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by
Rick Moran

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January 18, 2014 - 7:14 am
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Apparently, Obamacare is in a lot bigger trouble than anyone has let on — or anyone has imagined.

A document given to the contractor who replaced CGI in December shows how truly desperate is the position of the government.

Accenture has been tasked with finishing the construction of the healthcare.gov website — specifically, the back end of the site which will allow the transfer of subsidies directly to insurance companies.

The document makes it clear that the reason CGI was let go was because the government had no confidence that the company could affect the changes necessary to get the payment system up and running in time to avoid disaster.

The Hill reports:

The document said officials realized in December that the need to bring on Accenture was so urgent that there was no time to go through the “full and open competition process” before awarding them with a $91 million contract.

“There is limited time to build this functionality and failure to deliver…by mid-March 2014 will result in financial harm to the government,” the document says.

“If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers,” it continues. “Additionally, without a Financial Management platform that accounts for enrollments and associated program costs that integrates with the existing CMS Accounting platform, the entire healthcare reform program is jeopardized.”

Not completing the job on time may also result in harm to insurance companies:

Many of those who have signed up for ObamaCare are eligible for federal subsidies, which the government pays directly to the insurers. The document says that failure to complete the project by mid-March could result in “inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers.”

On Thursday, Gary Cohen, the director of Medicare’s Center for Consumer Information and Insurance Oversight, told the House Energy and Commerce Oversight Subcommittee that the government would start paying insurers as soon as next week based on estimates of the federal subsidies owed to them.

Cohen said that “because we don’t have full functionality” of the website that the government was using a workaround, and that the automated payment system would be ready “in the next months.”

While Cohen did not give a timetable for the project, he said that a stopgap system would pay insurers next week based on calculations of what they are owed.

However, the back-end problems extend beyond federal subsidy payments. According to the document, the system is vulnerable to “inaccurate forecasting” of the risk mitigation programs in place to pay insurers who enroll a higher-than-expected number of sick patients with expensive bills, “potentially putting the entire health insurance industry at risk.”

By mid-March, Accenture must build a financial management platform that tracks eligibility and enrollment transactions, accounts for subsidy payments to insurance plans, “provides stable and predictable financial accounting and outlook for the entire program,” and that integrates with existing CMS and IRS systems.

Accenture will also have to clean up some aspects of the project that CGI failed to complete, such as the notorious 834 enrollment transmissions to insurance companies that in October and November were transmitting inaccurate and garbled data.

The government is going to guesstimate subsidies, which may lead to overpayment or underpayment to insurance companies. Apparently, they are going to leave it up to the IRS to determine if insurance companies are owed money, or whether the companies must refund the government.

Sounds like another disaster waiting to happen.

Comments are closed.

Top Rated Comments   
Relax folks, Barry and Company are doing the absolute best they can. The very best. No really, I mean it. The best. Honestly.
44 weeks ago
44 weeks ago Link To Comment
There is no drop-dead date for Obamacare. The tyrants will simply move the goalposts until they are done erasing freedom.

But November 2012 was a drop-dead date for the millions of Americans who will have their lives shortened because of Obamacare. Take a pill and relax for the decline.
44 weeks ago
44 weeks ago Link To Comment
'...there was no time to go through the “full and open competition process...”

Unlike when they awarded that billion dollar contract to set up the entire system, the "full competition process" was "open" to all Harvard classmates of Michelle who were VP's and above in foreign software companies with extensive experience in building national gun registries and were later fired for incompetence.

44 weeks ago
44 weeks ago Link To Comment
All Comments   (63)
All Comments   (63)
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I have been involved the gov SW contracting a long time. Its been my experience that 90M contracts with only a 3 month drop dead schedule, especially with a new contractor taking over after a failed one, do not go well. There are simply too many serial activities to complete, like design and testing, that cant be done faster by adding on more manpower. The only way they might have a chance is if this firm has a very small number of very capable people, but I severely doubt that is the case.
44 weeks ago
44 weeks ago Link To Comment
Ummm, just curious. What did you expect to happen when a Marxist psychopath was elected as president of the United States of America?
44 weeks ago
44 weeks ago Link To Comment
"specifically, the back end of the site which will allow the transfer of subsidies directly to insurance companies."

