(Story updated Aug. 11, 2015)
The CMS has picked veteran federal contractor Booz Allen Hamilton to replace Optum subsidiary QSSI as the key contractor on HealthCare.gov. The five-year contract is worth $202 million.
But the Obama administration will temporarily stick with Optum's Quality Software Services Inc. as its quality tester for the federal insurance marketplace because two failed bidders are protesting the choice of Edaptive Systems to assume that role.
Tantus Technologies and HIT Venture filed protests with the Government Accountability Office. The agency said it would respond to the protests by Sept. 14.
The CMS said in a contract notice Monday that it needs QSSI to maintain its quality testing role because it will take some time to resolve the award protests, creating “an untenable gap in effort for the ongoing marketplace support that needs to continue for a successful 2016 open enrollment which starts November 1, 2015."
The administration asked QSSI, a division of UnitedHealth Group's Optum, to take the reins of HealthCare.gov after its disastrous launch in October 2014.
The complex job of leading the work on the federal marketplace as systems integrator involves coordinating the work of many subcontractors managing tasks across several federal agencies, state Medicaid agencies, state-based exchanges and health insurance issuers.
“Successful systems delivery requires a broad range of technology capabilities, an intimate understanding of a client's mission, and a sensitivity and awareness to the management challenges of organizational adaptation and adoption,” Gary Labovich, an executive vice president for the company, said in a state announcing the award.
Dan Schuyler, an expert in health insurance exchange technology at the consulting firm Leavitt Partners, said he's not surprised the CMS selected Booz Allen Hamilton given the scope of the project and company's deep presence in federal contracting and health IT work.
It is unusual, Schuyler said, for losing bidders to contest the results. “It doesn't make a contractor look good, and most don't want to put in the time and money.”
An attorney representing HIT Venture, one of the companies protesting the testing contract, said the company believes there is a conflict of interest involving one of Edaptive's subcontractors. Rhian Thompson, chief operating officer for Tantus, declined to explain the company's complaint but said it was different from HIT Venture's.
The extension of the testing contract is worth as much as $8 million for QSSI and will last as long as eight months, ending after the close of the third open-enrollment period.
“Several marketplace subsystems have critical milestones leading up to open enrollment,” the CMS says in the extension notice.. “The marketplace testing contractor is critical to coordinating and ensuring successful enrollment processing” for insurance issuers and consumers.
In May, Optum said it was no longer interested in working on the enrollment portal “having achieved the goal of making HealthCare.gov a stable, reliable platform for people seeking health coverage.” Optum declined to comment for this story.
Some Republican lawmakers have suggested there are conflicts of interest surrounding the Optum contract because acting CMS Administrator Andrew Slavitt worked for Optum before joining the CMS in July 2014.
In April, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Senate Judiciary Chairman Chuck Grassley (R-Iowa) sent a letter to HHS Secretary Sylvia Mathews Burwell questioning the lack of transparency over how the CMS managed potential conflicts of interest regarding Slavitt and his former employer.
The CMS has responded that Slavitt severed all financial ties with the company and has recused himself from matters involving his former employer.
Last month President Barack Obama nominated Slavitt to officially assume leadership of the CMS. The Senate has yet to schedule a hearing on the nomination.
(Correction: An earlier version of this story incorrectly indicated that the protests and extension involved the lead systems-integrator contract.)
