By Meredith Cohn and Andrea K. Walker, The Baltimore Sun
10:50 PM EST, December 7, 2013
Although state officials have provided the public scant detail about the troubled launch of Maryland's version of Obamacare, emails and documents show that the project was beset behind the scenes for months by an array of technical issues, warring contractors and other problems.
Since Maryland's online health exchange opened Oct. 1 for people to buy insurance under the Affordable Care Act — and immediately crashed — the two main companies in charge of the website have taken their fight to court, a corporate project manager was replaced and a high-powered consulting firm was quietly brought in to restore order. Though state officials initially said the crash of the online exchange was an unexpected and fixable problem, emails and documents obtained by The Baltimore Sun through state open-records laws outline serious issues before and after the launch.
The revelations came just days before Rebecca Pearce, the head of the exchange, resigned. State officials announced that move Friday night and pulled Carolyn Quattrocki from the governor's health reform office to serve as an interim replacement.
Just two weeks before the launch, Pearce visited the prime contractor's Linthicum headquarters and found a room of empty seats. She fired off an email questioning the company's commitment to resolve problems and reminding the contractors of what was at stake: "Tonight, I am begging. I don't know how else to say it: we have got to make this a reality."
Despite her proddings, in-fighting between contractor Noridian Healthcare Solutions and a key subcontractor, EngagePoint Inc., disintegrated amid finger-pointing and accusations in court papers. At one point, after Noridian severed contractual ties between the companies but continued to ask for help, EngagePoint CEO Pradeep Goel emailed Noridian officials: "Are you people on crack cocaine?"
Today, the exchange website, called the Maryland Health Connection, is still not operating properly for all users, and officials are scrambling to meet deadlines for the public to obtain coverage. The problems have triggered criticism from some political pundits and have proven embarrassing for Gov. Martin O'Malley and other state officials who touted the website before its launch.
Asked about the conflict between the project's contractors, Health Secretary Dr. Joshua Sharfstein said in an interview, "It's sort of like hiring a husband-and-wife team to do your roof and then they get divorced. The dispute did adversely affect the project. It was a distraction as we were launching the website and then working to address problems."
Lt. Gov. Anthony G. Brown, chosen by O'Malley to lead the state's reform efforts, claimed ultimate responsibility for the website problems last week after facing increased media and political pressure. But he said in a later interview that he had focused mainly on legislative and policy issues and depended on operational updates from Pearce's office. The reports noted everything was running smoothly and on track until September, when only minor problems were reported, he said.
"I certainly had the responsibility to ensure that if there were problems that required additional resources — changes in legislation or policies — that my responsibility was to make sure the exchange got what it needed," Brown said in an interview Friday. "And I relied on the reports that I received on the exchange. …But at no point was a red flag ever brought to my attention as if we have a problem here, we are not going to meet the launch date, or if we do meet the launch date we are going to significantly underperform."
Brown said the exchange was created as an independent agency with autonomy. Its board is chaired by Sharfstein and includes heads of the state's health care commission and insurance administration.
Sharfstein and other health department employees were copied on a number of emails that discussed problems with the exchange. Sharfstein and Brown are co-chairmen of the overarching Health Care Reform Coordinating Council, which is charged with implementing Obamacare in the state.
The shake-up at the health exchange began last week. O'Malley and Brown charged the state's chief technology officer with overseeing fixes and put Sharfstein in charge of operations, taking away Pearce's main responsibilities in managing the exchange. A few days later, she resigned.
Pearce, who was hired in 2011 at a salary of $175,000, declined to comment on problems surrounding the exchange or her resignation.
The emails provided by the state covered the two weeks before and after the website launch. They give only a limited behind-the-scenes view of creating and launching the exchange. Officials withheld an unknown number of emails, saying state law exempts them from disclosure because they involved the decision-making process of high-ranking executive officials.
The troubles in Maryland mirror problems faced by other state exchanges, as well as the federal portal providing insurance options to consumers in 36 states.
The exchanges' bumpy rollout has galvanized critics of the health law, including Republicans in Congress who say it was fresh evidence that the entire plan should be scrapped. In Maryland, the toughest criticism has come from website users who have struggled to buy insurance, as well as political opponents of Brown, a candidate for governor. They say he bears responsibility as the state's point man on health care reform.
