FBI probing Oregon's Obamacare exchange: Reports


The Federal Bureau of Investigation is examining Oregon's disastrous Obamacare health-insurance exchange, possibly in connection with its use of federal funds to build the online marketplace, according to several media reports.

Several people, including a former Republican state legislator who in 2012 notified the FBI about possible wrongdoing related to the exchange, have reportedly been interviewed recently as part of that probe.

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Source: Cover Oregon

The ex-lawmaker, Patrick Sheehan, told local Oregon media that he contacted the FBI in late 2012 and told officials about an allegation that the federal government was given misleading information during a so-called "gate review" of Oregon's exchange by the federal government. Such reviews check the readiness of a project receiving federal money.

"I'm not a lawyer and I can't definitely say it was criminal," Sheehan told Portland's Oregonian newspaper in a story published in February. "But I believe that if it's true, it was fraud, and it was fraud used to gain the next phase of federal funding. I have no way of substantiating this and that's why I sent it to the FBI."

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The FBI inquiry was revealed last week by a Oregon TV station KATU and the Oregonian, and corroborated Sunday night in a report in the Wall Street Journal.

The Oregonian has noted that Oregon's state health department "was able to pass federal reviews despite making little progress in its first year of work after winning a $48 million federal grant in February 2011." The newspaper also reported that, "The state initially promised the federal government to build a functioning exchange by February 2013."

The state's Cover Oregon insurance marketplace—which has been awarded more than $300 million in federal funds—also is being eyed by the inspector general's office of the U.S. Health and Human Services Department, the Government Accountability Office and an oversight committee of the U.S. House of Representatives.

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Cover Oregon is considered to be among the worst-performing Obamacare exchanges in the country. The exchange, whose lead contractor was Oracle, was unable to enroll a single person in on online session, and instead had to rely on various workarounds to sign up people for health insurance plans.

Cover Oregon's board voted late last month to turn over private Obamacare insurance plan enrollment responsibility to the federally run exchange HealthCare.gov.

Oregon was one of 14 states which, along with the District of Columbia, ran its own exchange to sell competitively priced health insurance plans to individuals to help them comply with the Obamacare mandate that nearly all Americans have some form of such insurance this year or pay a tax penalty.

—By CNBC's Dan Mangan.