that contract by failing to meet its obligations, overpaying and undertraining personnel and hiding the level of its “shoddy performance.” It also accuses the company of filing more than $240 million worth of false claims for its work.

“Oracle’s conduct amounts to a pattern of racketeering activity that has cost the state and Cover Oregon hundreds of millions of dollars,” wrote Rosenbaum.

Oregon was the first state to abandon its state health exchange after spending $130 million to build it.

The state decided to scrap the site altogether and send consumers to sign up through the federal exchange, HealthCare.gov, during the 2015 enrollment period. Currently, the state exchange is only able to accept paper applications.  

“I fully support the AG’s actions against Oracle & will provide whatever is necessary to protect Oregon taxpayers,” tweeted Gov. John Kitzhaber (D-Ore.) on Friday.

Kitzhaber had asked Rosenbaum to file the lawsuit, but before the state was able to act, Oracle filed its own suit against Oregon, accusing the governor of a “smear campaign.”

Oracle blamed bureaucratic hurdles and micromanagement from state officials for the website’s failure.

The Federal Bureau of Investigation also launched its own investigation into the botched site and has subpoenaed state officials to understand what went wrong.