State, CGI agree to part ways in September

Lawrence Miller, Secretary of the Agency of Commerce and Community Development, speaks at a press conference with Governor Peter Shumlin. VTD Photo/Taylor Dobbs

Lawrence Miller and Gov. Peter Shumlin. VTDigger file photo

After months of pressuring CGI to repair the state’s dysfunctional health care exchange website, the state of Vermont is finally cutting ties with the IT firm.

Lawrence Miller, chief of health care reform, announced Monday that the state has reached an exit agreement with the Canadian technology company and the remaining Web development work that needs to be finished will be carried out by OptumInsight, a subsidiary of UnitedHealth Group, a national insurance company.

Miller said there will be no disruption for Vermonters who are already served by the exchange as a result of the transition. He described the state’s relationship with CGI as “extremely cooperative.”

The state has paid $57 million for Vermont Health Connect, and the website, after more than a year of development work, still cannot handle insurance coverage renewals or changes to circumstances in a patient’s coverage, such as a birth, marriage, divorce or death.

Under the terms of the mutual agreement, the state will pay for services completed that Miller described as “background development.” Outstanding penalties and holdbacks will be applied to the original $83 million contract, and the state is expected to pay a total of about $67 million to the company.

Maintenance and operations will be transitioned from CGI to Optum over the next 60 days. The state is scheduled to pay CGI an additional $9.7 million on Sept. 20 for completed work. The company will continue to offer web-hosting services.

Linda Odorisio, vice president of global communications at CGI, defended the company’s work in Vermont.

CGI headquarters in Montreal. VTDigger photo

CGI headquarters in Montreal. VTDigger photo

“CGI is proud of the role it played in helping 85 percent of eligible Vermonters enroll in a health plan via Vermont Health Connect,” she said in a statement. “With a majority of our exchange development work complete, we look forward to providing ongoing hosting services in Vermont for one of the country’s most successful health care exchanges.”

Miller said CGI had completed much of the background work. Optum and CGI workers will begin testing the functionality of a series of features in the coming weeks. This is an appropriate time, he said, to make sure nothing was missed. The testing process “will not be quick,” he cautioned. “We’ll be running through every scenario, to find out what’s broken and fixing it.”

The state is hoping to have a “smooth renewal process in place in time for open enrollment,” which begins Nov. 15. An alternative paper process will remain in place as a back-up. Individuals who do not have insurance, Medicaid recipients and businesses with 50 or fewer workers are required under Vermont law to buy insurance through the exchange. Because of problems with the Vermont Health Connect website, these companies will be allowed to sign up employees for health exchange insurance coverage directly through insurance carriers.

Miller said allowing individuals to go directly to carriers for insurance could be problematic because many are eligible for subsidies, which are only available through Vermont Health Connect.

The terms of the agreement have been under way “for a while,” Miller said. “We were able to come to the conclusion this is the appropriate time last week.”

The state is still negotiating a contract with Optum. The company has a contract for about $5.7 million under its current agreement with the state. Miller said the total cost of the project would likely exceed $83 million.

Optum was initially hired to help the state address a backlog of more than 14,000 Vermonters who were not able to make changes to their online health care insurance profiles. In addition, Optum was asked to review CGI’s tech work.

Optum did not go through a request for proposal bidding process. Miller defended his decision to hire the company after a series of interviews with other tech firms.

“The state RFP process, even an abbreviated RFP process, takes forever,” Miller said. “The big question is, why the hell didn’t we do this months ago — because it takes months, and I’m not going to sign up for an 18-month RFP process.”

Miller said the state interviewed contractors and it came down to which one had the bandwidth and brain power to pull the project off.

“We are going to get hammered (for the no-bid process), and I don’t care, our job is to solve this with best resources we’ve got available, in the time we’ve got available,” Miller said.

In addition, Miller announced a structural change in the way personnel are managed at the Department of Vermont Health Access, which is responsible for managing Vermont Health Connect. The operations and development divisions of the department will be separated to create more efficiencies, he said.