O'Malley has also been a target of critics. He recently said that he wanted the website's major technical problems fixed by mid-December. That statement came a day after Sharfstein told state lawmakers it was unclear when the site would be entirely free of glitches — an answer that drew criticism from Republicans and some Democrats.
Technology experts and those involved in setting up the websites say they are among the most complex web endeavors ever undertaken. State officials say there wasn't sufficient time to test the sites after the federal government released regulations related to the Affordable Care Act, and there was no pre-launch access to federal computers used to check consumers' eligibility for subsidies.
In Maryland, Sharfstein said the complexity was compounded because of an aging state Medicaid computer system that needed to be integrated into the exchange. Officials also chose to customize existing technology that proved tougher to retrofit than expected, he said.
"Unlike buying a book online from Amazon, this process is more akin to applying for a passport, buying a home, and receiving an individually calculated tax credit all through a single web portal," O'Malley said Friday night. "We had more user glitches and user problems than we had hoped.
"A longer testing period might have allowed us to prioritize and address more of these problems before the launch date. Time and ultimate success will tell whether the decision to purchase off-the-shelf software and employ multiple contractor entities were good or bad decisions."
In early 2012, the state gave a $71 million contract to develop the website to a Noridian-led team that included Curam Software, IBM and Connecture. To save time in creating the exchange, the Maryland legislature exempted the contract from the normal procurement process, and North Dakota-based Noridian outscored three other bidders.
Sharfstein said Noridian will likely remain at work in its Linthicum offices beyond its contract's year-end expiration. The company has already been paid about $57 million but the state contract allows penalties for delays. State officials declined to comment on whether any penalties will be sought.
Noridian is ultimately responsible for delivering the system, Sharfstein said. EngagePoint, which is based in Calverton, was not included in the original contract and appeared to have been hired without the exchange's knowledge, officials said.
The state first learned of the companies' "deep strains" in the three months before the website launched, according to documents in U.S. District Court in Baltimore. The issues disputed included accounting, project management, intellectual property and payment.
Emails offer a glimpse at how their differences affected efforts to build the site and then fix post-launch problems. Pearce repeatedly questioned the contractors' commitment to the project after Gov. Martin O'Malley announced on national TV that Maryland's site would go live on time.
On Sept. 22, after Sen. Barbara Mikulski echoed the governor in publicly applauding Maryland's readiness, Pearce wrote the contractors: "It's time to get this right. Now. Period."
Noridian was also criticizing the subcontractor it hired. On Sept. 25, Noridian's project manager wrote to Goel, complaining that EngagePoint refused to perform critical work: "EngagePoint is responsible for 'designing and implementing [an exchange] system,'" the project manager wrote.
The 8 a.m. launch was supposed to allow the estimated 800,000 uninsured Marylanders to sign in and browse 45 plans from six insurers. Officials had warned of "bumps in the road," but the site crashed in minutes.
The state provided few emails from the first day. In one, contractors said they would work on the firewall; Sharfstein said later in an interview that it was eventually altered to allow more users onto the site.
Problems persisted the next day. Pearce repeatedly asked for updates, but the answers appeared unsatisfactory, emails show.
"As the executives in charge of this program, I would like to understand from you exactly what is happening with the project and what you are doing to address the issues," she wrote to the contractors at 7:56 a.m. on Oct. 2. By 4:10 p.m., she questioned why 85,000 people had hit the "get started" button, but there fewer than 500 accounts had been created.
About a half-hour later, she wrote to the contractors, "Can you please provide an update on what is going on right now? Who is on site? What has anyone learned?"
Some of the companies' emails focused on achievements rather than dwelling on worsening problems.
Noridian CEO Tom McGraw wrote to state officials on Oct. 4, "We have seen increases in all aspects of the system performance over the last several hours and anticipate that these will start showing in the next report."
But four days later McGraw notified state officials that the project manager was being replaced.
Meanwhile, Marylanders like Luke Goembel were stymied by a host of problems that included frozen screens, problems with verification and difficulty creating accounts.
When the website opened, the Baltimore scientist tried to buy insurance for his family, but got an error message. Three days later, Goembel got a message to call customer service.
