Failures in management led to ObamaCare website woes, investigation finds

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GAO: Administration failures led to healthcare.gov problems

Elizabeth Prann reports from Washington, D.C.

A failure of management by the Obama administration led to the disastrous rollout of the ObamaCare website and caused the government to incur tens of millions in additional costs, according to a congressional watchdog report released Wednesday.

The Government Accountability Office (GAO) concluded after a months-long investigation into the rocky rollout of Healthcare.gov that the Centers for Medicare & Medicaid Services’ failure to establish “effective planning or oversight practices” was to blame for website’s myriad problems after it was launched.

Among the issues, investigators found that the administration kept changing the contractors' marching orders for the HealthCare.gov website, creating widespread confusion and adding tens of millions of dollars in costs. Changes were ordered seemingly willy-nilly, including 40 times when government officials did not have the initial authority to incur additional costs.

As a result, the government has spent $840 million on Healthcare.gov and its supporting systems, according to the report.

"The rollout of the Affordable Care Act was an unmitigated disaster," Rep. Tim Murphy, R-Pa., said Thursday at a hearing on the matter held by a House Energy and Commerce subcommittee.

Testifying at the same hearing, Andy Slavitt, principal deputy administrator at CMS, said the agency has since implemented changes to improve the management of the ACA exchanges.

"We've created clear, top-down accountability," he said.

William Woods, a GAO contracting expert, said in prepared testimony that the government incurred "significant cost increases, schedule slips and delayed system functionality."

The “cost increases” include those for the glitchy computerized sign-up system for consumers, which ballooned from $56 million to more than $209 million from Sept. 2011 to Feb. 2014. The cost of the electronic backroom for verifying applicants' information jumped from $30 million to almost $85 million. A contract for fixes to the website, also grew from $91 million in January to $175 million as of last month.

Sen. Orrin Hatch, R-Utah, one of the lawmakers who requested the investigation, said in a statement Wednesday that the report “confirms our worst fears.”

“Millions of taxpayer dollars were wasted to build a website that didn't work, all because of bureaucratic incompetence,” he said.

Centers for Medicare and Medicaid Services spokesman Aaron Albright told the Associated Press that the administration takes its responsibility for contract oversight seriously and has already started carrying out improvements that go beyond GAO's recommendations. The congressional investigators recommended a cost control plan and other changes to establish clear procedures and improve oversight.

According to the report, the two contractors that initially took the lead building the system were Virginia-based CGI Federal, which built HealthCare.gov, and Maryland-based QSSI, which was responsible for an electronic back office that helps verify personal and financial information.

The consumer end of the system locked up the day it was launched, Oct. 1, and was down most of that initial month. The electronic back office had fewer problems.

A few months before the launch, the CMS agency notified CGI it was so dissatisfied that it would start withholding payments. Then it rescinded that decision.

CMS ultimately paid nearly all of CGI's $12.5 million in fees, withholding only $267,000, the report said. The agency later ended its contract with CGI. Another contractor, Accenture, was brought in to make website fixes.

Confronted with a public relations disaster, the White House sent in a troubleshooter, management consultant Jeff Zients. He removed CMS as project leader, relegating it to a supporting role. CMS administrator Marilyn Tavenner later personally apologized to Congress saying that "the website has not worked as well as it should."

Zients' rescue operation got the site working by early December. Eventually, some 8 million people managed to sign up, far exceeding expectations.

Nonetheless, Health and Human Services Secretary Kathleen Sebelius stepped down amid complaints by White House officials that the president was blind-sided by the problems.

The original contractors testified to Congress that they did not have nearly enough time to test the system before it went live.

Indeed, Tavenner took the unusual step of signing the operational security certificate for HealthCare.gov herself, after CMS security professionals balked. The site has since passed full security testing.

The GAO's findings added to earlier conclusions in a report by Zients after his team got the website to work.

Beyond a maze of technical problems, Zients said he found "inadequate management oversight and coordination" that "prevented real-time decision making and efficient responses."

The Associated Press contributed to this report