GAO report cites lack of planning, oversight for Healthcare.gov

Lapses pushed costs to $840M
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HealthCare.gov was developed without effective planning or oversight--and unless the Centers for Medicare & Medicaid Services takes steps to improve contract management and governance, upcoming open enrollment periods could face problems, according to a report released today by the Government Accountability Office.

Problems with the federal health insurance marketplace have become the stuff of legend. In December, the Obama administration assured problems that plagued the disastrous roll-out had been resolved. In April, there were reports that critical functions--including a process to pay insurers--were still missing. And in July, thousands of qualified consumers still were without proper health insurance coverage

The GAO reviewed task orders for CGI Federal Inc. and QSSI Inc., which developed the marketplace and the federal services data hub, respectively. It also evaluated the contract awarded in January 2014 to Accenture Federal Services to continue FFM development and enhance functionality.

According to the report, despite the complexity of developing "a first of its kind marketplace," contractors faced a compressed timetable, changing requirements and began the task without having key pieces of information--including the number of participating states and the number of potential enrollees.

The report also criticizes CMS's decision to use a risky cost-plus-fixed-fee contract.

Rising costs, sluggish timeline

As of early 2014 the GAO placed the total cost of HealthCare.gov at a whopping $840 million. Between September 2011 and February 2014, the cost for building the marketplace increased from $56 million to $209 million. Data hub costs rose from $30 million to almost $85 million.

At the time, CGI was running far behind its schedule. In August 2013, just two months before the marketplace rollout, CMS continued to press the Oct. 1 deadline.

Meanwhile, key governance reviews were delayed to just weeks before the marketplace launch--CMS launched the site without making sure it would perform adequately, according to the report, released during a meeting of the House Energy and Commerce Subcommittee on Oversight and Investigations.

The GAO report concludes with five recommendations for CMS:

  • Take immediate steps to assess and mitigate rising costs and delays in system functionality.
  • Ensure that quality assurance surveillance plans and other oversight documents are collected and used to monitor contractor performance.
  • Formalize the roles and responsibilities of contracting officer representatives and other personnel assigned contract oversight duties, including the limits of those responsibilities.
  • Provide direction to program and contracting staff about the requirement to create and execute acquisition strategies.
  • Ensure that information technology projects adhere to requirements for governance board approvals before proceeding with development.

To learn more:
- read the GAO report here (.pdf)

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