US State Sues Oracle Over Failed Health Care Website

Advertisement
By Associated Press | Updated: 23 August 2014 17:36 IST
The state of Oregon filed a lawsuit Friday against Oracle America Inc. and several of its executives over the technology company's role in creating the troubled website for the state's online health insurance exchange.

The lawsuit, filed in Marion County Circuit Court in Salem, alleges that Oracle officials lied, breached contracts and engaged in "a pattern of racketeering activity."

Oracle was the largest technology contractor working on Oregon's health insurance enrollment website, known as Cover Oregon. The public website was never launched, forcing the state to hire hundreds of workers to process paper applications by hand. The website's failure became a political problem to Democratic Gov. John Kitzhaber, who is running for re-election.

A related project to modernize functions for social services also was scrapped. The state paid Oracle $240 million for both projects.

Advertisement

"Today's lawsuit clearly explains how egregiously Oracle has disserved Oregonians and our state agencies," Attorney General Ellen Rosenblum, a Democrat, said in a statement. "Over the course of our investigation, it became abundantly clear that Oracle repeatedly lied and defrauded the state."

Advertisement

In addition to the company, the state's lawsuit individually names six executives, including Oracle Corp. President and Chief Financial Officer Safra Catz, and Mythics Inc., which acted as a middleman between Oracle and the state in early stages of the project.

The state is seeking damages as high as $240 million and penalties as high as $480 million for each allegation of wrongdoing. The state could collect damages only once but a judge could impose multiple penalties against multiple parties, said Kristina Edmunson, a spokeswoman for the attorney general.

Advertisement

In a statement, Oracle called the lawsuit "a desperate attempt to deflect blame from Cover Oregon and the governor for their failures to manage a complex IT project."

"The complaint is a fictional account of the Oregon health care project," the company's statement said. "Oracle is confident that the truth - and Oracle - will prevail in this action."

Advertisement

Oracle filed its own lawsuit Aug. 8 in federal court alleging breach of contract and seeking payment of more than $23 million in disputed bills. The Redwood City, California, company blames Oregon for the website's failure, saying the state had incompetent and indecisive staff.

Oracle also faults Oregon's decision not to hire a systems integrator, which acts as a sort of general contractor to integrate various technology components. The state's lawsuit says it was Oracle employees who persuaded the state to forego hiring a systems integrator. Oracle provided project managers and maintained control over the technical development, the state says.

The suit alleges that Oracle employees lied about the capabilities of their software components as early as 2009, when the state first put out word that it was seeking a vendor to modernize the Department of Human Services computer systems. Sales staff said Oracle software could perform 95 percent of state's requirements with minimal coding, but it in fact required substantial customization.

The lawsuit alleges that an employee falsified a demonstration of the website's capabilities for the Cover Oregon board more than three months before the website was supposed to launch. Oracle officials continually lied about progress on the site as recently as February, the lawsuit alleges.

Oracle presented false bills to the state, seeking payment for work that employees were doing for other states, the lawsuit alleges.

The lawsuit relies in part on statements from at least one former Oracle employee who is not named.

"Today, after months of investigation, the attorney general's findings go well beyond disappointing and incomplete work," Kitzhaber said in a statement. "The complaint filed contains serious new allegations of fraud, deceit, and corruption by Oracle."

Despite the exchange's technology woes, about 454,500 Oregonians have enrolled in coverage through Cover Oregon using the hybrid process. An estimated 97,000 of those enrolled in private health plans, while about 357,500 enrolled in the Oregon Health Plan, the state's version of Medicaid.

The state decided to stop building the Oracle website earlier this year and transitioned to the federally run enrollment website.

The FBI and the federal Government Accountability Office are also investigating Oregon's exchange problems.

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: Internet, Oracle, Oregon
Advertisement

Related Stories

Popular Mobile Brands
  1. Cloudflare Is Down Again For the Second Time in Weeks: See Affected Sites
  2. OnePlus 15R Surfaces on Benchmarking Site Ahead of India Launch
  3. ACT Fibernet Launches New Broadband Plans With Free OTT Subscriptions
  4. Flipkart Buy Buy 2025 Sale: Nothing Phone 3, Phone 3a Deals Revealed
  5. Motorola Edge 70 With Pantone's 2026 Colour, Swarovski Crystals Launched
  6. HMD 101, HMD 100 With Built-In Radio Launched in India at These Prices
  7. Instamart to Provide 10-Minute Delivery of Samsung Galaxy Devices
  8. Crypto Traders Await US Fed Signals as Bitcoin Price Drops to $91,900
  9. Nothing Phone 3a Lite Goes on Sale in India at This Price
  10. OTT Releases of the Week (Dec 1 – Dec 7): Know What to Watch
  1. Cloudflare Outage Blocks Access to Several Websites Including BookMyShow, SpaceX, Coinbase
  2. Samsung Galaxy S26 Series to Offer Built-In Support for Company's 25W Magnetic Qi2 Charger: Report
  3. Airtel Discontinues Two Prepaid Recharge Packs in India With Data Benefits, Free Airtel Xtreme Play Subscription
  4. Samsung Galaxy Phones, Devices Are Now Available via Instamart With 10-Minute Instant Delivery
  5. NotebookLM App Gets an In-Built Camera, Lets Users Upload Images as a Source
  6. HMD 101 Launched in India With 1,000mAh Battery, Auto Call Recording Alongside HMD 100: Price, Features
  7. Crypto Traders Await US Fed Signals as Bitcoin Price Drops to $91,900
  8. Nothing Phone 3a Lite Goes on Sale in India: See Price, Offers, Availability
  9. Realme Narzo Phones Confirmed to Launch in India Soon via Amazon
  10. Samsung Galaxy Watch Ultra 2 Launch Timeline Leaked; Could Debut Alongside Samsung Galaxy Watch 9
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.