CMS Says Year-2 Open Enrollment May Have ‘Bumps’

The Centers for Medicare and Medicaid Services (CMS) could take significant steps to improve the contract planning and oversight practices that led to the failed launch of Healthcare.gov last October, an official from the Government Accountability Office (GAO) testified today at a hearing of the House Energy and Commerce Oversight Subcommittee.  CMS was aware up to six months before the launch of HealthCare.gov that the portal for the Federally Facilitated Marketplaces (FFM) would not be ready for the July 2013 launch, according to the newly released GAO report, including estimates in the spring of 2013 that only 65 percent of the website would be ready for the October 1 launch.

While party talking-points over the flaws and benefits of the Affordable Care Act (ACA) were predictably recycled during today’s hearing, members on the Committee took bipartisan interest in improving the contract management and oversight practices that led to the website’s shortcomings.  GAO’s William Woods (testimony), Director of Acquisition and Sourcing Management, outlined the agency’s review of CMS’ contracting practices, and warned that future exchange open enrollment periods could falter like the first unless CMS improves its management of contractors.  “Unless CMS improves contract management and adheres to a structured governance process, significant risks remain that upcoming open enrollment periods could encounter challenges,” Mr. Woods warned in his opening statement.
 
CMS fell short in heeding the warning signs that the initial launch of the website would fail, according to Mr. Woods’ description of GAO’s analysis.  Indeed, he cited a June 2013 report on CMS efforts to establish the federal marketplace, which concluded that certain factors—such as the evolving scope of marketplace activities required in each state—suggested the potential for implementation challenges going forward.  Nonetheless, the Department of Health and Human Services (HHS) expressed confidence that marketplaces would be open and functioning, he testified.  But when Subcommittee Chairman Tim Murphy (R-PA) (testimony) and ranking member Dianna DeGette (D-CO) sought details about whether agency leaders such as CMS Administration Marilyn Tavenner and Center for Consumer Information and Insurance Oversight (CCIIO) Director Gary Cohen knew about the website’s imminent failure when they confidently testified before the Committee last fall—raising the specter of perjury with respect to their testimony—Mr. Woods explained that GAO could not confirm what information was known by any individual official.
 
While the second year of open enrollment “won’t be perfect,” according to Andy Slavitt (testimony), the Principle Deputy Administrator at CMS, the agency has taken extensive steps to improve their contract management the website will see “continuous and incremental” steps in improving marketplace implementation. Slavitt would not promise that the site will be “fully ready” in November, when people can start buying insurance plans for 2015, saying that “it’s a bumpy process at times.”  But the situation is “vastly different” from the rocky rollout last fall, and CMS is making improvements in a much less risky manner with frequent releases over the course of the summer.  Among the efforts being implemented at the agency, Mr. Slavitt said CMS is: (1) improving accountability within the agency, including a “redefined management priorities” and “top down accountability;” (2) improving communication with key contractors, and requiring “skin in the game”; and (3) building testing into the schedule, and “preparing to handle errors in a disciplined manner.”  Mr. Slavitt said that while improvements will persist, the website will not meet perfection because the agency is learning how to meet the unique needs of consumers for the first time. 
 
Also, in advance of today’s hearing, the Democratic staff on the Committee released new reports detailing the benefits of the ACA in every congressional district in the country.  These reports summarize district-specific data outlining information including: (1) individuals who were previously uninsured; (2) young adults retaining coverage on their parents’ plans; (3) individuals insured/who would be insured because of Medicaid expansion; (4) preventative services coverage; and (5) Medicare Part D drug discounts, among others.  Republicans, in turn, highlighted the potential for stark rate increases, problems with eligibility verification, and troubled back-end payment systems in their criticism of the law. 
 
If you are interested in a comprehensive summary of this hearing, please contact Shea McCarthy (smccarthy@thornrun.com).