• ObamaCare Contractor Faces Mid-March Deadline or Disaster

    Posted on January 30, 2014 by in Breaking News

    Life Insurance, Medicare, CJB InsuranceThe Hill by Jonathan Easley –

    January 18, 2014:

    If the ObamaCare contractor brought on last week to fix the back-end of the HealthCare.gov portal doesn’t finish the build-out by mid-March the healthcare law will be jeopardized, according to a procurement document posted on a federal website.

    It says insurers could be bankrupt and the entire healthcare industry threatened if the build out is not completed.

    The procurement document signed by healthcare officials in late December says that the government determined in mid-December that CGI Federal, the contractor originally tasked with connecting the online healthcare portal to insurers, is not up to the task.

    The Centers for Medicaid and Medicare Services (CMS) announced last week it was firing CGI Federal, and bringing on Accenture to finish the website.

    The document says officials realized in December that the need to bring on Accenture is so urgent that there is no time to go through the “full and open competition process” before awarding them with a $91 million contract.

    “There is limited time to build this functionality and failure to deliver…by mid-March 2014 will result in financial harm to the government,” the document says.

    “If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers,” it continues. “Additionally, without a Financial Management platform that accounts for enrollments and associated program costs that integrates with the existing CMS Accounting platform, the entire healthcare reform program is jeopardized.”

    Many of those who have signed up for ObamaCare are eligible for federal subsidies, which the government pays directly to the insurers. The document says that failure to complete the project by mid-March can result in “inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers.”

    On Thursday, Gary Cohen, the director of Medicare’s Center for Consumer Information and Insurance Oversight, told the House Energy and Commerce Oversight Subcommittee that the government would start paying insurers as soon as next week based on estimates of the federal subsidies owed to them.

    Cohen said that “because we don’t have full functionality” of the website that the government was using a workaround, and that the automated payment system would be ready “in the next months.”

    While Cohen did not give a timetable for the project, he said that a stopgap system would pay insurers next week based on calculations of what they are owed.

    However, the back-end problems extend beyond federal subsidy payments. According to the document, the system is vulnerable to “inaccurate forecasting” of the risk mitigation programs in place to pay insurers who enroll a higher-than-expected number of sick patients with expensive bills, “potentially putting the entire health insurance industry at risk.”

    By mid-March, Accenture must build a financial management platform that tracks eligibility and enrollment transactions, accounts for subsidy payments to insurance plans, “provides stable and predictable financial accounting and outlook for the entire program,” and that integrates with existing CMS and IRS systems.

    Accenture will also have to clean up some aspects of the project that CGI failed to complete, such as the notorious 834 enrollment transmissions to insurance companies that in October and November were transmitting inaccurate and garbled data.

    In November, CMS deputy chief information officer Henry Chao told lawmakers that 30 percent of HealthCare.gov was still under construction, but the specifics and consequences remained murky.

    In its “tech surge” effort, the Obama administration focused on fixing the consumer-facing side of HealthCare.gov and stemming the tide of criticism that engulfed the White House last fall.

    This choice was seen as pulling attention from parts of the system where technical problems were serious but less obvious.

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