Tuesday, December 30, 2014

Cost of Healthcare.gov Exceeds $2.2B After Latest Contract Award

    With the announcement Monday of a five-year, $563 million contract award to Accenture, the Healthcare.gov contractor that rescued the Obamacare marketplace after 2013's disastrous launch, the total cost of the site will well exceed $2.2 billion. The new award is on top of the $1.7 billion in contracts reported by the inspector general (OIG) of the Department of Health and Human Services (HHS) in August.
    Accenture was first hired in January after HHS replaced CGI Federal, the original contractor. Accenture reported the new award on its website, noting that not only will the company maintain current services, but is expanding its work to include the small business health plans marketplace (SHOP), and will also assist those state-based exchanges that have decided to transition to the federal site:
As the 2014 enrollment period closed successfully with Accenture’s support, work began to prepare for the 2015 enrollment. Accenture focused on simplifying the process for issuers to update plans, and implemented tools and processes to expedite the resolution of citizen inquiries.  At the same time, Accenture worked with CMS to find new ways to streamline and improve the customer experience. CMS later expanded Accenture’s scope of work to include enhancements and additional functionality of the FFM, the SHOP and state-based exchange transitions.  All of these efforts helped create a successful launch of the 2015 Open Enrollment season that continues through February 15, 2015.
     Although the transition from CGI Federal to Accenture appears to have been successful, the government is still struggling with other aspects of the marketplace. Although Hewlett-Packard was selected to replace Verizon (Terremark) in June 2013 as the host for Healthcare.gov, Verizon was awarded an emergency contract just four weeks before the current open enrollment period began, extending its contract into 2015. The new Hewlett-Packard system is acting only as backup system and a "development environment" for the current open enrollment period.

Note: A version of this post first appeared at The Weekly Standard.

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