By Katie Kerwin McCrimmon

Sparring between Colorado’s Medicaid managers and those building the state’s new health exchange prompted an outside analyst to recommend a “third party to triage and manage the project.”

A mediator from the New Jersey-based Robert Wood Johnson Foundation now will come to Colorado to help managers get the giant multi-million dollar project off the ground on time by Oct. 1 when it’s slated to open to consumers.

Complicating tight launch deadlines is that Colorado lawmakers set up the state’s new online health insurance marketplace as an independent public entity, not a state agency.

According to a new report from outside analysts at First Data, squabbling between state and exchange managers over IT projects and other policy decisions has been slowing down progress on the exchange.

“A number of policy decisions need to be resolved by both COHBE (the Colorado Health Benefit Exchange) and HCPF (Medicaid managers at the Department of Health Care Policy and Financing); they include the approach to accommodate referrals, eligibility mixed households and life change events,” wrote Yen Pham, an analyst from First Data.

“These open policy decisions have an impact on each organization and are affecting the development progress. COHBE and HCPF have a peer relationship. This adds a layer of complexity as neither has the authority to direct and manage the activities of the other organization,” Pham wrote.

Federal grants that Colorado received to launch its exchange require outside analysts to conduct independent reviews. The process is known as IV&V for “independent verification and validation.”

First Data conducted the second of five planned reviews during the month of March and found that Medicaid management “lacked the ability to dedicate resources to assist with the development effort, but has recently brought additional staff to assist with the effort.”

Pham wrote that “COHBE and HCPF are working collaboratively in resolving the challenges.” Yet, she warned that “there is limited time remaining to design, build and test (exchange technology) prior to the Oct. 2013 Go-Live date.”

Exchange managers presented Pham’s findings on Thursday to four exchange board members during a meeting of the committee that handles IT and implementation.

Both exchange managers and Medicaid managers say they are working together well now and that they welcome outside help.

Patty Fontneau, executive director and CEO of the exchange, said that grants will cover the costs of assistance from Robert Wood Johnson. She said an outside facilitator “absolutely” will help Colorado.

“It’s another resource to move us along faster as we’re working on a really fast time frame,” Fontneau said. Still, she insisted that outside consultants “won’t be making decisions for Colorado.”

Added Adele Work, the exchange’s lead manager for implementation: “It’s more like a relationship counselor, a mediator, not that we need one, but it would be more like that than an escalation point (or someone who would take over decision-making).”

Rachel Reiter, communications director for the state’s Medicaid office, said, “we’re working collaboratively. Decisions will be made by both the exchange and HCPF collaboratively.”

The new First Data report found that exchange managers had corrected problems uncovered in the first IV&V report. Now there are new problems that could undermine the exchange’s ability to open on time, Pham wrote.

“There is time to remedy these situations with corrective actions but these issues should be addressed immediately,” she said.

Among the critical concerns she highlighted:

• The addition of new IT projects that have expanded the scope of work needed to be done. These include the recent decision that exchange managers, not state workers will build an IT “eligibility engine” to determine if consumers qualify for federal subsidies to help pay for health insurance. Previously, exchange managers expected state officials to build that portion of their technology.
• New work needed to finalize a call center.
• Limited “visibility” of work being done by IT sub-contractor, hCentive. IT experts at hCentive are designing the core products that will run Colorado’s health exchange. Pham recommended that exchange managers closely monitor hCentive’s work to ensure that it’s done properly and that any fixes can be made as early as possible.

Overall the First Data report found that exchange managers are “willing to compromise by making difficult decisions to ensure the project stays on schedule.”

Adele Work said many of the concerns unearthed in March have already been addressed and that the IV&V update represents “a point in time.”

“These are our issues. We embrace these and are really working hard to try to resolve them. We own them,” Work said.

She said scheduling problems have escalated because new policies have continued to come down from the federal government and board policies.

“We’ve continued to take one line tasks and turn them into thousand line tasks,” Work said.

Another challenge has been that the exchange’s primary IT contractor, CGI, has not taken on all the responsibilities that exchange managers expected it to handle.

“When we brought on CGI as our system integrator, we had the naïve assumption that we were going to have a system integrator that was going to be responsible to all of us,” Work said.

In fact, CGI has handled about 90 percent of anticipated tasks, leaving exchange managers with a hefty and difficult chunk of about 10 percent of the oversight work, Work said.

Despite the complications, Fontneau and Work say they are meeting regularly with multiple partners including officials at state Medicaid offices and the Office of Information Technology (OIT).

Executives at OIT earlier told Solutions that because the exchange is not a state agency they were not allowed to supervise work at the exchange.

Fontneau said they work closely together.

“We work constantly with OIT,’’ she said, but added that OIT does not supervise exchange IT.

“They are a completely separate organization. They wouldn’t supervise our technology. That’s like saying JC Penney would supervise Macy’s. We’re separate organizations, but our systems will have interoperability, so of course we need to talk to each other.”