Running Head: Healthcare.gov: Management Nightmare

Healthcare.gov: Management Nightmare
John Kincaid
Webster University

Abstract
For many Americans the Affordable Care Act, or Obamacare, represents a chance to purchase health care that they were otherwise unable to attain. For many more it represents the US Government mandating that they must have health insurance or face increasing fines for not doing so. Whatever the basis is for one’s preference for national health care coverage, the fact remains that the face of Obamacare, Healthcare.gov, failed spectacularly when it was launched late last year. A paltry percentage of people were able to actually use the website as intended with most not being able to choose from the offerings, much less even log into the site.
While there are many reasons why the launch failed and many more speculations, this paper is intended to look at the procurement and vendor management processes that the Centers for Medicare and Medicaid utilized when procuring services from commercial entities. The inherent failure of these processes and the structure that allows a large project to proceed without directly assigning responsibility will also be looked at.

Introduction On March 23, 2010 President Barack Obama signed into law the Patient Protection and Affordable Care Act (PPACA), otherwise known as Obamacare. The law’s intent is to provide health insurance coverage to millions of uninsured Americans through new private insurance marketplaces, called exchanges, as well as an expansion of Medicaid. It also allows children up to the age of 26 to remain on their parent’s policy and removes lifetime coverage caps as well as prohibits denial of coverage for pre-existing conditions.
In April of 2010, an office to build the exchange was established directly within the Health and Human Services (HHS) department in order to manage the project. This office was moved in early 2011 to multiple locations under the control of the Centers for Medicare and Medicaid Service (CMS). Grogan (2011) cites HHS Secretary Kathleen Sebelius claim that the move was to utilize CMS expertise as well as administrative savings. The initial scope of the Healthcare.gov website had to interface with several different federal agencies, states that built their own exchanges, as well as hundreds of insurance providers. It also serves as the exchange for 36 states that opted not to build their own exchanges. There were 60 separate contracts with 33 different vendors related to developing and operating the Healthcare.gov website and the backend systems that support it.
Healthcare.gov Background The intent of the PPACA is to provide healthcare insurance to millions of Americans who would otherwise be ineligible or unable to purchase on their own. It also is supposed to curb unsustainable rising healthcare costs by creating larger pools of customers to help spread those costs among all involved. In order to accomplish these goals, the law mandates the government to create a marketplace exchange to accommodate consumers, issuers, and federal agencies. This marketplace exchange has a public facing Website called Healthcare.gov that is the entry point for the entire system. Nearly every news organization in America agrees that the PPACA is the president’s signature legislation. Perhaps the most important aspect of this legislation is the Healthcare.gov website along with all of the backend systems that feed it. One would logically believe that the importance of developing and operating the entire system would be of the highest priority. Goldstein and Eilperin (2013) reported that the President himself had stated in several staff meetings from as early as the spring of 2012, “All of that is well and good, but if the Web site doesn’t work, nothing else matters.” That same level of importance did not appear to flow down to the people who were tasked with building the system.
HHS Role and Function Shortly after PPACA was signed into law, HHS created an internal office called the Office of Consumer Information and Insurance Oversight, OCIIO, to manage the development of Healthcare.gov and the multiple backend systems supporting it. According to Reichard (2011), it became apparent to HHS officials that the new office did not have the tools to operate and more importantly, fund the project. It could not award grants or outside contracts that were critical to its mission. Fearing defunding by Republicans, HHS moved the office to CMS and renamed it the Center for Consumer Information and Insurance Oversight or CCIIO. This move was a political decision to ensure HHS could fund the massive project and be somewhat shielded by de-funding attempts. When the role of managing the project moved to CMS, it allowed some protection from the opposition but at a cost. A Senate inquiry (2014) explained that the work was divided with three other offices within the CCIIO, each supposedly having some contract responsibility. For instance, the Office of Information Services was to provide guidance for the technical aspect of the exchange while the Office of Communications was tasked with the look and feel of the site. The Office of Acquisition and Grant Management was responsible for planning and managing activities needed to maintain the acquisition program.
Complexities of the Healthcare.gov Website While the Healthcare.gov website is the entry point for consumers, it is the Federally Facilitated Marketplace or FFM system that does the heavy lifting. A diagram by the GAO (2014) illustrates the entire system broken down by the major elements. The FFM is the heart of the entire system and is comprised of 3 main systems that determine a consumer’s eligibility and enrollment, plan management, and financial management.
