The federal agency in charge of building the HealthCare.gov
insurance website suffered from poor management and skimpy scrutiny
of its contracts, a congressional watchdog is set to tell lawmakers
Thursday.
The Centers for Medicare and Medicaid Services "undertook the
development of HealthCare.gov and its related systems without
effective planning or oversight practices, despite facing a number
of challenges that increased both the level of risk and the need
for effective oversight," said William T. Woods, director of
acquisition and sourcing management for the Government
Accountability Office, in testimony planned to be delivered before
a House panel Thursday. The office is also releasing a report with
its findings.
The federal government had committed around $840 million to the
building of the site and its systems as of March 2014, the watchdog
reported.
Mr. Woods warned in the prepared remarks that if the agency
doesn't improve its contract management and governances process,
"significant risks remain that upcoming open enrollment periods
could encounter challenges."
The problems of HealthCare.gov have been extensively reported
since the federal government opened the website in October to sell
insurance plans under the Affordable Care Act. Still, the official
conclusions are likely to further fuel debate ahead of November's
midterm elections, and as the Obama administration scrambles to
finish and revamp the site in time for the next enrollment
season.
"CMS incurred significant cost increases, schedule slips, and
delayed system functionality for the [site] and data hub systems
due primarily to changing requirements that were exacerbated by
inconsistent oversight, " according to the testimony.
The $840 million includes funds for CGI Federal Inc., the first
contractor tasked with developing the main parts of the site, and
some of the money that will go to Accenture Federal Services Inc.,
which was given the contract to take over in January.
"Accenture is delivering all of our work for CMS on time and on
budget. As the GAO noted, the increase in contract value is a
result of CMS assigning Accenture additional work," said Accenture
spokeswoman Joanne Veto.
A spokeswoman for CGI Federal Inc. didn't immediately respond to
a request for comment.
The watchdog said the Obama administration wanted to withhold
payments to CGI in August 2013 but ultimately decided to work with
the contractor to try to get the site ready for its fall launch.
The GAO also said the initial contract with Accenture had been for
$91 million but had already grown to $175 million by June 2014 due
to additional requirements--and key components, including a
financial-management model, were still not ready.
Senior CMS officials who had seen a draft copy of GAO's full
report on HealthCare.gov's woes said they agreed with most of the
watchdog's recommendations. They said the agency is taking several
steps to improve, including offering training in areas such as
strategic planning, reorganizing its management structure and
hiring private-sector executives.
Among the newcomers is Andy Slavitt. He is the former group
executive vice president at Optum, a business unit of UnitedHealth
Group and the parent company of Quality Software Services Inc., the
contractor picked to lead the cleanup effort for HealthCare.gov. He
is now a deputy principal administrator at CMS.
That isn't likely to appease congressional Republicans running
the hearing tomorrow, where the GAO testimony will be delivered.
Mr. Slavitt is also due to appear.
"The Obama administration was not up to the job, and American
taxpayers are now paying the price," said Tim Murphy (R., Pa.),
chairman of the House Energy and Commerce Committee's oversight
panel. "Despite repeated assurances to our committee that
everything was "on track," it turns out it was on track to
disaster."
Write to Louise Radnofsky at louise.radnofsky@wsj.com
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