Health IT

GAO blasts planning, oversight and cost overruns for

The website was developed without enough planning or oversight and launched precipitously, at least in part because of "political sensitivity," according to a report from the Government Accountability Office.

GAO blamed "inconsistent oversight" for many of the technical problems and cost increases that plagued the site before and following its Oct. 1, 2013, launch.

"CMS incurred significant cost increases, schedule slips, and delayed system functionality" for both the the "federally facilitated marketplace" -- the health care exchange that contains the plan registration and shopping functions for consumers and the back-end reconciliation for insurance carriers -- and the data hub, which moves information between the government databases that verify claims of eligibility for insurance, according to the July 30 report.

In addition to inconsistent oversight, GAO laid the blame for the cost increases on constantly changing requirements for the systems. From September 2011 to February 2014, GAO estimated that costs for developing the federal exchange increased from $56 million to more than $209 million. Data hub costs increased from $30 million to almost $85 million.

"We found that CMS undertook the development of 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," the report said.

All of this, GAO concluded, was driven by the desire to launch on Oct. 1.

"Meeting project deadlines was a driving factor in a number of acquisition planning activities," the report said.

Under the Federal Acquisition Regulation, agencies must write clearly defined requirements for services being purchased. GAO found that the Centers for Medicare and Medicaid Services "proceeded with the award process before FFM contract requirements, which included general technical requirements for system development, were finalized."

CMS issued task orders for the exchange and data hub systems "when key technical requirements were unknown."

GAO made a number of recommendations to bolster oversight and tighten management of contracting. The Department of Health and Human Services, and a published response included in the report, concurred with all the recommendations.

The launch, now nearly 10 months removed, continues to focus congressional attention on IT. The House Energy and Commerce committee is holding a July 31 hearing on CMS' implementation efforts, while a bipartisan quartet of legislators on July 30 introduced a broader IT acquisition reform bill that Rep. Anna Eshoo (D-Calif.) said was prompted in part by the botched rollout.

About the Author

John Bicknell is a former executive editor of FCW, and the author of America 1844: Religious Fervor, Westward Expansion, and the Presidential Election That Transformed the Nation.

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Reader comments

Fri, Aug 1, 2014 Troy K. Schneider, FCW Editor-in-Chief

Some folks do definitely make that argument, but I'd like to think FCW covers the realities and the bigger picture fairly regularly. To wit:, and

Fri, Aug 1, 2014

Feel free to come right out and say that the "lets go get some smarter people from Silicon Valley!!1!" strategy is invalid (and idiotic, and insulting and other things) and an unfair slight to your readership of Federal Contractors, given the fact that if there were no requirements, nothing delivered could have met expectations. We will now wait patiently for the traditional media to correct the record...

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