OIG Study Highlights HealthCare.gov Early Missteps

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By Alex Ruoff

Feb. 23 — A federal oversight report released Feb. 23 confirms the government made “many missteps” in the development and implementation of the federal health insurance marketplace that, if repeated, could doom its future progress.

At the heart of the problem was a culture clash between developers working on the federal health insurance marketplace and established bureaucrats at the Centers for Medicare & Medicaid Services, which oversees HealthCare.gov, according to a report from the Department of Health and Human Services Office of Inspector General.

This rift between developers and CMS officials led to a leadership vacuum that caused more than a dozen early issues with the website to go unresolved, the report said.

The OIG report confirmed many of the issues analysts flagged shortly after HealthCare.gov launched and could signal some trouble for its upcoming updates and repairs, Paul Keckley, an independent health care researcher and former managing director of the Navigant Center for Healthcare Research and Policy Analysis, told Bloomberg BNA.

The federal health insurance marketplace is still being refined and upgraded, he said.

The launch of HealthCare.gov in 2013 has long been a target for opponents of the Affordable Care Act, who claim the problematic launch of the site was emblematic of the federal government’s inability to properly oversee changes to the health insurance market.

“We were never fully accepted by CMS as a whole,” an unidentified CMS official who worked on development of the site said in the report. “Every new program feels that way, but this was a special case. The objective was too different and not well understood at CMS.”

The two-year study by the OIG is the most exhaustive examination of the federal health insurance marketplace's development to date. The OIG examined development and maintenance of HealthCare.gov between 2010 and 2015.

Many of the issues raised in the OIG report were conceded by the CMS and outlined in a 2014 report by Senate Republicans.

Next Steps

Several states have reported having trouble confirming applicants' personal information, prompting concerns about errors on applications for health insurance .

Additionally, the CMS is still developing an automated financial management system for the website and improving how users can select plans on the site, the OIG said.

If developed improperly, the OIG said, these functions could compromise the accuracy of payments to insurers and the security of the site.

Republican Response

Republican lawmakers said the OIG report's findings are proof that the Obama administration was more concerned with launching the marketplace than ensuring it worked properly. The report showed that the Obama administration rushed development of HealthCare.gov and “put politics ahead of security,” Sen. Orrin Hatch (R-Utah) said in a statement.

“Today, the Obama administration’s own oversight chiefs confirm what has long been said by Republicans in Congress: the administration’s commitment to launching HealthCare.gov trumped known concerns about its security, integrity and workability,” Hatch said.

Sen. Chuck Grassley (R-Iowa) said the report showed how the CMS ignored advice from its own consultants and “papered over” lingering issues during development.

Lacking Leadership

HealthCare.gov began operating in 34 states in October 2013, but programming and hardware errors prevented the site from working for most Americans until December of that year. The CMS expanded the team responsible for maintaining the site and eventually replaced the contractor responsible for site development, the OIG report found.

The OIG report blamed much of the marketplace's early issues on an absence of clear leadership at the CMS. The agency put several officials in charge of the project, leaving no single person responsible for it, and saw regular turnover in key leadership positions, the OIG said.

“The project needed quick decision making and flexibility, made easier when a single lead entity is responsible rather than multiple entities with organizational layers,” the report said. “Effective project leadership would have enabled a comprehensive view across the project to better assess progress, identify problems, and determine priorities.”

Changes for CMS

The OIG made 10 specific suggestions for the CMS on managing the federal marketplace and the agency's broader system for overseeing IT development.

These suggestions include assigning clear leadership for IT tasks, simplifying agency processes and promoting continuous learning to allow IT projects to be altered when problems arise.

The CMS, in its official response to the report, said it had already started several initiatives meant to improve its management philosophy and IT strategy.

Washington's Marketplace

The OIG Feb. 23 released a separate report (A-03-14-03301) about security controls for the District of Columbia's health insurance marketplace.

The D.C. Health Link in 2014 didn't have proper controls for verifying applicants' annual household income or maintaining their personal data.

These controls are meant to verify whether applicants are eligible for federal insurance subsidies, the report said.

However, the lack of controls doesn't mean anyone was granted a subsidy or insurance coverage improperly, the report said.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com