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Maryland lawmakers cautious about new health exchange

Monica Caballeros, of Hartford, (right) a bi-lingual outreach worker, answers questions for Stanislawa Rodriguez, of New Britain, about obtaining health insurance through Connecticut's new health exchange at Access Health CT's newly opened storefront in New Britain Tuesday.

As Maryland prepares for a major overhaul of its troubled health exchange — switching out its buggy software for Connecticut's proven technology — lawmakers and information technology experts are raising new concerns about whether there is enough oversight to prevent a second failure.

State legislators from both parties said building a successful site will take more than plugging in new software — a view echoed by technology experts. While cautiously optimistic about the switch, lawmakers don't want to see the same management problems and potential waste of taxpayer money that plagued the creation of the exchange.


"Software is the core of the exchange, but how you manage the development, implementation and testing of the software is as critical as the software itself," said Dan Schuyler, senior director of the exchange practice of Leavitt Partners, a health intelligence and health care consulting firm.

Several lawmakers also said their confidence in the exchange leadership is shaky. They want more transparency in decision-making and spending on the exchange, which has cost $129 million so far.


Del. Mary-Dulany James of Harford County, chairwoman of a key House subcommittee that oversees spending on the exchange, said there are "huge budgetary implications" in switching to the Connecticut model.

Maryland officials have been "opaque" about how much it would cost, said James, a Democrat. Without clear evidence of major staffing changes at the exchange, James said, there continues to be "an issue of confidence in the people that were there before the rollout. And it's a question mark about the competency of those same people."

While acknowledging that she is not a technology expert, James said the shift to technology used by Connecticut is likely more complicated than is being portrayed.

"I don't think it's as simple as flipping a switch," James said. "We just can't make this mistake going forward."

The Maryland exchange crashed Oct. 1, the day it was launched, and has been riddled with technical problems such as frozen screens and locked accounts throughout the enrollment period that ended March 31. The troubles became a hot political issue, and as the state struggled to right the project, it cut ties with the exchange's executive director and Noridian Healthcare Solutions, the prime contractor.

Officials said they exceeded the total enrollment goal of 260,000, with more than 295,000 Maryland residents signing up for coverage, mostly through Medicaid, during the enrollment period.

State officials also had hoped to enroll 150,000 Marylanders in private insurance plans but changed that goal to 70,000 in February, blaming a mistake by researchers. They missed that goal as 63,002 Marylanders enrolled in private health plans through the exchange.

Concerns about the possibility of continued problems arose even before the board overseeing Maryland's health exchange voted unanimously Tuesday to ask federal officials for their approval — and $40 million to $50 million more in funding — to hire Deloitte Consulting to replicate its work on the exchange in Connecticut.


"In essence, our team is starting over again," said Senate President Thomas V. Mike Miller, a Democrat from Calvert County who has offered blunt assessments of the exchange's shortcomings. He said the Connecticut system's success gives him optimism about improving on Maryland's first attempt to build an exchange. "Obviously, everyone was let down, in terms of the outcome, including the taxpayers."

Experts said successful exchange sites have strong oversight, focus on core needs and employ appropriate, high-quality technology.

Failures in Maryland and other states can be attributed to many factors, said Rick Howard, a research director at Gartner, an information technology research and advisory company. When combined, they "exponentially add risk," he said. He pointed to software engineering skills and technology that were not up to the task, failure to manage the project's scope or accurately assess progress so problems could be fixed early.

Gov. Martin O'Malley and members of his administration say more safeguards are in place now. Whether that is enough to satisfy lawmakers remains to be seen.

O'Malley said Friday that the state is hiring a company to do independent audits of how the Connecticut fix would be implemented. Maryland Health Secretary Dr. Joshua M. Sharfstein, chairman of the state exchange board, said that unlike the first effort, this one will be overseen by the state's top IT professional, Isabel FitzGerald, secretary of the Department of Information Technology.

In testimony before lawmakers last week, FitzGerald said technical changes are necessary to make the Connecticut platform work with Maryland's, but "the only things we are changing are very small, and we're only doing retrofitting."


Connecticut's exchange has been lauded as one of the success stories of health reform, signing up close to 200,000 people. That system worked better because it was simple and well-managed, experts said. Deloitte, which built the technology for Connecticut, has worked on other successful sites around the country, including those in Washington, Rhode Island and Kentucky.

