Obama alerted to problems as early as March

A consulting firm’s assessment of the site warned of a lack of thorough testing

Department of Health and Human Services Secretary Kathleen Sebelius discusses the Affordable Care Act at a community center in Detroit on Nov. 15, 2013.
Joshua Lott/Getty Images

A report from a private consulting firm warned the Obama administration about potential problems with the federal health insurance enrollment website six months before its Oct. 1 launch date, according to a document disclosed to the House Energy and Commerce Committee.

In a 14-page report prepared by consultants from McKinsey & Co. (PDF) in March 2013, the administration was alerted that the website had not undergone enough end-to-end testing and that the program’s “significant dependency” on contractors was problematic — conclusions that seem remarkably prescient, given the site’s disastrous rollout. The Energy and Commerce Committee obtained the McKinsey assessment late Monday, as originally reported by The Washington Post.

The committee has launched an investigation into the botched rollout, where uninsured Americans in 36 states have been directed to sign up for individual health insurance plans in marketplaces run by the federal government. The Subcommittee on Oversight and Investigations will meet Tuesday to discuss the website’s security.

The Energy and Commerce Committee indicated that key administrators from the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS), including CMS chief Marilyn Tavenner and HHS Secretary Kathleen Sebelius, were briefed on the McKinsey report in late March and early April.

Sebelius, who was briefed on April 4, testified weeks later at an Energy and Commerce Committee meeting that “our energy and resources are focused on getting it ( up and running, and we are on track, and the contracts have been led, and we are monitoring it every step along the way.”

“Despite assurances from Secretary Sebelius, Marilyn Tavenner and (CMS deputy administrator) Gary Cohen that ‘all was well’ and ‘on track’ with the launch of the Affordable Care Act, we now have documents dating back to April that call into question what they told us,” Rep. Tim Murphy, R-Pa., chairman of the Subcommittee on Oversight and Investigations, said in a statement.

Energy and Commerce Committee Chairman Fred Upton, R-Mich., blasted the Obama administration over the McKinsey report, saying in a statement that “on April 18, Secretary Sebelius appeared before our committee, looked us in the eye and repeatedly testified everything was ‘on track and on time.’ We now know that was not the case and the secretary was aware implementation was in trouble.” 

The CMS said in a statement on Tuesday that the McKinsey review “was completed six months before the beginning of open enrollment, was in line with industry best practices and was followed by concrete action to address potential risks — as was intended. As we have said, CMS has continually evaluated progress and has taken steps to prioritize and address concerns and mitigate risks.”

For its part, McKinsey said Tuesday that it could not comment publicly on client projects because of the company’s confidentiality policy.

The report, which was based on a review of more than 200 documents related to the launch of and interviews with more than 40 people at HHS and the CMS, identified potential problems like the lack of thorough testing of the website and a “high risk of federal IT resource overload.”

It said the “most critical risks” to the marketplace implementation efforts included that “many functions are contractor dependent” and that the “ideal” iteration of the website would “minimize dependency on third parties.”

McKinsey also warned that when the report was commissioned, the design of was “still presumed to be open,” even though it was less than 180 days from the launch date — which could result in “materially higher risk of system instability.”

The report recommended a limited launch of the website rather than launching at “full volume” and raised red flags about “minimal testing” of the enrollment IT system’s links to a call center and the overall insufficient “end-to-end testing” of the website.

A potential problem that McKinsey identified that did not come to pass was the possible failure of the data hub, the federal repository of data used to verify applicants’ citizenship, income and eligibility for Medicaid, Medicare, Social Security and other benefits. It also warned about long waiting times at call centers helping people sign up for insurance. In recent weeks, the average call-center wait time has been about 30 seconds, according to the HHS blog.

President Barack Obama addressed the issue during a question and answer session Tuesday that followed his remarks at the Wall Street Journal CEO Council, an annual meeting of chief executives from around the globe.  

"The way the federal government does procurement and does IT is just generally not very efficient. In fact, there's probably no bigger gap between the private sector and the public sector than IT," Obama said. "What we probably needed to do on the front end was to blow up how we procure for IT, especially on a system this complicated. We did not do that successfully. Now, we are getting it fixed, but it would have been better to do it on the front end rather than the back end."

The Obama administration has promised that the problems with will be ironed out by the end of November. Though the website is still plagued by IT difficulties, a CMS spokeswoman told reporters Monday that 90 percent of users who had had trouble with the website succeeded in creating an account on their second attempt.

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