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CMS official on disaster: Lesson learned

By Darius Tahir
Posted: July 31, 2014 - 4:00 pm ET

Responding to a scathing review of the Obama administration's handling of last year, new CMS Principal Deputy Administrator Andy Slavitt told lawmakers Thursday that the administration is better prepared to avoid and respond to technology problems when a new wave of consumers floods the site this fall.

Slavitt, appearing before a subcommittee of the House Energy and Commerce Committee, said the administration is improving information that users receive regarding plan options and affordability; improving automation on the backend and consumer-facing sides of the site; and changing the relationship between the contractors and the agency that manages them.

A day earlier the Government Accountability Office issued a report detailing the administration's failures to manage the contractors building and rolling out the enrollment portal. The report called on the CMS to develop better surveillance plans, provide better direction and oversight regarding contractor responsibilities, and ensure that the agency's governance board overseeing such projects do a better job overseeing contractors.

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“They have the tools in place,” said William Woods, GAO's director of acquisition and sourcing management, who testified during the same hearing. “They just didn't use them.”

Woods specifically pointed to 40 instances in which CMS employees changed contract requirements without authority to do so, likely because of the deteriorating state of the project. Woods said the agency knew in spring 2013 that only 65% of the website would be complete by the go-live date. They grew “increasingly concerned that the deadline would not be met” as the year progressed.

Pressed, Woods said he could not answer who knew what when and therefore couldn't say whether CMS officials lied under oath in the fall of 2013 when they said the websites would be ready by Oct. 1. Still, the management problems contributed to a new estimate of the price tag. As of March, HHS had spent $840 million on the exchange website. And while the CMS has made some changes addressing its problems, Woods said, the agency has not sufficiently explained why its new contract with Accenture has seen cost increases.

Slavitt joined the CMS this year from UnitedHealth's Optum division, which includes QSSI, a contractor that worked on backend components of the enrollment system and was called in to spearhead the effort to salvage the site last fall. He acknowledged that the changes will not completely solve the website's problems and that the agency would “manage risks.” “I expect it won't be perfect,” he said.

Looking toward the 2015 enrollment period, which begins Nov. 15, Slavitt said the agency would be more “focused and disciplined” and would add features more judiciously. Last year, he said, the site was perhaps too ambitious for its own good, Slavitt argued.

While officials considered allowing patients to search for insurance plans include their doctor in the provider network, it “didn't make the cut this year.” The agency is instead encouraging insurers to link to lists of doctors that their plans cover, though he conceded those lists may be out-of-date. A customer's best bet, he said, might be simply to contact the insurer or provider directly.

To prevent cost overruns, contractors will now have “skin in the game,” Slavitt said, and there's now “daily incentive management” and daily warnings.

The website will also feature increased automation—a re-enroll function has been added, for example—and the agency is working on the backend inconsistencies in applications and payments to insurers.

A recent report from HHS' inspector general pointed to nearly 4 million inconsistencies between information on customers' applications and information in federal databases. Republicans on the committee raised concerns that some consumers will receive subsidies they don't deserve while others will have nasty surprises in tax season.

Slavitt said half the inconsistencies were due to changes in income. The agency has resolved roughly 425,000 of the other 2 million, and more than 90% are in favor of the consumer, he testified. Individuals should update their information on the website when their income changes, which will, in turn, change the levels of subsidies and premiums expected, Slavitt said.

“What we're learning is that a certain number of these data inconsistencies are a fact of life,” Slavitt said, adding that software upgrades will help address the issue.

Republicans also have raised concerns about the security of the information consumers share through the enrollment portal. Slavitt declined to provide a detailed description of how the security team is monitoring the databases. To the best of his knowledge, he said, there have “been no successful malicious attacks or compromised information,” he said.

The GAO's Woods affirmed that the government has not detected any breaches, but revealed that a report from his agency would be forthcoming on the subject of security.

GAO has a number of ongoing investigations, and Woods says another report on information technology management should arrive by the end of the year.

Follow Darius Tahir on Twitter: @dariustahir

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