Problems Remain: MA, VT Review Contracts With Health Site Designer

Dec 27, 2013


Massachusetts and Vermont are withholding payments and considering legal options against the contractor that set up the states' problem-plagued health insurance websites.

Jason Lefferts is the communications director for the Massachusetts Health Connector, the state’s insurance marketplace. He describes how simple signing up for health insurance through the website should be.

“When its finished someone will be able to go online and in one sitting, complete the application, find out what level of subsidy they have, select a plan, make a payment and then the information would be sent to the insurance carrier,” said Lefferts.

But right now, Lefferts says that’s not the case.

“Overall, the IT system remains far from where it needs to be,” he said. “Key functionality has remained delayed and still not delivered. We also have issues with system performance that continues to struggle including recurring problems in account creation, login, slow performance, time outs, and random and sporadic error messages.”

The federal healthcare website was partly based on the commonwealth’s existing system created in 2006. In order to set up a software system that would streamline with the federal one under the Affordable Care Act, the Massachusetts Health Connector contracted CGI Group, a Montreal-based information technology company. Lefferts says the marketplace was hoping to be fully functional by October 1 as the state has paid $11 million of its $69 million contract with CGI so far.

“There are some milestones in the contract that they have to meet and when they meet those milestones then they get paid for that work,” Lefferts explained. “Some of those milestones have been delayed, they haven’t reached them and they don’t get paid for them until they get there.”

To make ends meet, the health connector has set up alternative in-house methods to enroll people in plans. Workers at the connector are determining subsidy levels and mailing the information to those seeking coverage so they can select a plan. Once a plan is chosen and a first-month’s premium paid, the connector sends the notification to the insurance carrier. Lefferts says all of these steps would be completed by enrollees in one sitting if the site was functioning properly.

“Under the old model, if you were applying for subsidized coverage you would have to fill out a paper application and then that would be reviewed,” he said. “So we are kind of going back to what we were doing in the past.”

Lefferts says since October 1, more than 44,000 people have signed up for health insurance through the state’s site. It has extended its enrollment deadline to December 31. Lefferts says connector and state health officials will meet on January 9 to address its contract options with CGI. 

“Right now we’re holding the vendor accountable for their under-performance and we are going to continue to apply nonstop pressure to work to fix defects and improve performance,” said Lefferts.

Vermont’s Director of Health Care Reform Robin Lunge says the state has sent two letters to CGI withholding about $1 million for delivered services deemed not up to standard as well as liquidating additional money from its contract with the company.

“Our contract had a provision that said if you missed certain critical milestones then we will assess liquidated damages based on how long you were late,” Lunge explained. “The purpose there is to really provide a financial incentive for your contractor to deliver on time. We did assess those liquidated damages. They were $5.1 million.”

As of early December, Vermont had paid $18.6 million of its $82.6 million contract with CGI. Lunge says Vermont’s site is fully operational for individuals seeking coverage but is still testing functions that would allow small businesses’ to provide coverage for employees. In November, the state announced small businesses could extend their current plans through March 2014 or purchase Vermont’s health plans directly through private insurers in the mean time. Lunge says about 65,000 people eligible for the state plans have received some form of coverage and nearly 40,000 people have been enrolled through those small business options. Lunge says the state is also assessing its contract options with CGI.

“The governor has not been satisfied with CGI’s performance, but we do think the most important thing moving forward is getting our system up and running and getting Vermonters covered,” said Lunge.

Calls to CGI were not returned in time for broadcast. A CGI spokeswoman tells The Boston Globe the company is working to fix state websites, has already improved performance and intends to honor its contracts. The company is contracted with seven states and is one of many working on the federal government’s site.