The contract notice announcing the move said, “Given the criticality of the period leading up to and through the open enrollment, CMS determined that the risks from potentially having to transition to a new contractor during this period were too great, and could result in an unsatisfactory user experience for consumers.”
Sens. Orrin Hatch (R-Utah) and Chuck Grassley (R-Iowa) in June expressed concern about keeping QSSI as a contractor, since it is owned by Optum, a subsidiary of UnitedHealth Group.
“UnitedHealthcare, one of the nation's largest providers of health plans, is participating as an insurer in 10 state exchanges, and may expand into the federal marketplace in 2015,” a June 19 letter to CMS Administrator Marilyn Tavenner says. “Given the role of its fellow UnitedHealth Group subsidiary, we have serious questions about any conflicts of interest that may exist between the two entities.”
Specifically, they were curious as to what both the CMS and UnitedHealth Group were going to do to prevent any impropriety.
Potentially raising more conflict-of-interest issues, hours after the letter was sent, Andrew Slavitt, former group executive vice president of QSSI parent Optum, joined the CMS as its principal deputy administrator.
A month after Slavitt joined CMS, UnitedHealth Group announced plans to compete for customers in up to two dozen health insurance exchanges during the 2015 open-enrollment period, which is twice as many markets as the country's largest insurer sold products in during the initial enrollment period that ended earlier this year.
Regarding Slavitt, CMS said that “Andy Slavitt has taken all appropriate steps, such as severing financial ties with his former employer, which allow him to execute his duties as principal deputy and participate in broad policy matters, including those affecting the healthcare industry.
“He will be recused, as appropriate, from participation in specific party matters, such as contracts or claims, involving his former employer. However, the terms of the limited waiver ensure that Andy will be able to continue to interact with all of the contractors as needed so the marketplaces will be ready to enroll millions more Americans into quality, affordable coverage.”
While Accenture handles day-to-day operations of the website, QSSI has multiple secondary roles, including overseeing the process of connecting multiple government agencies to streamline verification of consumer information like Social Security numbers and immigration status when Americans log into the federal exchange and apply for subsidies.
In the new contract notice signed off on by senior CMS officials Sept. 17, the agency praised QSSI for increasing the site's capacity, allowing for 150,000 simultaneous users, up from 5,000 when HealthCare.gov launched.
The firm is also now heavily involved in supporting the rollout of the Small Business Health Plan Options (SHOP) Marketplace, which was supposed to launch last fall but was delayed until the second enrollment period.
The contract will now last through March 2015, an extension valued at $24.2 million. If the CMS hires another contractor at that point, an additional “optional transition period” provision will occur, extending the contract through June 30. The value of the secondary extension is $4.8 million. Since becoming a contractor on HealthCare.gov in 2012, QSSI has been paid more than $90 million, according to federal data.
The decision comes just weeks after the CMS extended the contract of the federal marketplace's lead contractor, Accenture, for an additional six months.
Requests for comment from Optum were not immediately returned.
Follow Virgil Dickson on Twitter: @MHvdickson