The cost of the exchange is 97 percent federally funded. Miller said the Centers for Medicare and Medicaid Services supports the break with CGI and the transition to Optum for completion of Vermont Health Connect.

CMS has a “high interest in not paying for anything twice,” Miller said. The federal agency supported the “handoff for completion,” he said, “we’ll have to see … what will be supported for completion.”

Politicians on the right and the left weighed in after the news broke on Monday. Scott Milne, a Republican candidate for governor, said changing the vendor doesn’t “remedy the leadership and management problem of the Shumlin administration that got us here in the first place.

“This is simply another symptom of Governor Shumlin’s ailing healthcare experiment,” Milne said. “Throwing in the towel with CGI is long overdue. This band-aid fix doesn’t change the fact this administration’s failure has been a loser for Vermont families,” Milne said. “Vermonters deserve accountability before we commit to yet another no-bid contract and tens of millions of dollars trying to fix the same problem all over again.”

Dean Corren, the Progressive candidate for lieutenant governor and an advocate for a single payer health care system, said in a statement that he had been frustrated and disappointed with CGI’s work.

“I have been concerned that CGI’s failures have been undermining Vermonters’ confidence have in moving to our single payer plan,” Corren said. “It is essential to realize that these failures are closely related to the tremendous complexity from the multiple insurance systems involved in our current healthcare non-system, and under our comprehensive reforms, the systems will be much simpler to build and to use. Moving to a universal comprehensive healthcare system is essential to slowing the unsustainable cost increases, and strengthening Vermont’s economy.”

Anne Galloway

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  • This should make for an interesting post-mortem. Complex projects tend to fail for very simple reasons.

  • What happens with the exchange negotiations now that CGI is out and Optum knows they’re the only game in town?

    Well, Larry tells us………”we’re going to get hammer”. Probably the first honest words out of this administration since the passage of health care reform.

    True, the state will be hammered by the taxpayers for this display of negotiating amateurism and that’s only the beginning.

    What do you think happens to price when there is only one seller? Hint: Look for an Optum armored truck and crew at the treasurer’s office emptying the vault any day now. That will probably be a very large truck!

    But not to worry, Larry tells us the federal government is funding 97% of this turkey, so everything is cool…..

    But Larry, we pay for everything the federal government does.

    You can’t make this stuff up, no one would believe it.

    • Jon Corrigan

      Gotta love that ‘free’ gubmint money.

    • More News from the “Magic Kingdom”!

      I guess that Optum, “a subsidiary of United HealthCare”, finally got on board to pick up the ball from CGI and “help out” Mr. Shumlin and his bid for reelection bid. No Bid Contracts, No RFP’s what they refuse to say and the press refuses to report is the real action is “pay for play.” $67M for CGI, $20-$30M for Optum – probably a “little” campaign donation money in there somewhere???

      It is unimaginable that Emperor Shumlin would agree to have a healthcare insurance company ride to the (potential) rescue of his Green Mountain Care fiasco after his constant vilification of the insurance industry from the start of his (and our) march toward single payer, socialized healthcare. Desperation I guess?

      I find my self compelled to mention that we do not have a healthcare crisis in this nation or this state, what we have is a healthcare financing issue that effected about 4-5% of Vermonters – now closer to 7-10% of us thanks to the meddling of Shumlin and his minions.

      It looks like business as usual in the Kingdom of Shumlin (formerly the State of Vermont) – maybe it is time to get the pitchforks out of the barn and visit the State House or more precisely the penthouse of the Pavilion Building next door for a leadership change!

      Then again we could just vote him off the throne!

      H. Brooke Paige, Washington, Vermont

  • Lance Hagen

    This statement from CGI has to be nominated as the biggest ‘spin’ statement of 2014!

    Linda Odorisio, CGI vice president of global communications, said “CGI is proud of the role it played in helping 85 percent of eligible Vermonters enroll in a health plan via Vermont Health Connect. With a majority of our exchange development work complete, we look forward to providing ongoing hosting services in Vermont for one of the country’s most successful health care exchanges.”

