Health Insurance Marketplace Contractors Say Systems Will Be Ready to Operate Oct. 1

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By Sara Hansard  

Sept. 10 --Four health information technology contractors building the online health insurance marketplaces that the federal government will operate in most states told a congressional panel Sept. 10 that the systems they are working on will be ready Oct. 1, when the marketplaces are scheduled to open.

However, Brett Graham, a partner and managing director of consultant Leavitt Partners LLC, told the House Energy and Commerce Health Subcommittee that “there is not a single state that is completely ready,” and “most, if not all the exchanges will experience a rocky enrollment period.” The marketplaces under the Affordable Care Act are also known as exchanges.

Cheryl Campbell, senior vice president of CGI Federal Inc., which was selected in September 2011 by the Centers for Medicare & Medicaid Services to design and develop the information technology application for the federally facilitated marketplaces (FFMs), said that although the CMS has modified its contract “task order” on “several occasions” in response to more detailed requirements as regulations and policy were better defined, “CGI Federal is confident that it will deliver the functionality that CMS has directed to enable qualified individuals to begin enrolling in coverage when the initial enrollment period begins on Oct. 1, 2013.”

All key milestones of FFM implementation have been achieved, including the initial architecture review in October 2011, the project baseline review in March 2012 and the operational readiness review in September 2013, Campbell said. In addition, in April, health insurers began submitting their plans to the system for review by the CMS, and consumers were able to register their accounts, she said.

FFMs in 34 States

States can operate their own state-based marketplaces, or participate in state partnership marketplaces with the federal government, or defer to the federal government to operate a FFM.

Seventeen states and the District of Columbia are expected to operate state-based marketplaces (SBMs), with one of the 17, Utah, operating only a state-based Small Business Health Options Program marketplace. That means the FFMs and partnerships for individual coverage will be operated in 34 states.

John Lau, program director for Serco Inc.'s $114 million base-year contract that was awarded by the CMS in July, said his company will provide support services to determine eligibility for the advance payment of premium tax credits for moderate- and low-income people buying health plans in the FFMs and SBMs and cost-sharing reductions through the marketplaces; for Medicaid; for the Children's Health Insurance Program; and for the Basic Health Program.

Lau said, “Our role is to support a process that is as efficient, accurate and protective of personal privacy as is technologically possible.” Two modifications are pending to Serco's contract, which may change the scope of the company's work, he said. “However, we are prepared to manage the estimated 6.2 million paper applications, representing about 30 percent of the total applications projected to be received between Oct. 1 and March 31 of 2014,” he said.

Serco is “on schedule to deliver all requirements for our contract,” Lau said.

Data Services Hub Will Be Prepared

Michael Finkel, executive vice president for program delivery at Quality Software Services Inc. (QSSI), said his company is writing the software code for the FFM data services hub. QSSI is owned by health care technology company Optum, which is a subsidiary of health insurer UnitedHealth Group Inc. “We expect the data services hub will be ready for CMS to operate as planned on Oct. 1,” he said.

QSSI has completed software coding for the data services hub for all functionality required for Oct. 1, and it is continuing performance and integration testing, Finkel said. “We have connected the data services hub to the databases at the key federal agencies that will be used for verifying information,” and it has connected the hub to the system that will transfer data to and from health plan issuers, he said.

The data services hub will handle information to verify information on consumers, such as citizenship, Finkel said. Enrollment data, such as name, address, and premium amount, will be transferred through the hub to the health plan chosen by the consumer, he said. The hub will not determine consumer eligibility for assistance, nor will it determine which health plans are available in the marketplace, and it will not handle personal medical records, he said.

“It is important to keep in mind that CMS owns and will operate the hub,” and the agency will continually monitor it, Finkel said. The hub recently underwent an independent security risk assessment by the CMS's security assessment contractor, the Mitre Corp., he said. The assessment has not identified any issues that would prevent the agency from launching the hub Oct. 1, he said.

State-Based Marketplaces Not Ready

But Graham, whose firm advises clients on the marketplaces and has been involved in developing private and public sector marketplaces, said SBMs are not fully ready for open enrollment three weeks away.

“In an ideal world states would be well into their outreach and education campaigns, with all of the exchange operations and functionality fully tested and completed,” Graham said. “In the current situation, however, uncertainty and doubt still surround how functional these systems will be on Oct. 1,” he said.

“A very baseline functionality of state-based exchanges will be up and running on Oct. 1,” Graham said. However, many states have had to “de-scope the capabilities they planned,” which will affect consumers.

Several states have expressed concern to Leavitt Partners about using the federal data services hub, and where possible are planning to use their own data resources for verification in the marketplaces, Graham said.

“There are also serious concerns regarding security of the hub's data,” Graham said. He cited a recent report by the Office of Inspector General finding that any additional delays in completing security authorization would result in an incomplete assessment of system risks and needed security controls.

States have not been able to devote the necessary resources to outreach and education, Graham said. “A lack of information, and a high potential for misinformation, will increase the likelihood for error, increase the possibility consumers will select suboptimal products, and possibly result in a delayed enrollment.”

“Very few states will have a comprehensive working exchange on Oct. 1,” Graham said. Graham's company was founded by former HHS secretary Michael Leavitt.

Sparring Over Inquiry to Navigators

Members of the subcommittee sparred over a letter sent by the Energy and Commerce Committee Republican leadership to 51 navigator groups that have received federal grants to conduct outreach and enrollment assistance for the marketplaces.

Subcommittee ranking member Frank Pallone Jr. (D-N.J.) called the inquiry letter “despicable. This is an egregious abuse of the committee process, and an attempt by Republicans to intimidate community organizations and overwhelm them with information requests at a critical period so that they don't implement the program.”

The Democratic staff of the Energy and Commerce Committee released a memo on what it said was the committee's investigation of ACA contractors Sept. 10. Committee ranking member Henry Waxman (D-Calif.) said the investigation found that the contractors and the CMS have “numerous systems in place to secure the privacy of consumer information," and the contractors are on track to complete their work by Oct. 1.

Rep. Michael Burgess (R-Texas) said that the inquiry is a necessary part of the committee's oversight function. “Why wouldn't we have questions about the vast sums of money that have been pushed out the door relatively hastily to these navigator groups? Why wouldn't we have questions as to their credentials [and] as to their ability to provide what they've been required to provide?”

To contact the reporter on this story: Sara Hansard in Washington at

To contact the editor responsible for this story: Janey Cohen at

The Democratic memo is at More information on the hearing is at