Last week, there were so many reported IT snags, snarls and snafus that I felt like the couple who finally won the 20-year jackpot on the Lion’s Share slot machine at the Las Vegas MGM Grand casino. Among IT Hiccups of note was the routine maintenance oofta at Time Warner Cable Wednesday morning that knocked out Internet and on demand service across the US for over 11 million of its customers and continued to cause other service issues for several days afterward; the “coding error” missed for six years by German Deutsche Bank that caused the misreporting to the UK government of 29.4 million equity swaps, with buys being reported as sales and vice versa; and the rather hilarious software bugs in the new Madden NFL 15 American football game, which has players flying around the field in interesting ways.
However, for this week, we just can’t ignore yet another Healthcare.gov snafu of major proportions. Last week, USAToday reported that the Centers for Medicare and Medicaid Services sent letters to 310,000 people who enrolled for health insurance through the federal website asking for proof of citizenship or immigration status by 5 September or they were going to lose their health insurance at the end of September.
Unfortunately, an untold number of those enrollees sent letters have indeed previously sent the information to CMS, but the information either hasn’t been properly processed or it has been lost by CMS. Even resending the requested information electronically doesn’t always work because of ongoing technical issues with the Healthcare.gov website, USAToday reports. Insurance agents, for example, complain that they are uploading the documentation CMS requested. That information seems to be accepted without an issue, but later CMS says it never received it.
Other enrollees are affected because of data integrity issues with Department of Homeland Security and Social Security Administration databases, for instance, first and last name transpositions. Compounding the problem, USAToday says, is that back in April all user passwords were reset because of the Heartbleed bug. Not unexpectedly, lots of people can’t remember the answers to their security questions, which means that they can’t reset their passwords, which in turn means no online access to their accounts and no way to upload their documentation.
The problem of losing information is not confined to the federal site, either. Last week, the Las Vegas Journal-Review reported that some 10,000 out of the 30,000 enrollees to Nevada’s health insurance exchange are having billing and other coverage issues with their insurance plans. It is not uncommon, the Journal-Review stated, for enrollees to have paid their premiums in full and on time, have bank statements showing withdrawals to prove it, yet still be told they never paid their premiums. Inevitably, the premium “nonpayment” leads to a cancellation of their insurance policies, with the enrollees unfairly stuck with paying their medical bills.
In addition, while the state knows of the problems, the Journal-Review says, it doesn't know to how to deal with them. It seems that the health exchange developer, Xerox, has fouled up the enroll insurance premium billing system so badly that the issue may not be fully resolved until next year when Xerox’s contract expires and the federal government takes over Nevada’s health insurance exchange. In May, Nevada fired Xerox over its inability to fix over 1,500 software issues with insurance exchange.
Also last week, things heated up between Oracle and the state of Oregon over the “who’s at fault” argument concerning the $305 million Cover Oregon health insurance exchange debacle. In early August, Oracle sued (pdf) Oregon in federal district court for $23 million over unpaid bills and interest, alleging that Oregon breached its contract with the company.
Well, Oregon has fired back with a lawsuit of its own. Saying that, “Oracle sold the State of Oregon a lie,” Oregon Attorney General Ellen Rosenblum filled a fraud and racketeering lawsuit (pdf) against Oracle for a whopping $5.5 billion. The state also wants to keep Oracle from contracting with any of Oregon’s public corporations or government organizations in the future.
Predictably, each party asserts that the claims against them have no merit, and that they will each prevail in court. I doubt either party really wants to go to trial, since it will no doubt highly embarrass them both for their utter IT project management amateurism and risk mismanagement. I expect — but not before a pack of ravenous lawyers get paid a whole bunch of money — an out-of-court settlement where both sides can claim victory. However, that won’t like happen before each side tries to cause as much grief for the other as possible.
In one last Healthcare.gov note of interest, the U.S. Department of Health and Human Services Inspector General published a report (pdf) on the support contracts given to build the less than stellar federal health insurance exchange. The IG report says that as of February, 33 contractors operating under 60 different contracts have been used to implement the exchange. The contractors have been paid more than $500 million as of February with another expected before the end of the year. Some 20 of the 60 contracts have exceeded their contracted amounts, with 7 of those contracts (so far) exceeding the amount by over 100 percent.
At least $700 million more is estimated to be needed for system maintenance and upgrades, but I suspect that number is highly underestimated given the system’s complexity, the unruly herd of uncoordinated contractors, and the overmatched government oversight involved.
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