Oregon insurance website project was halted over bidder-consultant connection, records show

State officials used a consultant named Duane McKee for most of the year to advise them on development of a high-profile state health insurance shopping website project — only to scrap the contract process to hire a vendor after receiving evidence McKee had a business relationship with one of the companies that was bidding.

The picture painted by emails and other documents obtained under Oregon Public Records Law sheds light on the Oregon Health Authority’s decision last month to suddenly and mysteriously cancel contracting work on its legislatively mandated “marketplace” website project, four months after the process launched to evaluate bids.

At the time of the cancellation, the two top bidders were British consultant Deloitte LLP and California-based VIMO, doing business as GetInsured.

The state's consultant, McKee, formerly worked for a similar state marketplace website in Pennsylvania. He told The Lund Report he “stands by” the disclosure form he signed for Oregon in August stating he had no conflict of interest.

McKee otherwise declined to answer questions from The Lund Report about the extent of his relationship with GetInsured or whether he’d informed anyone at the Oregon Health Insurance Marketplace about his apparent affiliation with the company. 

After The Lund Report wrote about the contract’s cancellation, Debbie Dennis, Deputy Director and Chief Administrative Officer of the state Department of Administrative Services, which oversees procurement, said in an interview 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.”

Citing the new contracting process launched in late November, Oregon Health Insurance Marketplace program director Chiqui Flowers on Thursday declined to answer questions about what she'd known when about a relationship between GetInsured and her team's consultant, McKee. 

 Marissa Schwartz, the public relations director for GetInsured, declined to answer questions but issued a general statement.

“GetInsured always operates with the highest standards of integrity,” she wrote in an email, “and we respect and support Oregon's decision to take any administrative actions necessary to ensure the fairness of this important procurement process.”

Regardless, the turn of events came as the state was already on a shortened timeline to get the work done. 

Now, having lost nearly five months, the timeline is much  tighter.

New effort overcame ‘stigma’ of previous attempt

The contracting process was intended to equip Oregon with a “marketplace” website controlled by the state where individuals and families who are not on Medicare or employer-based insurance could compare plans and purchase their own insurance.

 Those with qualifying incomes receive federal tax credits to reduce monthly premium costs.

For a decade, Oregon has used a portal to connect to the federal  marketplace rather than use its own state-based website. The decision stemmed from the high-profile implosion of the state’s first attempt to set up the “Cover Oregon” website using federal funding.

The earlier $300 million technology project was scrapped amid findings of poor state contracting and oversight as well as substandard work by the vendor, Oracle America.

For at least five years the state program overseeing Oregon’s connection to the federal marketplace has been pushing to again have Oregon build its own website as 19 other states have done. But officials wrestled with what one called the “stigma” left by the Cover Oregon debacle.

Last year, lawmakers finally approved the move based on supporters’ arguments and Oregon Health Authority testimony. The federal marketplace is not user-friendly, backers of the idea said, and flexibility and more control could help the state boost coverage, equity and improve affordability and care, among other things.

Consultant was highly involved in Oregon process

Records show that Oregon officials hired McKee to help them shape the project, then asked him to evaluate bids.

After bidding opened on July 3, he worked with Flowers' team to frame interview questions for the bidders, answer questions submitted by the bidders, and craft scenarios for bidders to address during demonstrations.

On Aug 29, he signed a conflict-of-interest form informing him that as a member of the evaluation committee on the project, he was subject to Oregon ethics laws.

The form informed him that he had to inform the state of a conflict “when participating in official action” which could result in “a financial benefit or detriment” to a business with which he was associated.

On Oct. 22, an executive with Deloitte called a state contracting official to alert her to a potential conflict involving McKee, records show.

“Mr. McKee, who we saw was invited to oral presentations, was also named as personnel on a recent bid proposal by GetInsured in Illinois, which GetInsured ultimately won. Therefore, Deloitte has concerns that Mr. McKee is or was a paid advisor for GetInsured,” the Deloitte executive wrote in an email the following day. She asked whether the state took any steps to address the potential conflict.. “Did Mr. McKee or GetInsured disclose this relationship to [the state]? If so, how and when?”

Deloitte provided a document submitted by GetInsured to the state of Illinois in July 2024 listing McKee as part of a team of “notable” and “renowned” advisors to GetInsured who would support the company's work, noting McKee's marketplace experience.

Contacted by The Lund Report, a spokesperson for Deloitte declined to comment, citing the new contracting process launched by the state.

Dennis, at the state Department of Administrative Services, said that the state did not investigate to confirm an actual conflict existed involving McKee. “Due to the timing and the need to move quickly,” she said, “it seemed better to cancel and make some adjustments and restart.” 

State moved fast after learning of conflict

Officials at Dennis’ department on Nov. 6 confirmed that GetInsured had listed McKee in its Illinois bid application in July. Records released by her agency and the health authority don't confirm what McKee did for GetInsured, if any.

On Nov. 12, a health authority analyst emailed the agency’s contracting office citing “an urgent need to terminate” a contract, attaching the one used to hire McKee.

Minutes from a Nov. 14 meeting of state officials said that “Internally there was a conflict of interest that was identified in regards of one of the evaluators. His contract has been cancelled.”

The website contracting was cancelled, too. On Nov. 15, news of the cancellation was contained near the bottom of an Oregon Health Authority newsletter.

 While McKee stands by his earlier statement, he wrote to The Lund Report, he added that he supports “the state's decision to, out of an abundance of caution, cancel and re-issue their [contracting process]. I wish Oregon nothing but success as they move forward with this important initiative.”

Said Dennis, the state is working to “obtain a solution as quickly as possible through a process that is competitive and fair.”