(Bloomberg) — Oracle Corp., the primary developer responsible for setting up Oregon's Patient Protection and Affordable Care Act 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 PPACA.
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Fresh Unlimited Inc., in another case related to Obamacare, won an appeals court ruling yesterday that it qualifies for a religious exemption from the law's requirement to include contraceptives in its health insurance plans. The decision by the U.S. Court of Appeals in Washington followed the U.S. Supreme Court's June 30 Hobby Lobby decision allowing family-run businesses to claim a religious exemption.
See also: Oregon may shutter its state exchange
The suit by Francis and Philip Gilardi, who own the Sidney, Ohio-based parent of Freshway Foods, is one of about 50 filed by for-profit businesses over religious objections to the Patient Protection and Affordable Care Act of 2010's birth-control coverage mandate. The Gilardis are Roman Catholic and said that complying with the U.S. Department of Health and Human Services mandate would require them to violate deeply held religious beliefs.
Website flaws
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 yesterday 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.
See also: Once a leader, Oregon exchange struggles
"The governor is aware of the lawsuit and isn't surprised by it," Melissa Navas, a spokeswoman for Kitzhaber, said in an e-mailed statement. "The state fully expected to end up in litigation over Oracle's failure to deliver."
The Attorney General's Office will review the complaint and continue to pursue legal remedies, she said.
The Oregon case is Oracle America Inc. v. Oregon Health Insurance Exchange Corp., 14-cv-01279, U.S. District Court, District of Oregon (Portland).
The case is Gilardi v. HHS, 13-05069, U.S. Court of Appeals for the District of Columbia Circuit (Washington). The case is is Gilardi v. HHS, 13-cv-00104, U.S. District Court, District of Columbia Circuit (Washington).
–With assistance from Alison Vekshin in San Francisco.
To contact the reporters on this story: Joel Rosenblatt in San Francisco at [email protected]; Andrew Zajac in Washington at [email protected]
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