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Oracle faces ouster from Oregon Obamacare website

You didn't need to be an Oracle to see this one coming.

Oregon's crippled Obamacare exchange, which has been unable to enroll any people electronically online as designed, is making moves that could mean the ouster of primary vendor Oracle from future work on the marketplace.

The "transition agreement" that the Cover Oregon exchange signed with Oracle concludes at the end of April and comes a week after Maryland's troubled Obamacare exchange fired its own website contractor.

Cover Oregon also is withholding $25.6 million of the $69.5 million Oracle has claimed for technology development work the company says it did between November 2013 and February 2014.

And Cover Oregon is reserving the right to sue Oracle for any payments the Obamacare exchange has made to the tech company, according to an announcement Monday.

(Read more: Fed probe sought for Oregon's Obamacare site )

Source: Cover Oregon

The moves were disclosed as Cover Oregon's interim director announced the exchange had agreed with Oracle on a deal to "orderly transition technology development services."

"Oracle will provide transition services, maintenance, and repairs to the technology infrastructure, under direction of Cover Oregon," the exchange said in a statement.

An Oracle spokeswoman declined to comment.

Although there was no explicit statement that Oracle will not do any work on the exchange after the transition period, Cover Oregon said it plans to convene a group to recommend solutions for the exchange's many problems.

(Read more: As deadline nears, Obamacare fans hard to find)

That group, made up of private technology experts and others, will weigh whether Cover Oregon should retain Oracle's technology and contract with a different developer or incorporate "technology from other states or the federal exchange." It is possible that Oracle could be retained.

Cover Oregon, whose director resigned in January for health reasons in the midst of blistering criticism about the exchange, has suffered additional bad news in recent weeks.

On Feb. 13, an Oregon congressman and other legislators asked the Government Accountability Office to launch a probe of Cover Oregon, noting that the federal government had issued $305 million in grants to the exchange to build, test and operate its Obamacare marketplace.

"The catastrophic breakdown of Cover Oregon is unacceptable and taxpayers deserve accountability," Rep Greg Walden, R-Ore., and other leaders of the House Energy and Commerce Committee wrote the GAO.

(Read more: Find uninsured? Forget the ER. Ask the tax man )

Late last week, it was reported that almost 4,000 undocumented immigrants who had applied for an Oregon-run pregnancy services program had instead been enrolled in the state's Medicaid program because of technical problems with Cover Oregon's exchange. The enrollment violates federal law and is in the process of being unwound, officials said.

Also last week, the Obama administration announced a rule change that was designed to help residents of states with troubled Obamacare websites, including Oregon, Maryland, Massachusetts, Hawaii and Nevada, pay for insurance they bought outside those exchanges in frustration with the sites' problems. The rule change could, if adopted by the states, allow people who had bought nonexchange plans to obtain federal tax credits to help pay for that insurance if they were unable to get their eligibility for those credits determined by the websites. The fix is the first time that Obamacare subsidies will be allowed for nonexchange plans.

Despite its continued inability to enroll people online, Cover Oregon has managed to sign up about about 123,000 people. About two-thirds have been in the Oregon Health Plan, the state's Medicaid program, with the rest in private Obamacare plans.

Those numbers have put Oregon in the middle of the pack for Obamacare sign-ups in all 50 states and the District of Columbia.

However, because of its website woes, Oregon has asked the federal government for a month-long extension of the open enrollment period for Obamacare plans, which is now due to close March 31.

By CNBC's Dan Mangan. Follow him on Twitter @_DanMangan.

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