Goembel tried the website again that day, but says that after entering information about his identity, the site froze. Later he got a "server error" message. And still he had no online account.
Customer service started a paper application for him on Oct. 18.
Over the next month, Goembel finally was able to create an account, but before he could buy a plan for his family of four with subsidies, he had to repeatedly call for help, enter the same information over and over online, tolerate error messages and recheck his eligibility for assistance three times.
Eventually, the family was enrolled in a plan significantly better and 40 percent cheaper than his previous coverage, with dental insurance.
Still, he's angry about the delays. "The Maryland system is severely flawed," he says. "The state was sold a bill of goods."
Soon after the website's launch, emails among the contractors and exchange officials began to focus more on the dispute between Noridian and EngagePoint.
Chuck Milligan, who heads the state's Medicaid program, whose recipients will eventually use the exchange, complained that the contractors were too distracted by a new argument over who should be the state's prime contractor. The companies had proposed that EngagePoint take over as the prime contractor, but state officials said there was no time to consider such a shift.
"We do not have time to waste," he emailed the contractors. "We hope your email was not intended to convey that the team will not proceed with conviction while it awaits the resolution of the prime issue."
The top executive at Noridian also stepped in by mid-month, holding a meeting with contractors, state officials and consultants it hired from McKinsey & Company, a global management consulting firm. McKinsey was hired at the state's suggestion, but paid for by Noridian.
Paul von Ebers, CEO of Noridian Mutual Insurance Co., Noridian's parent company, wrote on Oct. 10 that the consultants "expressed concern with ongoing coordination issues between the Noridian and EngagePoint teams." He requested a meeting to resolve "working differences" between the companies.
This was days before Noridian fired EngagePoint, sparking the angry email exchanges and dueling lawsuits between the companies. Noridian then sought to hire EngagePoint workers; EngagePoint sued and was met with a counter-suit.
"We are expected to do piecemeal work for Noridian after contract termination because you just woke up and decided you don't know what you are doing?" Goel wrote Oct. 26. "We are not going to respond to ridiculous emails from Noridian demanding our team members show up for work after being escorted out of the office."
Noridian's McGraw declined to be interviewed but said in a statement that his company was responsible for designing and implementing the system. It is a work in progress, he added.
"The complexity of this project has led to a number of major issues beyond what was anticipated; one example is federal regulations that redefined the system's requirements during development," he said in the statement. "Noridian and subcontractors have been working to systematically identify the cause and resolve each issue."
He declined to comment on the litigation with EngagePoint.
Goel, the EngagePoint CEO, said in a telephone interview that he was never told his company's work was unsatisfactory. The conflict with Noridian at first involved the way the project was being managed, he said.
After EngagePoint's firing, the companies battled over $6 million that EngagePoint said it is owed for work, Goel said. He also said Noridian wants to hold EngagePoint responsible for certain financial obligations, such as potential state penalties for missing performance goals, even though it is no longer part of the contract.
Goel said problems with the exchange lie with the complexity of the job, connecting federal, state and insurer sites for the first time ever.
"It's not like Legos where everything is designed by the same company and fits beautifully," he said. "You're trying to get all the pieces to talk to each other."
He admits that emotions were running high immediately after the firing, but said he wants the exchange to succeed and has given Noridian information when asked.
EngagePoint also has contracts to work on exchanges in other states, including Minnesota. A spokeswoman for the Minnesota exchange said officials in that state have been happy with the company's work.
Improvements have been made to Maryland's website, officials said, including easing the firewall, increasing memory and rewriting code to reduce errors. Combined, they have made the site "far more functional" than it was on Oct. 1, Sharfstein said.
As of Friday, 3,758 people were enrolled in private insurance plans. More than 97,000 are expected to gain coverage under Medicaid. And officials maintain that their goal is to sign up 150,000 in private plans by the March 31 deadline for Americans to buy insurance or face a penalty.
Larry Burgee, an associate professor of information systems at Stevenson University, says Maryland could have avoided problems with better planning. For example, states should not have all tried to create their own sites but rather should have pooled resources, tested a few systems and all gone with the best, said Burgee, who teaches a class on the federal exchange website.
He added, "All this money was spent, and in Maryland we hear about two companies fighting. ... People at the top need to take the fall for this."
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