Oregon Faces Setback with Procuring State-Based Health Insurance Marketplace

Oregon has experienced another setback in their long and arduous journey towards launching a publicly accessible state-based marketplace for health insurance plans. Following their initial troubled implementation for a state-based platform a decade ago, a new solicitation issued this July was cancelled just four months later due to an apparent conflict of interest between a consultant and one of the top bidding companies.

Oregon's ACA marketplace problems began in 2014 with the expensive and issue-ridden launch of their high-profile, Oracle-based platform – one that could not process digital applications, leaving applicants and administrators to rely on paper applications. By the time the department decided to pivot to a portal accessing the federal marketplace, the system had already cost the state more than $200 million. This federal marketplace portal is the current solution in place until the conclusion of the active solicitation seeking a vendor to provide a new state-based marketplace platform.

Now, a decade later, Oregon has a new challenge in their latest attempt to implement a state-based health insurance marketplace. On July 3, 2024, an RFP was issued for the system, and by November 15, 2024, it was cancelled. The two top bidders at the time were Deloitte LLP, and VIMO, doing business as GetInsured. An official statement provided by Debbie Dennis, Deputy Director and Chief Administrative Officer of the state Department of Administrative Services, stated that “a potential conflict of interest was identified, and so it was for that reason that the state needed to cancel the process so they could make some modifications and rerelease [the contract] as quickly as possible.”

To assist with developing the project and evaluating the bids, the department hired Duane McKee, a consultant who, unbeknownst to the department at the time, had recent business ties with GetInsured. On October 22, 2024, a Deloitte executive brought the potential conflict to the attention of state contracting officials: McKee previously had worked for GetInsured and was mentioned by name in a proposal submitted to the state of Illinois by that same competing company. Eighteen business days later, both McKee’s consulting contract with the state and the state’s solicitation for a new Oregon ACA marketplace platform were cancelled on November 15th.

Dennis said that the state did not officially investigate to confirm if there is a real conflict of interest with McKee. “Due to the timing and the need to work quickly”, she clarified, “it seemed better to cancel and make some adjustments and restart.” The reissued RFP was posted after the cancelation on November 22nd, 2024, with proposals due on January 8th, 2025.

For more information on the most recent solicitation for these services, please see the tracked opportunity here: https://iq.govwin.com/neo/opportunity/view/250650

Source: The Lund Report