– Can CMS Get it Right?

Published: August 06, 2014

HHSHealth CareHealth IT

As the next open enrollment window approaches on November 15th, many are wondering if CMS can get it right. A recent GAO report and statement by GAO’s William T. Woods Director, Acquisition & Sourcing Management before the House Subcommittee on Oversight and Investigations, Committee on Energy and Commerce show numerous ineffective planning and oversight practices at CMS during the development and implementation of the website.

As of March 2014, CMS reported obligating $840 million for and its supporting systems, including $150 million in cost overruns for the initial version which failed in October of last year upon launch.  CMS blames much of the cost increases on changing, ill-defined requirements and system complexity.  CMS’ ability to provide adequate oversight was exacerbated by compressed deadlines.  “Pressure of deadlines drove a lot of the decisions that were made by CMS,” according to Woods.

GAO made five recommendations to CMS to better manage the ongoing effort to develop the federal marketplace and improve future contracting efforts:

·          Assess the causes of continued marketplace cost growth and delayed functionality and develop a mitigation plan

·          Ensure that quality assurance surveillance plans and other oversight documents are collected and used to monitor contractor performance.

·          Formalize existing guidance on the roles and responsibilities of contraction officer representatives and other personnel assigned to oversight functions.

·          Provide direction to contracting and program staff about the requirements to create acquisition strategies.

·          Ensure that IT projects adhere to requirements for governance board approvals before proceeding with development

Since’s debut in October, the site has been stabilized and even exceeded enrollment targets for the year, totaling more than 8 million enrollees.  CMS fired its original site development contractor, CGI, in favor of a new contractor Accenture.  Additionally, HHS has a new secretary, Sylvia Burwell, as well as a new Principal Deputy Administrator of CMS, Andrew Slavitt.  In late July, HHS added Leslie Dach as Burwell’s senior counsel to help manage health insurance exchanges.

At the subcommittee hearing, CMS spokesman Aaron Albright said, “CMS takes its responsibility for contracting oversight seriously and has already implemented contracting reforms that are more extensive than the recommendations in GAO’s report.”

However, even CMS’ new contract with Accenture has already experienced cost overruns, growing from an estimated $91 million to over $175 million in obligations to date while not delivering promised functionality.

Congress is justifiably concerned about ongoing progress with the website, as well as CMS’ ability to effectively manage contracts and contractors for the site.  The upcoming procurement for a follow-on contract to Accenture’s current work and the addition of cloud service vendor, HP to supplement hosting services currently provided by Terremark, adds even more complexity to the program.   CMS originally intended to transition hosting from Terremark to HP Enterprise Services Virtual Data Center, but has since decided to continue with Terremark for the main system and have HP host staging and other test environments for the federal marketplace. 

Slavitt told Congressmen that the situation this year is “vastly different.”  He went on to say the agency is contracting differently, “making sure that we have precise requirements, with daily management and senior level accountability that goes all the way up to the secretary.”