Oracle Sues Oregon for $23 Million Over Health Exchange

Oracle Corp. (ORCL), the primary developer responsible for setting up Oregon’s Obamacare health-insurance exchange website, sued the state claiming it’s owed $23 million.

The lawsuit escalates a dispute with Oregon Governor John Kitzhaber, who in May asked the state attorney general to take legal action against the company in an attempt to recoup the state’s payments.

Kitzhaber, a 67-year-old Democrat who has come under political attack on the issue as he seeks a fourth term, has been trading blame with Oracle over the failure to create a website that Oregonians could use to enroll in health coverage under President Barack Obama’s Affordable Care Act.

Technical flaws in the Cover Oregon website, the portal to a $305 million state-run insurance exchange, caused thousands of consumers to file paper applications until the state gave up in April and directed enrollees to the federal website.

“While flogging Oracle publicly, Cover Oregon continued privately to ask for Oracle’s help,” according to the complaint filed today in federal court in Portland.

The requests for help continue, according to Redwood City, California-based Oracle, the biggest maker of database software. The suit is based on breach of contract claims.

Nkenge Johnson, a spokesperson for the governor, didn’t immediately return a call after regular business hours seeking comment on the lawsuit.

The case is Oracle America Inc. v. Oregon Health Insurance Exchange Corp., 14-cv-01279, U.S. District Court, District of Oregon (Portland).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg

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