Obamacare Vendor Blames U.S. Agency for Website Delays

Oct. 24 (Bloomberg) -- Phil Mattingly reports on meeting of health care CEOs with President Obama. he speaks on Bloomberg Television's "In The Loop." (Source: Bloomberg)

CGI Group Inc. (GIB/A), the main contractor for the Obamacare health exchanges, will tell lawmakers today it did nothing wrong and blame another vendor and a federal agency for website flaws hobbling online registration.

The U.S. government is the “ultimate responsible party,” Cheryl Campbell, a senior vice president at the company’s CGI Federal Inc. unit, said in testimony posted yesterday on the House Energy and Commerce Committee website. The panel is set to hold the first hearing on failures that slowed sign-ups.

Campbell said the U.S. Centers for Medicare and Medicaid Services was the project’s “quarterback” while Quality Software Services Inc., owned by UnitedHealth Group Inc. (UNH), helped design a system that created a “bottleneck” blocking a majority of users from gaining access to the site.

“The increased number of transactions” on the website “have caused system performance issues,” according to Campbell’s prepared testimony.

House Republicans are seizing on the technical defects after the exchanges opened on Oct. 1 as they push to delay implementation of the health-care law, while Democrats are urging more time to overcome the sign-up woes. One Democrat, Senator Jeanne Shaheen of New Hampshire, has called for delaying the deadline to register for coverage.

The website failures are making it difficult for people to enroll, marring the health exchanges’ debut and giving critics ammunition to undercut the health-care law. The flaws may discourage young, healthy, web-savvy consumers whose participation is crucial to offset the risk of insuring older, sicker people and to keep the program sustainable.

‘Be Fixed’

“It is premature to consider” extending the enrollment period or delaying penalties for those who don’t sign up, Maryland Representative Steny Hoyer, the No. 2 Democrat in the House, said in an interview yesterday. “We will see what happens in the next few weeks in terms of fixing the system. I think it’s going to be fixed.”

Hoyer and other House Democrats spoke after Shaheen asked President Barack Obama to extend open enrollment beyond the March 31 deadline. Because some people were unable to enroll, more time is needed to allow consumers additional opportunities to access the site, she said.

House Minority Leader Nancy Pelosi, the California Democrat who was House speaker when the health-care law was passed in 2010, said she doesn’t support Shaheen’s request.

‘Move Forward’

“We should try to fix what we have, move forward with the deadline,” Pelosi said at a briefing yesterday. “While there are glitches, there are solutions as well.”

The administration is standing firm on the March 31 deadline, Josh Earnest, a White House spokesman, said via Twitter yesterday. Guidelines will be issued soon that will allow anyone who purchases insurance through the end of March to avoid a penalty, according to a White House statement.

The change is being made to avoid a conflict in the rules between the end of the enrollment period and the sign-up date for coverage to take effect. White House press secretary Jay Carney said earlier this week that there was “a disconnect” between the dates.

California Republican Darrell Issa, chairman of the House Oversight and Government Reform Committee, yesterday released letters to five companies asking for more information about their possible role with the White House or the Department of Health and Human Services to fix the flaws. The companies are Verizon Enterprise Inc., Google Inc., Microsoft Corp., Oracle Corp. (ORCL) and Expedia Inc. (EXPE)

Seeking Details

“Despite the president’s assertion that ‘we’re well into a tech surge,’ neither the White House nor HHS is providing additional details about which private-sector companies have been engaged or whether they are being engaged through the appropriate procurement processes,” Issa wrote.

Republicans faulted the website defects less than a week after the end of a partial government shutdown triggered by the party’s opposition to the Patient Protection and Affordable Care Act, also known as Obamacare. House Republicans have been seeking to delay the Obama health-care law.

“The rollout of Obamacare is nothing short of a debacle,” House Majority Leader Eric Cantor of Virginia told reporters yesterday in Washington.

Administration officials including Health and Human Services Secretary Kathleen Sebelius met at the White House yesterday with the heads of WellPoint Inc., Aetna Inc. and at least 10 other insurers to discuss correcting flaws in how data from the health-care marketplaces is transferred to the companies.

Panel Hearing

Today’s hearing is meant to determine whether breakdowns at www.healthcare.gov were caused by the contractors, or “were they told to do it this way” by the Department of Health and Human Services, Representative Tim Murphy, a Pennsylvania Republican, told reporters in Washington.

In addition to CGI Federal, based in Fairfax, Virginia, and the Quality Software Services unit of Minnetonka, Minnesota-based UnitedHealth Group, the committee will hear from executives with Equifax Workforce Solutions, a unit of Atlanta-based Equifax Inc., and a U.S. unit of Serco Group Plc (SRP), a U.K. services provider.

CGI, which has been awarded more than $420 million in contracts tied to the health-care law, didn’t identify Quality Software by name in the written testimony.

The “first set of issues” for users was tied to a tool that allows creation of secure accounts developed by another contractor, Campbell said. It was provided by Quality Software. That company was awarded more than $150 million in contracts tied to Obamacare, according to an analysis by Peter Gosselin, a senior health analyst with Bloomberg Government in Washington.

Design, Testing

Quality Software completed its design and tested the tool in February and March, Andrew Slavitt, group executive vice president for the UnitedHealth division responsible for the unit, said in written testimony to the committee.

Another contractor, Mitre Corp., conducted an independent security risk assessment in February, and the Centers for Medicare and Medicaid Services approved the tool in March, he said.

The software is part of the exchange’s registration and access management process, he said.

Website ‘Inundated’

“After the launch, healthcare.gov was inundated by many more consumers than anticipated,” he said. “Many of the critical components by these multiple vendors were overwhelmed.”

Obama administration officials yesterday briefed House Democrats on the status of the health-care law’s implementation.

Representative Xavier Becerra, chairman of the House Democratic Caucus, said the White House officials outlined steps being taken to reduce errors on the website and “they’re moving forward with more access to phone coverage to give people access to that information.”

Virginia Democrat Gerry Connolly said if people can’t access the website and sign up soon, he’d be open to a delay in the penalties for not enrolling.

“ You can’t ask somebody to pay a penalty based on a certain time frame of availability if that time frame has been contracted through no fault of their own,” Connolly said in an interview.

To contact the reporters on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net; Roxana Tiron in Washington at rtiron@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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