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HealthCare.gov probe finds flaws

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Major flaws in managing HealthCare.gov contractors led to tens of millions of dollars in cost increases and contributed to the botched rollout of the federal Obamacare website last fall, according to a nonpartisan government investigator who will release a report to Congress Thursday.

The report also identifies ongoing challenges for the contractor hired to get HealthCare.gov into better shape after CGI, the original contractor, was replaced. Aspects of the website are still not fully finished, even though enough improvements were made to enable millions of people to sign up. Health and Human Services Secretary Kathleen Sebelius resigned and was replaced this spring with Sylvia Burwell.

CMS experienced significant cost increases and schedule problems “due primarily to changing requirements that were exacerbated by inconsistent oversight,” William Woods of the Government Accountability Office writes in testimony prepared for a House hearing on the oversight of Obamacare contractors.

Much of the history of the disastrously flawed start to Obamacare enrollment was dissected during congressional hearings but the report adds specifics about the mismanagement and details about the spending. It also shed light on the ongoing challenges. Accenture was hired to replace CGI with a no-bid one-year contract initially valued at $91 million but “has experienced cost increases” due to additional requirements put on the contractor to over $175 million, Woods said.

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A CMS Official, however, said the increase in the Accenture contract “should not be considered a cost overrun.” The official said, “This is additional functionality.”

Reviewing the period leading up the the Oct. 1 launch, Woods cited broad confusion about who had authority to make contracting decisions and that CMS improperly authorized spending add-ons totaling over $30 million.

“CMS undertook the development of HeathCare.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,” Woods said.

CMS reported spending a total of $840 million through March on the federal exchange. It fired CGI in January.The report said CMS paid all but about $270,000 — 2 percent of the $12.5 million in fees forwarded by CGI— despite its failure to complete many aspects of its work, according to Woods. CGI was responsible for large portions of the federal site, and its work is widely faulted for Obamacare’s disastrous rollout last fall.

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Woods will discuss the report at a hearing of the House Energy and Commerce Oversight Subcommittee on Thursday.

CMS says it has taken numerous steps to address the contracting oversight problems highlighted by the GAO and has instituted safeguards so that they won’t occur again....