That is actually a "feature" that will allow the government to keep more of the people's hard earned money.
44 weeks ago
44 weeks ago Link To Comment
Wish I could claim competence and get a no bid $91 Million contract from the Federal Government. That, my friends, is about $1 Million per day between now and the end of March. What a country!
44 weeks ago
44 weeks ago Link To Comment
"Is it routine for bureaucrats to be overly dramatic in tasking a contractor, exaggerating consequences for failure? I can think of no reason why a procurement document would employ such a tactic..."

You mean other than the fact it's the Obama Maladministration doing it? Given that, does there really need to be a second reason?
44 weeks ago
44 weeks ago Link To Comment
Wish I could claim competence and get a $91 Million no bid contract. That, my friends, is about $1 Million per day between now and the end of this coming March. Wonder how much of that winds up in Obama's political account?
44 weeks ago
44 weeks ago Link To Comment
"Is it routine for bureaucrats to be overly dramatic in tasking a contractor, exaggerating consequences for failure? I can think of no reason why a procurement document would employ such a tactic, which leaves us with the very real possibility that Obamacare is in deep, deep trouble regardless of who signs up and how many."

Actually it is fairly common in the preamble and overview sections to get very overheated rhetoric about the urgency and importance of a contract. That can make the the customer feel like they have some leverage when things start getting heated - "We told you right up front that this was urgent, now put more people on this". But the proof of it is what is in the actual agreed schedule, scope, penalties and incentives language. Accenture is a very smart company, and I am sure they did not agree to have this large of a program up, running and tested in less than three months, all while "cleaning up" of the existing program. Impossible, unless CGI was 98% done, which by all accounts is not the case.

Here is what will happen. The government told Accenture to take over where CGI left off and build from there. Anyone savvy in Accenture knows that is impossible - it will take longer to backwards engineer what is existing, finding the flaws and rebuilding- than to start from scratch. There were probably discussions around that with the government, but the government would insist on building from CGI on - because of the optics of abandoning, starting over, sunk cost, etc. So, the terms and conditions were probably written with the ability to come back later and say, with more proof, that it will be impossible to build from where CGI left off. If whoever negotiated for Accenture has any sense, and they usually do (and they had the leverage of having a customer totally over a barrel), there are no liquidated damages, or if there are they are way out in the future, and they are not locked into re-using all of what CGI did. They will make a good faith effort. After which they will state they have to basically start over. They will then quietly as possible be allowed to do that or there will be another foot stomping, harumphing from the government about a bad contractor and they will do this again. In any case, they will have lost another month or two to this good faith effort and ensuing negotiations.
44 weeks ago
44 weeks ago Link To Comment
'Drop-dead' is horrifically accurate terminology. Not only are taxpayers going to pay and pay and pay again, they will be dropping dead for lack of medical care- in modern America. Only the left could engineer such a travesty.
'Look what's happ'nin out in the street ...'
44 weeks ago
44 weeks ago Link To Comment
Obamacare won't die, they'll keep the mummified corpse animated by multi-billion dollar bills and "too big to fail" payoffs to insurance companies. They'll throw billions and trillions away hoping that somehow it will revive. I hope I don't get sick in the next ten or twenty years.
44 weeks ago
44 weeks ago Link To Comment
Further proof that Mickey Mouse runs the USA. These are the same tactics used by Disney for its projects - give someone a harsh deadline and little pay, then when they fail to meet deadline, they get sacked and what has been completed is given to another company with the same delimma. Disney has already engulfed the entire entertainment industry and has been raking in the cash this past decade after acquiring Marvel. Now with Star Wars, they'll rake in even more. I'm curious to see how much Disney has made this decade compares to the amount of acquired debt USA has also acquired...
44 weeks ago
44 weeks ago Link To Comment
The difference is those Disney projects ultimately did get completed, and with good quality. The very thing you criticize them for, raking in cash, is the very thing a competent private company should be doing. I doubt if the same thing will happen with obamacare. I wish Obama was more like Disney, since Disney projects work, and make money, while all I have seen out of Obama so far is miserable failure.
44 weeks ago
44 weeks ago Link To Comment
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