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Ex-lawmaker accuses Oregon Obamacare exchange of creating fake site

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Former Oregon Republican state Rep. Patrick Sheehan is alleging that Cover Oregon staff created dummy web pages to fool the Obama administration into thinking the Obamacare exchange was being built on time.

Sheehan, a former state representation on Oregon’s joint IT oversight committee, reports that he’s gone to the FBI with his evidence concerning Cover Oregon’s botched launch. Sheehan alleges that Oregon officials may have been touting “smoke and mirrors” in order to receive federal funding and con state lawmakers into believing the Obamacare exchange was further along than it really was.

Cover Oregon won “early innovator” grants from the federal government to implement its ambitious Obamacare exchange. The first award was $48 million, which was later upped to $59 million. The grant agreement required Oregon to fulfill certain benchmarks between 2011 and 2013, which Sheehan alleges may have been faked.

The federal government held “gate reviews” with Cover Oregon to determine whether the state was meeting deadlines for basic functionality, beginning with signing a contractor onto the project, ensuring that security standards were met and allowing customers to enroll in coverage online. Cover Oregon, of course, still cannot host online enrollment via its exchange today.

“It was communicated to me that something — one of these gate reviews having to do with a benchmark for federal funding — that the State of Oregon was not being truthful…that was the allegation that was made that was serious enough that I had to go talk to the FBI,” Sheehan said Monday.

Website construction was headed by Oregon Health Authority’s CIO Carolyn Lawson, who resigned in December for “personal reasons,” but took heat from all sides for website’s failure. Lawson made the call to award the website’s contract to IT company Oracle despite pushback from other state officials, and opted for Cover Oregon to integrate the web design itself — a job typically left to private IT professionals.

Lawson told state legislators that CMS officials were more than satisfied with Oregon’s progress after showing off supposedly functional website pages during gate reviews and reports to Cover Oregon’s stakeholders and sponsors.

“Our federal partners were delighted with the technical application, the level of quality, and the potential for re-use by other states in our design,” Lawson wrote after a 2012 review with CMS. Actual construction of the site was to begin immediately afterwards and Lawson planned to request an extra $11.8 million in early innovator grants from CMS.

In April 2012, Lawson told a state committee that at the last quarterly check-in with stakeholders and sponsors a “demonstration including individual and employer scenarios” had been successful. As Cover Oregon has the distinction of having failed to enroll a single person or business through its website, it’s not clear what those “scenarios” entailed.

In presentations to state lawmakers, Lawson didn’t demonstrate any operating web pages, according to Sheehan. “There were some screen shots,” Sheehan told KATU, “we never saw anything close to a functioning piece.”

“If they were able to connect the dots and if it’s true, someone’s going to prison,” Sheehan concluded. “It would be fraud. It would be the State of Oregon, actually, willfully,  misrepresenting something for federal funding.”

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