GAO: Poor planning, oversight led to HealthCare.gov debacle

WASHINGTON - Federal health officials were responsible for the problem-pocked start of HealthCare.gov last year because of poor planning and lax oversight of outside contractors, according to government investigators who warned that "significant risks remain" that some Americans could again have trouble buying coverage in the federal marketplace this fall.

Such management failures are the central conclusion of the first report issued by the Government Accountability Office as part of a wide-ranging appraisal of the reasons the computer system was not ready when the marketplace opened in October.

The initial slice of the GAO's work focuses on the main contractors the government hired to build HealthCare.gov, the website for the federal insurance exchange created under the Affordable Care Act. In particular, the report examines the shepherding of the contractors by the Centers for Medicare and Medicaid Services (CMS), the branch of the Department of Health and Human Services responsible for developing the marketplace.

Building "a first-of-its-kind marketplace" was certain to be a complex undertaking, the investigators conclude in the report, made public Wednesday. But agency officials aggravated the situation by allowing too little time for the work; changing the directions it gave the main contractor, CGI Federal; and not scrutinizing the contractor's progress, the investigators found.

The results, the GAO says, were "significant cost increases, schedule slips," and delays. Between September 2011 and February of this year, the cost for building the marketplace ballooned from $56 million to $209 million. Building HealthCare.gov, the report said, had cost $840 million as of earlier this year, the GAO found.

The report, planned as the centerpiece of a hearing Thursday morning before the House Energy and Commerce Committee's oversight and investigations subcommittee, provides a detailed, interior view of the now-familiar dynamics that led to what President Obama characterized as a disastrous launch. For the first months after the opening of the federal marketplace, on which three dozen states including Pennsylvania and New Jersey have relied, many people were stymied trying to shop for and buy health plans. By early spring, the end of the first enrollment window, the marketplace was working well enough that most insurance-seekers could get coverage, and 5.4 million people had signed up - more than predicted. More recent figures put the total above 10 million. The second sign-up period for people to renew coverage in the federal marketplace or buy a health plan for the first time begins Nov. 15.

Hours before the report became public Wednesday, federal health officials predicted that this next sign-up opportunity would go smoothly, in part because they are now relying on a different main contractor to finish building the computer system and they are monitoring the company more closely.

Although the report is largely retrospective, it includes a stern caution: "Unless CMS improves contract management and adheres to a structured governance process, significant risks remain that upcoming open enrollment periods could encounter challenges."

"We are going to have a successful second open enrollment," a senior CMS official said in briefing reporters on condition of anonymity. The official acknowledged, however, that "we know we have a lot of work to do to regain the trust of the American people."