The back end of Obamacare’s federal
exchange—the guts of the system designed to communicate with and
manage payments to health insurers—still isn’t finished, despite
explicit promises from the administration that it would be finished
months ago.
A document posted by the administration yesterday lists
requirements for the next tech contractor to work on the federal
insurance portal, according
to Politico, which reports that whichever company
wins the next contract, which would begin when the administration’s
current contract with Accenture, the company that replaced the
original contractor CGI earlier this year, runs out in 2015, “is
also slated to help construct major back-end components of the site
that insurers need to get paid accurately.”
It’s the latest indication that the administration is having a
serious problem completing work on the federal exchange’s crucial
back-end payment systems.
Those systems were originally supposed to be ready last year
when the exchanges first went live, but development resources were
shifted when the project fell behind prior to its disastrous
October launch. In November of last year, a federal health official
responsible for Obamacare’s exchange technology admitted that
between 30 and 40 percent of the federal exchange system had
not yet been
built.
After the consumer end of the federal exchange began to work
better in December,
insurers began to openly worry that the back end systems would
not be ready in January 2014, as the administration had promised.
“We want to be paid,” one unnamed insurance executive told The New
York Times. “If we want to pay claims, we need to get
paid.”
But in December, Kathleen Sebelius, then the Health and Human
Services (HHS) Secretary, was adamant that the new systems would be
ready the following month. “The financial management system, which
is getting the insurance companies their money for accelerated tax
credits and cost-sharing, is due to go into effect in mid-January,”
she
told a congressional committee subpanel.
Sebelius was wrong. The back end systems weren’t
ready in mid-January. When the federal government switched
contractors from CGI to Accenture, it said in a
document justifying the rapid award of a no-bid contract that
timely completion of the payment systems was critical.
“Failure to deliver” the payment functionality “by mid-March
2014 will result in financial harm to the Government. If this
functionality is not complete by March 2014, the Government could
make erroneous payments to providers and insurers.” If the payment
system is not complete, “the entire healthcare reform program is
jeopardized.” A missed deadline for completion could
“potentially [put] the entire health insurance industry at
risk.”
The back-end financial systems were not ready in March. They are
still not ready now. Insurers are relying on quasi-manual
workarounds instead. And in April, the administration, which
refused to answer direct question about the timeline for completion
of the back end financial management systems,
indicated in a document that the workarounds would last at
least until September.
Incomplete work on back-end systems also appears to be affecting
the federal exchange’s ability to verify income and citizenship for
people who apply for coverage. A June report from the HHS Inspector
General found more than
2.9 million inconsistencies in federal exchange applications as
of the end of February, a figure that grew to
4 million at the end of May. Serco, the contractor charged with
processing those inconsistencies, has blamed delays in the
“eligibility support desktop (ESD) functionality” that was supposed
to deal with eligibility verification problems. Former HHS Sec.
Sebelius
certified in January the the exchange’s eligibility
verification systems were working.
The newly posted contracting requirements seem to suggest that
the administration now believes construction of the financial
systems won’t be complete this year at all, and will carry over to
whichever tech contractor gets the job when Accenture’s deal runs
out.
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