The eligibility and enrollment system allows consumers to enroll in Obamacare and determines their eligibility by interfacing with seven separate federal agencies as well as individual states marketplaces and Medicaid offices. For example, it interfaces with a Department of Defense system that can determine if someone is eligible for TRICARE and with a Department of Homeland Security to ensure the individual is an American citizen.
The plan management system contains processes for managing qualified health plans. Only those plans deemed to be qualified and the issuers themselves are eligible to be offered. There are hundreds of issuers, each with different levels of insurance plans.
The financial management system facilitates payments to issuers that include premiums. It interfaces with the IRS to determine any income based subsidies the consumer may be entitled to. Each of those systems interface through another system called the Federal Data Services Hub to collect all of the relevant information required to accurately purchase a qualified health plan.
This entire system is designed to interface to hundreds of issuers with thousands of separate plans, 7 federal agencies, 15 state exchanges (including the District of Columbia), and support the citizens of 36 states that chose not to implement their own exchanges. If that were not enough complexity, consider the bitter partisan politics surrounding the enactment of the PPACA, not to mention federal government in general for the past 6 years.
Additional Difficulties In an HHS Inspector General report (2014) there were 60 separate contracts awarded totaling more than $800 million between 2010 and 2014 alone. Those 60 contracts were awarded to 33 different contractors, many of which were awarded multiple contracts. Additionally there were as many as 5 different contract types utilized for those contracts. Instead of hiring a general contractor to handle the many contracts, CMS decided they could manage each of them from within their ranks. Due to the fixed deadline established by HHS, CMS needed to issue the different types of contracts in order to have any chance for success. The normal preferred method would simply take too long to complete, jeopardizing the final product. This cascaded into not having hard requirement but rather evolving requirements as the project progressed. The political pressure, especially from the opposition, played no small role in factoring complexities. States who CMS had thought would provide their own exchanges were reversing their stance due to their own changing political outcomes. As with any bureaucracy, internal politics within CMS as well as HHS also had an impact.
Failure Factors As early as 2007, CMS had been warned about not developing an acquisition strategy. In a GAO report, CMS was specifically called out concerning their lack of strategy where key risks were not identified nor were management plans developed to address risks. They were further advised by the GAO (2007) to strengthen their oversight capability. While they did have in place a QA surveillance plan for Healthcare.gov, they failed to follow it. Instead CMS relied on personal judgment and experience to determine quality. CMS was dealing with a very compressed timeline, only having 15 months to develop a very complex system. Normally a timeframe of 2 years would have been recommended for any project, let alone one so complex. This compressed timeline drove the reasoning behind the cost-plus contracts but unfortunately CMS did not follow up with increased oversight. Requirements proved to be moving targets as well. As stated earlier, states were not locked into their own exchanges until late in the project. It was not known until a Supreme Court decision in early 2012 just how many states would establish exchanges. Additionally due to the short timeline, requirements were in flux for much of the project.
There was one change in particular that came as late as one week before launch that may have been the final straw for the failure. Due to one part of the system not being completed, a decision was made to require customers to create accounts before shopping for policies. The end result was a bottleneck with account creation that locked up the system.
Continual political pressure from the opposition played a significant role of the failure. According to O’Keefe (2014), from January 2011 until the launch of Healthcare.gov, there were 45 attempts by the House of Representatives to derail the legislation, mostly by defunding all or parts of it. That does not take into account the multitude of ads run by right wing PACs that were designed to rile the public against Obamacare. By anyone’s standards, that is a tremendous amount of opposition to any legislation.
In addition to the House attempts there were hundreds of lawsuits brought by individuals, companies, states, and lawmakers’ attempting to prove the legislation, in part or whole, is unconstitutional. From the individual mandate to religious beliefs to states’ rights, there was no shortage of legal wrangling to alter or repeal the law.
Conclusion
Setting aside one’s personal views of Obamacare, the failure of the Healtchare.gov launch on October 1, 2013 is the subject of this paper. HHS had a tremendous challenge to create a first of its kind marketplace exchange of which there was tremendous complexity. The exchange had to connect to 7 different federal agencies, each with differing technologies, to determine eligibility, income, and legal status. Any one of these would be a challenge but add in the complicated federal regulations and it could easily turn into mess.
In addition the exchange had to interface with multiple state exchanges and hundreds of insurance issuers. Again, there were a multitude of differing technologies to deal with as well as their own rules and regulations. Simply dissecting the different rules and regulations is a daunting task, let alone defining requirements for each of them. Add to that the need to collect and translate data from those different technologies into a central collection system and then disseminate accurate data to all of the associated systems can easily become a nightmare for developers.
