Gov. Peter Shumlin in recent months has had some very harsh words for CGI, the multi-national technology firm hired in late 2012 to build an insurance marketplace known as Vermont Health Connect.
But in announcing Monday morning that the state is severing ties with the company – a move critics have been calling for for months – top administration officials offered a more charitable view of CGI’s contributions thus far.
And asked whether the move should be read as an indictment of CGI’s performance, Lawrence Miller, chief of health care reform for the Shumlin Administration, said it should not be.
“I don’t think you normally ask when the relieving pitcher comes in whether the first guy ever should have been on the mound in the first place, right?,” Miller said during a press briefing at the Department of Vermont Health Access’ offices in Winooski.
Miller’s diplomacy is perhaps owing to a contract, signed by the state and CGI this past weekend, that essentially let’s bygones be bygones. In the “transition agreement,” the state waives its right to sue CGI for any failures or breaches associated with its work under the contract. And the two parties also decided that neither will have to assume fault for the technological problems that have plagued the rollout of Vermont Health Connect.
"This is not a distressed sort of situation. We are working cooperatively to make sure this has the best outcome possible for people who are in the exchange." - Lawrence Miller, chief of health reform for the Shumlin Administration
The state will pay CGI all but about $16 million of the $83 million maximum called for in the contract, despite the ongoing problems.
It’s a surprisingly amicable split for a relationship that began turning south early this year, when Shumlin told lawmakers that CGI has “under-performed at every turn.”
“This is not a distressed sort of situation,” Miller said Monday. “We are working cooperatively to make sure this has the best outcome possible for people who are in the exchange.”
The state will need CGI’s cooperation as it outsources the remainder of the project to Optum, another multi-national tech firm that has worked on exchanges in other states. CGI will stay on through at least Sept. 20, bringing Optum up to speed on key components of the exchange, and continuing the hosting services needed to run the operation.
Miller says he doesn’t know yet how much Optum will be paid to complete the project. In awarding the job to Optum, Miller bypassed the RFP process conventionally used for contracts of this magnitude. While the move might open the administration up to criticism, Miller says he can’t afford the 12 to 18 months the RFP process would take.
“We are undoubtedly going to get hammered. I don’t care,” Miller said. “Our job is to solve this, and to solve it with the best resources available… And that necessarily means making some judgments.”
The exchange’s myriad shortcomings have overshadowed its successes. With 66,000 people now covered by exchange plans, Vermont Health Connect has enrolled more residents per capita than any other exchange in the state.
But with nearly 15,000 people still unable to make simple changes to their health insurance policies, criticism of the new program has been severe. Lincoln Rep. Mike Fisher, the Democratic chairman of the House Committee on Health Care last week called the situation a quote “crisis.” Fisher has been unimpressed with CGI’s performance to date, and got word of the state’s break from CGI about an hour before reporters.
“So, I take it as good news,” Fisher said.
From his vantage point, Fisher said it’s hard to determine who’s responsible for the problems on the exchange.
“It’s hard to separate between our contractors and the administration,” he said.
Miller said the state deserves criticism for aspects of its handling of the rollout. But he said the scope of the project was far beyond what state or federal officials conceived when they first began constructing the exchange infrastructure.
“I do think it’s got to be recognized that this project has gone on much longer than expected, and many of the aspects have turned out to be more complex than expected,” he said.
Miller said CGI will be paid money for exchange components that aren’t yet fully functional, but should become so eventually.
“There are things that we are paying for that are not yet visible to Vermonters,” Miller said.
Republican critics of the state’s handling of the exchange are holding their own news conference Tuesday.
The exchange is a product of the federal Affordable Care Act, and each state either had to build its own, or let the federal government construct one on its behalf. So far, Vermont has spent about $91 million on its exchange, about 97 percent of which was paid for with federal dollars.
But while every state has an exchange, Vermont is the only state that requires small businesses and individuals to purchase their insurance through it. Shumlin waived that mandate for small businesses months ago, when it became apparent that Vermont Health Connect was having trouble processing enrollment data.
A pair of Republican lawmakers last week called on the administration to allow individuals to do so as well. Fisher said the idea has merit, and Miller said the administration is considering the proposal.
Miller said the switch to a new vendor comes at a time when the state can absorb the transition without impacting customer service. Miller said Optum will help not only to build the technological innards of Vermont Health Connect – such as the software, for example, needed to process consumers’ “change of circumstance” – but also to streamline business operations.
Miller said the state is also in the process of developing manual workarounds, so as to ensure a smooth renewal and enrollment process in the event that the technological issues aren’t resolved by fall.
Miller said he appreciates the level of customer dissatisfaction being experienced by the thousands of people for whom the exchange is not working.
“The fact that a lot of work has been accomplished in the background, I recognize we’re not going to get any particular credit for that until it’s actually where people can use it,” he said.
