Did the Department of Health and Human Services engage in a massive cover-up of fraud within the Oregon health care exchange? Evidence suggests that is a distinct possibility.
The story of Cover Oregon is a microcosm of Obamacare complete with big promises, expensive taxpayer-funded ad campaigns, the failure to live up to expectations and the loss of hundreds of millions of dollars of taxpayer money. Oregon also adds another element to the scandal -- potential criminal activity from those at the every top.
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Before the enactment of Obamacare, Oregon Gov. John Kitzhaber was seen as a leading voice for government-run health care and once the Obamacare spending spigots opened, he saw the opportunity to make Oregon the tip of the new health care spear. The Obama administration plied the state with nearly $300 million to establish a model exchange. The state added its own personal touch with ads that looked like they were designed at Woodstock.
When it was time to flip the switch, nothing happened. Contractors working on the site had warned they needed more time, but their pleas were ignored. The governor was running for re-election and Cover Oregon was to be the centerpiece of his campaign. The longer the web portal was down, the more political pain and embarrassment the governor would feel. Polls began to show that the fiasco was damaging the governor.
Faced with falling poll numbers, Kitzhaber dispatched the self-proclaimed "Princess of Darkness," his political advisor Patricia McCaig to oversee the Oregon exchange. Finally, fearing the episode could actually cause the governor's defeat, the decision was made to pull the plug and throw $300 million into the garbage. Oregon shutdown its own exchange and joined the federal exchange. Apparently, the whole episode garnered a collective yawn from HHS who rolled the state exchange into the federal exchange with no questions asked.
Since the episode, Kitzhaber has been forced to resign and been under FBI scrutiny for other potentially illegal actions. However, HHS still does not seem to care about the loss of over a quarter of a billion dollars on the state's exchange notwithstanding a legal obligation that the HHS secretary has the responsibility to determine whether “an Exchange or a State has engaged in serious misconduct with respect to compliance with the requirements of, or carrying out of activities required under, this title.”
HHS has yet to undertake any investigation around the allegations of private and governmental misconduct in Oregon, or in any of the other six states with failed exchanges, despite the $1.45 billion in federal grants awarded to those states to build the exchanges.
Oracle, the primary contractor on the exchange, wants to get to the bottom of the scandal. They filed suit demanding oversight action by HHS. According to their counsel:
“We are taking this action because the extraordinary facts of this case require federal investigation and oversight,” said John Cooney, Partner at Venable LLP, speaking for Oracle. Cooney added, “The state of Oregon illegally hijacked its independent health insurance board called Cover Oregon, gave unelected political operatives control over ACA implementation, made false statements to HHS, shut down a working exchange to shore up the re-election campaign of an embattled Governor, and then filed litigation against a contractor to attempt to distract attention from its own failures. Secretary Burwell has the statutory responsibility under the ACA to investigate these types of allegations against all parties involved, and we hope this suit will ensure she exercises that authority promptly.”
Congress has only scratched the surface of the scandal, holding a few hearings. It may be up to the courts to ensure the Obama administration not sweep the scandal under the rug like so many before it.
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