The political pressure of implementing the law was so intense that it really is amazing they were able to launch the site at all. The multiple attempts to defund or repeal the law had the management team focused more on defending the law then on providing the services the law mandated. In a move that was intended to shield the development team from those pressures HHS moved the responsibility from OCIIO to a CMS office.
While this move may have had the best intentions, it ultimately backfired when CMS divided the project with 3 other offices under its authority. This enabled much confusion by spreading responsibility for managing the project among the different offices. As was witnessed in congressional hearings afterward, there was a lot of finger pointing between the different offices and the contractors hired to implement the systems. A clear lack of an overall leadership team resulted in many instances of miscommunication with contractors.
As is the case in too many government IT projects, CMS did not have the talent needed to manage such a complex project. Instead of assigning one entity with overall responsibility or even contracting that responsibility, they determined their internal staff could manage the project on their own. They had to manage 60 separate contracts with 33 different contractors by means of 5 different contract types.
While they admitted the need for cost-plus contracts due to the short schedule, they did not increase their oversight capabilities. An earlier suggestion by the GAO to strengthen their oversight capabilities, while not ignored, was not implemented. Instead CMS chose to use their own experience and judgment to determine quality. Common sense would suggest that with fragmented responsibility and lack of talent, this may not have been a wise choice.
Undefined and changing requirements also greatly increased the chances of failure. The lack of hard requirements was not solely due to a lack of CMS talent, but also due to the continual challenges from the opposition. Changes in the law resulting from these challenges continued throughout the project were also detrimental to success. Bureaucrats were constantly maneuvering to either block the law or defend it. This was evident in the HHS decision to move the project management to CMS in an attempt to shield the project from the opposition’s efforts to defund it.
One could argue that political events drove the process but at the end of the day, HHS was accountable for the failure. They failed to properly plan for the risks inherent in not only the technical complexities but the political reality of such a controversial law. Their maneuvering to avert the political pressure resulted in being forced to adopt a new development process that no one at CMS had tried before. This cascaded into how the contracts were created, managed, and executed.
Their failure to appoint one person or even one office responsible for the entire project certainly caused a great deal of confusion. One office did not have any insight into what another was doing, much less aware of how tasks were dependent on one another. This lack of accountability appears to be a common thread with government IT projects and is one of the leading causes for failure. If taxpayers want to see any relief for these failures, they must demand accountability in their elected and appointed officials.

References
Department of Health and Human Services, Office of Inspector General. (2014). An overview of 60 contracts that contributed to the deployment and operation of the federal marketplace. Retrieved from https://oig.hhs.gov/oei/reports/oei-03-14-00231.pdf
Goldstein, A., Eilperin, E. (2013). HealthCare.gov: How political fear was pitted against technical needs. Retrieved from http://www.washingtonpost.com/politics/challenges-have-dogged-obamas-health-plan-since-2010/2013/11/02/453fba42-426b-11e3-a624-41d661b0bb78_story.html
Grogan, J. (2011). Insurance oversight office set to move from HHS to CMS. Retrieved from http://www.mdnews.com/news/2011_01/insurance-oversight-office-set-to-move.aspx
O’Keefe, E. (2014). The House has voted 54 times in four years on Obamacare. Here’s the full list. Retrieved from http://www.washingtonpost.com/blogs/the-fix/wp/2014/03/21/the-house-has-voted-54-times-in-four-years-on-obamacare-heres-the-full-list/
Reichard, J. (2011). Sebelius shuffles insurance oversight office into CMS, shifts CLASS Act to Administration on Aging. Retrieved from http://www.commonwealthfund.org/publications/newsletters/washington-health-policy-in-review/2011/jan/january-10-2011/sebelius-shuffles-insurance-oversight-office
Senate Finance Committee Minority Staff and the Senate Judiciary Committee Minority Staff. (2014). Red Flags: How politics and poor management led to the meltdown of HealthCare.gov. Retrieved from http://www.hatch.senate.gov/public/_cache/files/e3ff7336-426b-4363-ad41-086ee120a2f1/HealthCare.gov%20REPORT.pdf
United States Government Accountability Office. (2007). Centers for Medicare and Medicaid Services: Internal control deficiencies resulted in millions of dollars of questionable contract payments. Retrieved from http://www.gao.gov/assets/270/269494.pdf
United States Government Accountability Office. (2014). Healthcare.gov: Actions needed to address weaknesses in information security and privacy controls. Retrieved from http://www.gao.gov/assets/670/665840.pdf