Mass. and Vt. Move to Recoup Millions Spent on Healthcare Websites

Image: Mass. and Vt. Move to Recoup Millions Spent on Healthcare Websites Workers at the Vermont Health Connect call center in Burlington.

Thursday, 26 Dec 2013 02:10 PM

By Sandy Fitzgerald

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Two states are weighing legal options against the Canadian-based contractor that designed their healthcare insurance exchange websites along with the federal Obamacare site.

Massachusetts and Vermont both contracted with the Montreal-based CGI Group, which built HealthCare.gov. The states say they are withholding future payments and taking steps now to recoup millions in taxpayer dollars already spent on websites that still have serious problems, reports The Boston Globe.

Massachusetts officials are scheduled to meet on Jan. 9 to discuss their options. The state has already paid $11 million of a $69 million contract commitment to CGI. But Jason Lefferts, a spokesman for the state's insurance marketplace, Commonwealth Home Connector, says no more will be paid until CGI delivers a fully-functioning website.

“CGI has consistently underperformed, which is frustrating and a serious concern,” Lefferts said. “We are holding the vendor accountable for its underperformance and will continue to apply nonstop pressure to work to fix defects and improve performance.”

Instead of going through the website, Massachusetts has had to use an alternative software program and paper notifications, even though the state's system was long considered a national model that has provided coverage since 2007.

Bill Curtis, chief scientist at CAST Software, who was commissioned by The Boston Herald to critique Massachusetts' healthcare marketplace, last month said the website is overwhelmed by unnecessarily large files, operates at slower speeds, and has other serious flaws that are preventing users from being able to comply with the state's health insurance requirement.

Curtis also found that the state-run site is in worse shape than the federal HealthCare.gov website, with all its well-documented problems.

Vermont officials, meanwhile, have told CGI they plan to withhold $5.1 million in compensation because the company did not meet major deadlines. The state is disputing another $1 million in billed charges because it claims the company's failure to complete its work delayed healthcare enrollments by Vermont residents until early December.

"I've lost confidence in the contractors that were supposed to deliver a fully functioning website on Oct. 1," said Vermont's Democratic Gov. Peter Shumlin. "I'm going to continue to hold their feet to the fire until they get it right."

In Vermont, shoppers can buy coverage on the state-run website, but can't pay for it there.
CGI is also working on state-based marketplaces for Hawaii, Colorado, Kentucky, New Mexico, and California.

The website rollouts in those states, with the exception of Hawaii, went fairly smoothly. Hawaii's site launch was delayed two weeks.

The company says it is working to fix all the state websites and has already improved the national Obamacare site.

According to the Globe, the federal government has already spent $319 million on the national insurance marketplace website. CGI's portion of the bill is a reported $93.7 million. It is not clear how much of that has been paid out.

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