Federal prosecutors subpoena Oregon health agency in grand jury probe

PORTLAND, Ore. Tue May 20, 2014 9:28pm EDT

PORTLAND, Ore. May 20 (Reuters) - Federal prosecutors have subpoenaed documents from Oregon's health exchange agency as part of a grand jury investigation into how the state used federal money to set up the now-failed health insurance exchange, state officials said on Tuesday.

The Oregon Health Authority and Cover Oregon have received subpoenas from federal prosecutors asking for everything from power points, outlines and notes to emails between former state employees who left amid the controversial implosion of the state exchange.

"The agencies take this request seriously and will cooperate fully with federal officials. We will work collaboratively with the U.S. Attorney's Office to provide any and all information we have and make any and all staff available to assist," OHA and Cover Oregon said in a joint written statement.

FBI officials declined to comment and a spokeswoman for Gov. John Kitzhaber could not immediately be reached.

A state that fully embraced the Affordable Care Act, Oregon endured one of the rockiest rollouts of President Barack Obama's healthcare law, requiring tens of thousands of applicants to use paper forms since launching on Oct. 1.

The state decided in April to move the troubled state exchange to the federal system after realizing it would cost substantially more to try to fix the many technical glitches of the exchange that failed to enroll a single person online.

Several Cover Oregon officials, including two past directors of the program, have resigned in recent months amid an independent investigation ordered by the Governor's office that found mismanagement and a failure to report problems from the beginning.

The subpoenas request documents pertaining to information about representations that had been made about the status or functionality of the health insurance website during meetings.

Prosecutors also ask for all purchase orders, invoicing and statements of work by Oracle Corp, developer of the non-functioning website. The state has received roughly $300 million in federal grants and has paid Oracle about $134 million.

A separate congressional probe of Cover Oregon is also under way. (Editing by Dan Whitcomb and Ken Wills)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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