Hot seat for health care exchange website builders

• CGI official%27s testimony says high demand caused problems
• House Republicans have cited problems with site as signs of law%27s flaws
• White House held meeting Wednesday with top insurance company executives

WASHINGTON — High demand for health insurance coupled with confusion between contractors led to many of the problems that have plagued the HealthCare.gov website meant to allow uninsured Americans to buy insurance through the Affordable Care Act, an official with the top contractor will say in prepared testimony to a House panel Thursday.

Cheryl Campbell, senior vice president of CGI Federal, said in advance testimony for her scheduled Thursday appearance before the House Energy and Commerce Committee that another contractor was responsible for the technology that allowed users to create new accounts and which caused the initial bottleneck issues on the site.

Still, Campbell said, CGI is responsible for some of the problems, too.

"Now, as more and more users have been able to proceed to the (exchange) over the past several days, more individuals have enrolled in qualified insurance plans," Campbell's prepared testimony says. "However, the increased number of transactions in the (exchange) have caused system performance issues (such as slow response times or data assurance issues) that now need to be addressed through tuning, optimization, and application improvements."

Members of the Republican-led House and committee said they want to know why, after the Government Accountability Office issued a report saying the exchange was behind schedule, federal officials launched it anyway.

"Despite such issues, HHS officials repeatedly assured the public that implementation was progressing on time and as intended," according to a committee memo about the hearing.

Along with Campbell, other witnesses include officials from contractors associated with the launch, including Optum/QSSI, Equifax Workforce Solutions and Serco.

John Lau, contract representative for Serco, plans to testify that his company has processed about 8,000 paper applications since Oct. 2.

Andrew Slavitt of Optum will testify that while the Data Services Hub that they built is working properly, and that it has handled hundreds of thousands of operations a day, the tool that allows people to register is made up of several pieces from many different contractors.

"Many of the critical components developed by these multiple vendors were overwhelmed — the virtual data center environment, the software, the database system, and the hardware, as well as our (registration) tool," Slavitt's advance testimony says. "It appears that one of the reasons for the high concurrent volume at the registration system was a late decision requiring consumers to register for an account before they could browse for insurance products."

The Obama administration Wednesday created a series of "alpha teams" with insurance companies after a meeting between Health and Human Services Secretary Kathleen Sebelius, industry executives and White House officials.

The teams, Sebelius said in a statement after the meeting, consist of "insurers' technology experts and CMS technology experts, to iron out kinks in the both the (enrollment) forms and in direct enrollment." They are part of "the 'tech surge' that is incrementally improving performance at HealthCare.Gov."

CGI's contract

CGI has caught the brunt of the blame, as analysts have begun to question how their initial $93.7 million contract was awarded, as well as the flood of new money they received in April.

The company's contract to create HealthCare.gov spun from an existing 2007 contract, federal contract records show.

Scott Amey, general counsel for the Project on Government Oversight, said it was a multiple-vendor contract, or delivery order. Usually, the government issues a call for proposals publicly and allows any company to bid. But in cases where they use the same goods over and over again — such as office equipment or paint — they have several vendors who are preapproved to supply what the government needs, such as information technology.

It's something the government has done for many years, Amey said.

The government often benefits from the arrangement because contractors make lower bids because they know they will receive more work in the future, Amey said.

CGI has received more than $2.5 billion in federal contracts, he said.

"Time was of the essence to get this thing up and running," Amey said. "This is the exact reason you would use this kind of contracting vehicle."

Republican committee members said they plan to ask if the problems are long-term, how many people have been able to sign up for the new health exchange, why the exchange was allowed to roll out if the administration knew there were problems and what, exactly, are the problems with the website.

Along with the preparation for the hearing, there was some movement in Congress to extend the March 31 deadline by which uninsured Americans have to buy insurance through the exchanges.

Legislators seek extension

Sen. Jeanne Shaheen, D-N.H., sent a letter Tuesday asking that the deadline to enroll be extended past March 31. Those who do not enroll by that day may be required to pay a fine through their 2014 taxes. Republican Marco Rubio of Florida has also asked that the requirement to buy insurance be delayed, and Sen Joe Manchin, D-W.Va., said Wednesday he was researching a similar proposal.

Despite the website's problems in its first three weeks of operation, many potential insurance customers often wait until closer to the deadline, said Jonathan Gruber, an economist at MIT who worked with both former Massachusetts governor Mitt Romney's and President Obama's health care laws.

Massachusetts launched its health insurance program "at the beginning of 2007," Gruber said, "but enrollment didn't fully flesh out for a year." In fact, it was less than 6% of the year's total by the end of the second month. "But the mandate didn't come into place until the end of the year, and you could sign up any time."

That differs from the federal and state exchanges; people must sign up by Dec. 15 to receive insurance by Jan. 1, and by March 31 to avoid a fine for violating the individual mandate portion of the law. The March 31 date is a concession to insurers, who feared that allowing open enrollment would mean people would sign up for insurance as they were diagnosed with an illness.

But Gruber, a proponent of the individual mandate, doesn't see any reason to panic about the federal exchange problems — yet. Now, he described the situation as "DEFCON 1," a political problem, but probably not a problem yet for the marketplace.

"If it's not running by Thanksgiving, that's DEFCON 2," he said. "It's a real problem because people want to get insurance by January, but it's not a crisis.

"The real crisis comes if people can't get insurance until March," he said, adding that people can enroll over the phone or by paper now.

In Massachusetts, Gruber said officials weren't focused on how well enrollment went on a day-to-day basis. They looked at the long-term potential, and expected that people would sign up in time to avoid the penalty.

"I'm pretty confident they'll have it up and going by Thanksgiving," he said.