IT companies will try to sell all the latest technologies, and it is up to the state to choose the right products and provide oversight, Schuyler said.

"It's very seductive when you hear what fancy technology can do," said Kevin Counihan, CEO of the Connecticut exchange. "We didn't think the contractors could get done everything they said they could get done. The time frame was so tight. We though we were better off doing fewer things well."

Like Maryland, Connecticut had a quasi-governmental agency with an appointed board and executive director structure to create and run its exchange. It used some software code written by IBM — the same company that provided key software for Maryland's system.

Connecticut officials said they decided what features were essential to have in place from the start and what could wait. They also quickly addressed problems, such as adding agents when consumers complained about long waits at the call center.

Sharfstein, O'Malley and others have heavily criticized the technology used by Maryland's prime contractor, Noridian Healthcare Solutions, which included software to determine eligibility that was written by IBM. Sharfstein said the "off-the-shelf" technology did not perform as promised and was not easily altered.


In testimony before Congress last week, Sharfstein said Maryland plans to sue contractors and would reimburse the federal government for some of the money spent to build the first exchange if the state recoups.

In turn, IBM and Noridian have blamed state managers and government regulators for many of the problems.

IBM has said that it has worked above its contractual obligations to "overcome the state's failure to properly manage the implementation of the exchange." The Deloitte technology includes IBM software that was customized for the exchanges.

Noridian said in a lengthy statement released Friday that many of its problems stemmed from requirements dictated by state and federal regulations. For instance, federal regulations required users to be locked out of the system after three unsuccessful log-in attempts. Account lockouts were one of the biggest problems with the site.

"With the adoption of the Connecticut exchange platform, Maryland is now pursuing a simpler, streamlined system that does not contain the enhanced capabilities and features that the State demanded of Noridian after contract award, and that led to many of the system problems," Noridian's statement said.

Despite assurances from the O'Malley administration that the Connecticut fix would work, several lawmakers remain concerned that they were not included in the decision-making.


"We've been completely cut out of the loop," said Del. Kathy Szeliga, a Republican from Baltimore County.

She said the O'Malley administration will have "to own this decision. They haven't asked for any input or advice. Clearly, it's not an issue of partisanship. They've cut everybody out of the exchange."

Del. Susan W. Krebs, a Republican from Carroll County, said she doesn't have full confidence the state will succeed in light of how the first exchange crashed.

"They tried to do too much too fast," she said. "They keep talking about the contractors, but there's a lot of blame to go around."

Some legislative leaders and administration officials were briefed about potential problems with Maryland's exchange months before it launched, through a consultant's reports. But major changes in the exchange did not come until after the disastrous launch.

Howard said buying into Connecticut's "exchange-in-a-box" proposal would be the fastest way to get a new website up and running in Maryland. But Maryland declined the offer to have that state develop and run its exchange from Connecticut's servers.


"Technology is just one differentiator among the states that had a greater relative success in implementing their marketplaces versus those that did not," he said. "The clock is ticking. Nov. 15 is fast approaching, and Maryland has no margin for error."

Others agreed that Maryland has to do more than adopt new software to make the exchange work properly.

The keys are good products, good vendors and the less "intangible issue of leadership and oversight," said Sabrina Corlette, senior research fellow and project director at the Georgetown University Health Policy Institute's Center on Health Insurance Reforms.

She added, "I don't want to minimize the value of just plain dumb luck."

Del. Peter A. Hammen, a Baltimore Democrat and chairman of the Health and Government Operations Committee, said regular updates or discussion about the decision the state would make to replace the exchange "would have been helpful." But at this point, Hammen said, he's looking forward to making sure the state's system works when the next open enrollment period begins in November.

Since the crash in October, the state has made changes that bode well for ensuring that the Connecticut model will be up and running by November, said Sen. Thomas "Mac" Middleton, chairman of the Finance Committee and one of the lawmakers overseeing a panel looking into the exchange.


"They've got somebody who knows this stuff to advise them," the Democrat said, referring to Optum/QSSI, the contractor that took over in December.

The state has also transferred authority over the day-to-day technology decisions to FitzGerald. Those two major changes, Middleton said, resolve what he found to be the key problem with the exchange before the rollout.

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"This has been a management issue," he said.

FitzGerald told state lawmakers last week: "We are going to be ready on Nov. 15."

"That's a promise?" Middleton asked.

FitzGerald said there are a lot of reasons to expect that to happen, but "I never make promises."