$72 million spent on Vermont Health Connect to date

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$72 million spent on Vermont Health Connect to date

Tue, 06/17/2014 - 4:39am -- tim

by Morgan True vtdigger.org The state has spent $72 million as of Friday building Vermont Health Connect, the federally mandated online insurance marketplace, according to state officials. Vermont is one of 12 states plus the District of Columbia that is still working to build its own exchange instead of using the federal healthcare.gov. Of the 16 states and DC that applied to build their own exchanges, Nevada was the most recent to scrap its effort in May. The feds earmarked $4.69 billion in grants for states to build their own exchanges. Vermont has $171 million earmarked for the creation of its exchange. The state has roughly $100 million left to get the job done.

Vermont Health Connect has helped 144,500 Vermonters get health coverage. More than half, 80,400, were enrolled in Medicaid, many as a result of the program’s expansion under the Affordable Care Act.

However, the website was launched with significant problems, and eight months later it is still incomplete. State officials said this week that they will continue to rely on the two participating insurance carriers to enroll small businesses throughout the upcoming open enrollment period that begins November 15. There are currently 34,800 people in that group.

There are also 29,300 people in the individual market who purchased commercial insurance. More than half, 62 percent, qualified for subsidies that lower the cost of those plans, though advocates say they are often still difficult to afford.

For many people in the individual market, and to a lesser extent people enrolled in Medicaid through Vermont Health Connect, using the website has been a frustrating process.

The largest problem is that there is no way for people to make changes to their coverage online. To make changes people must contact the call center.

Lawrence Miller, former secretary of the Agency of Commerce and Community Development, now leads the state’s health care reform effort. VERY TOP PHOTO: VHC Navigator Peter Sterling, VHC chief Mark Larson and Miller on the opening day of VHC, October 1, 2013. Photos by Vermont Business Magazine.

“Most of the time involved is involved in reaching out to Vermonters and finding out what exactly they want today compared to when they filed their service request and then reconciling that,” said Lawrence Miller, chief of Health Care Reform, who was assigned to the Department of Vermont Health Access in January to help complete the project.

Battling the backlog

Some of the requests for changes date back to last year, and a person’s circumstances may have changed multiple times in that period.

There are more than 10,000 people who need to make a change, most of whom are paying commercial premiums, according to the most recent figures from the Department of Vermont Health Access.

The state has had difficulty managing its primary vendor, the Canadian technology firm CGI, which continues to miss contract deadlines. Last week CGI missed a deadline for enabling users to make change of circumstance adjustments to their online applications through the website.

Vermont Health Connect officials say they are making progress on the change of circumstance functionality, but they won’t move forward until testing is complete.

The state recently signed a new $6 million contract with another health IT company to help it work through the backlog of change requests.

The state has spent roughly $52 million on its contract with CGI, which is worth a total of $84 million. Vermont was able to impose $5 million in penalties from the original contract, and the revised contract has a possible $2 million in additional penalties that could be imposed on CGI.

State officials have been reluctant to discuss whether they’re having difficulty holding CGI accountable for work that has not been completed.

“The question of accountability and contractual issues, those are for the lawyers to discuss, but on a day-to-day basis when you’re working with nine different major systems that need to get tied together, when it’s more complicated than people expect … it’s more complicated and it takes more time,” Miller said. “It’s not just that CGI didn’t finish their work, we have more work to do as well.”

State officials have not said when they expect users to be able to make account changes online.

The focus for completing the project has begun to shift from the dates in the revised contract, which envisions the project being completed in July, to having everything related to the individual market ready for the Nov. 15 start of open enrollment.

Miller said this week that the department won’t ask small businesses to use the website during the next open enrollment period.

In addition to the change of circumstance function, Vermont Health Connect is unable to offer coverage renewals through the website. Miller said the state has explored other options for renewal “at the conceptual level,” but there are no contingency plans in place at this time.

The federal earmarks are only available through the end of the year, making it crucial that states complete their exchanges by then. Any portion of Vermont Health Connect that is not completed by then will likely become a state expense.

A March report to members of Congress from the Congressional Research Service states, “For each fiscal year, the HHS Secretary is to determine the total amount that will be made available to each state for exchange grants. No grant may be awarded after January 1, 2015.”

However, Vermont Health Connect spokeswoman Emily Yahr said in an email that, “it is our expectation that funding will be extended.”

Gov. Peter Shumlin has said he will work with the governors of other states that are building exchanges to lobby for a deadline extension.

Miller: No state has an automated process

Miller said Vermont has made progress similar to other states building their own exchanges. He said that he was not aware of any other state exchange that allows users to make changes online.

“As you see across the country nobody has finished this part yet,” Miller said, “If I was looking at a whole bunch of people who have been successful with automated (change of circumstance) and we were still way behind I’d feel a little bit different.

“I don’t know of any state who has an automated process yet. There may be a couple, but I haven’t been able to confirm that,” he said, “Most people that I know are doing a combination of what’s automated and what’s manual with a lot of back-office support.”

Access Health CT, Connecticut’s exchange is widely seen as a high functioning exchange, and according to its communications director, Kathy Tallarita, users are able to make all types of changes through its website.

“According to James Wadleigh, our CIO, change of income, adding a family member and correcting an address can all be completed by the consumer on our consumer website,” Tallarita wrote in an email.

In a follow-up interview, Miller clarified that his information was coming from conversations with contractors and consultants working on exchanges in multiple states and conversations with Lindsey Tucker, deputy commissioner for Vermont Health Connect.

He said the Connecticut website is likely a successful outlier.

Tucker has weekly conference calls with the directors of exchanges in other states, Miller said, though he did not know which states participated.

On one of those calls Tucker asked the other directors if they had automated their change of circumstance function, and none had reached that point, Miller said.

The online change of circumstance is new to the insurance industry, Miller said, and most private companies rely on telephone operators to make adjustments to applications.

Maryland, another state that has struggled to build its own exchange, is planning to use free software developed by Connecticut to overhaul its website, according to a Washington Post report.

That is not an option for Vermont, Miller said, because the software would not be compatible with the Oracle software Vermont is using to underpin its exchange.

In New Hampshire, which is relying on the federal healthcare.gov, Jayme Simoes with Covering New Hampshire, said the federal website allows people to make changes in their coverage.

New Hampshire received close to $8 million in federal grants to encourage residents to purchase insurance through healthcare.gov and, as of March, had spent only $4 million.

Simoes said that after a rocky start, the federal website began working smoothly for people in New Hampshire in mid-November. The state has 40,262 people that joined the individual market through the exchange, he said.

New Hampshire is in the process of expanding Medicaid and, unlike Vermont, it did not require small businesses to use the exchange in the first year.

Vermont has five months until open enrollment starts and seven months until its federal earmark – the remaining $100 million – is expected to go away.

That means it’s crunch time for the state and contracts who have worked long hours for more than a year trying to complete a first-of-its-kind project.