Exchange snafus trip up thousands as more cost overruns mount

By Katie Kerwin McCrimmon

A multi-million dollar IT system that Colorado officials promised would make signing up for health coverage simple has instead snagged thousands of customers and now will cost several hundred thousand dollars — if not millions — to fix.

Managers at Colorado’s health exchange, Connect for Health Colorado, plan to ask their board members on Monday to approve an emergency infusion of $322,000 for the next month to try to help customers get coverage by the Feb. 15 deadline. No warranty covers the work that the additional money will fund, the exchange’s chief technology officers said on Friday.

The request for more cash follows nearly $8 million in budget increases last fall for extra software licensing fees and call center expenses. (Click here to read Blown-out budget infuriates exchange board member.)

News that the IT system isn’t working as promised and that managers want another cash infusion infuriated some board members who wanted to know if the system was under warranty, and said managers kept forcing them to make quick decisions to spend more money because “the sky is falling.”

Connect for Health Interim CEO Gary Drews revealed to board members in a committee meeting on Thursday that at least 2,300 people still can’t get through the system to determine if they qualify for publicly-funded insurance through Medicaid or tax credits to help pay for private insurance. About 2,500 others had also been “caught in this process,” Drews said. It’s unclear how many customers are getting stuck — perhaps as many as one in five. Exchange officials concede the “number of difficulties is high,” but believe the system is working for thousands of people, including some of the new exchange customers, some who chose to renew their plans and many who signed up for Medicaid.

About half of the 21,000 people who bought private insurance through the end of December through the exchange have not qualified for tax subsidies. They can skip the problematic sign-in system if they don’t want to try to qualify for subsidies.

Complaints have been flooding the exchange’s call center, overwhelming workers there, Drews said. He said board members should expect to hear about all the problems at a meeting of the full board on Monday.

Exchange managers paid about $6 million for their half of the problematic IT system. That included costs to build the shared sign-in system and connect it to the exchange’s other IT systems. Colorado’s Medicaid managers at the Department of Health Care Policy and Financing supervised creation of the system. Private contractor Deloitte built the IT infrastructure while Connect for Health’s contractor, CGI, helped connect it to the exchange’s systems.

Medicaid officials were unavailable to comment on the problems or the total cost to the state before Health News Colorado went to press.

Colorado officials were supposed to build the shared system in 2013 and failed to do so. Since then, Medicaid head Sue Birch repeatedly has promised she would build a simple, streamlined system that would be as easy to use as Kentucky’s much-hailed sign-up system, Kynect. Colorado officials informally said the system here would be like “Kentucky on steroids.”

Instead, the system is limping along, and Drews this week had to send an apology note to exchange partners that outlined more than two dozen “known and reported issues.” Click here to see Drews’ letter.

“We realized issues have been difficult and frustrating for many since the start of open enrollment, and they have hampered your ability to serve your customers,” Drews wrote. “While we don’t anticipate a perfect system when launching new technology and programs, we certainly had higher expectations than we’ve delivered.”

Exchange board members were furious Thursday, saying they felt cornered into approving additional spending without adequate advance notice.

“We’re being told there’s no time for suggestions. We have to have it done right away,” said Dr. Mike Fallon, a board member.

“These problems didn’t start today,” Fallon said. “It’s every issue: you approve it or the sky is falling.”

On top of the additional spending on the shared sign-in system, exchange managers are asking their board to approve what could amount to another $1.8 million cost overrun for the next year to pay for better coordination and IT integration with private health insurance carriers.

Even Arnold Salazar, another board member who has consistently supported spending increases for the exchange, expressed impatience on Thursday.

And board member Eric Grossman wanted to know if the shared sign-in system was under warranty and how long Connect for Health would have to throw more cash at the problem.

“How long does this go and can we afford it?” Grossman asked.

Drews and his top managers could not say how much fixes to the system ultimately will cost.

“We’re tied at the hip to the eligibility system and our partners (at Medicaid) in that way. We don’t have full control over this. I don’t see a way around not doing this (spending more money) at this point,” Drews said.

Colorado officials often brag that the state’s exchange is among the best in the country. In fact, sign-ups have been relatively low so far for 2015. Between Nov. 1 and Dec. 31, only about 21,000 new customers had signed for private health insurance. An additional 93,000 customers from last year renewed their plans — 63,000 of them automatically and the others by choice. That process went more smoothly than expected, Drews said on Thursday. The deadline to sign up for coverage this year is just over a month away on Feb. 15.

Exchange spokesmen routinely report “enrollment gains” by lumping renewals and Medicaid sign-ups with the new customers who sign up for private health insurance.

Sign-ups are critical since Colorado’s health exchange is supposed to be financially self-sustaining this year and user fees are supposed to eventually cover the bulk of the costs after federal loans and millions left over from Colorado’s high risk pool run out.

In his letter to partners, brokers and health coverage guides, Drews vowed that exchange staffers and consultants are “working around the clock … to improve the Marketplace experience for everyone — and most important, to earn your trust.”

Correction: An earlier version of this story said that 93,000 customers had their plans automatically renewed. That was true for 63,000 customers. The others chose to renew their plans.



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