    I wonder if she said this with a straight face.

    • victor ialeggio

      CGI “ran” the setup for the federal govenment, massachusetts, kentucky, hawaii, and a number of other states, as well as vermont. you know how well the federal system went. massachusetts & kentuckey are minimally functional, hawaii threw the company out of the state a year ago, as did the province of ontario, which had engaged CGI to set up a diabetes information/treatment exchange, several years back. complaints there centered on an attempt by CGI to use what ontario officials termed “a hopelessly obsolete software.”
      a sterling record all around.

      question: who the heck sold CGI to the federal government in the first place?
      I wonder if it might have had something to do with CGI’s role as a world-class defense, intelligence and security outfit — which is what they claim in their site blurb.

  • Fred Meyer

    Wait a minute… People can enroll in health care plans through the state exchange, right? So what’s the problem again? I don’t get how “it doesn’t work.” Got to Washington or Minnesota if you want to see an exchange that doesn’t work.

  • Lance Hagen

    Did Mark Larsen say anything at the news conference? This is the man that is quoted as saying on Sept. 4, 2013, a month before opening:

    “We sit here today on track so that Vermonters who are in the individual and small group market will be able to compare plans starting October 1 and pick a plan that fits best for themselves and their budget,” Larson told legislators during a phone briefing Wednesday. “We sit here with work left to do, fully acknowledging that, but on track.”

    So here we are, 10 months since launch, without a fully functioning web site. And this man still has his job!

    • Ann Meade

      You clearly have never worked for the state of Vermont. Do really believe that Mr. Larsen has had any say in anything that has gone down? First you have 10 people from the IT department sitting in on EVERY meeting you have, telling you why what you want to do is unrealistic and will never work. The state is not in a position to effectively vet RFPs for projects of this scope. Every project is fairly doomed, an employee from every department that might have a finger in the pie is dragged into endless meetings. Often the contractor ends up really writing the scope of work they are bidding on. It is a mess and incredibly frustrating for all involved. My point is, blaming him is silly. He is just doing what he is told.

      • Jim Christiansen

        Sorry Ann,

        Mr. Larson was the wrong pick for this job. With no project management experience and no major health insurance experience, the Governor set Mr. Larson on a path for failure.

        Mr. Larson’s misstatements of fact, before and during the implementation of VHC, have damaged the credibility of the State as it moves toward the implementation of single payer.

        If Mr. Larson is just doing as he is told, we’ll, he’s performed poorly at that too.

        Mr. Larson needs to go, but Mr. shumlins ego won’t allow him to admit that hiring Mr. Larson was a mistake.

        So, as a result of blind party loyality, Vermonters continue to suffer the consequences of a mandated VHC exchange that has already signaled it won’t be ready for the next open enrollment period.

      • David Dempsey

        You can blame him for misleading Vermonters for almost a year by trying to convince us that everything is going fine.

  • Dave Bellini

    Who wants these clowns to be in charge of their future healthcare? Collectively, they couldn’t muster enough talent to finish a crossword puzzle.

  • Keith Stern

    Only in government can a business get a major contract and not have to post a performance bond which covers cost overruns, completing the project on schedule, and the project being completed properly.
    We do need the government to do more for us because it is much more effective than the private sector.

  • Ellen Oxfeld

    Single payer operates on completely different principles than the exchange. To enroll in the exchange you had to answer dozens of questions, and then, every time your life status or financial status changed, you had to submit more information, and then who knows if it even processed that. But in single payer, you can ENROLL if you are a Vermont resident, end of story. It is closer to Medicare, you reach a certain age, and you qualify, end of story. Did anyone you know ever have trouble enrolling in Medicare?

    Financing our health care system and enrollment in it are separated in single payer, and that is why it is administratively simple. Single payer operates on completely different principles than the Exchange which is a complex mix of some government subsidies and mostly private insurance plans of many different values.

    • Keith Stern

      The VA healthcare is single payer and completely government run. We all know how that has turned out for far too many unfortunate people.
      Privately run programs with government oversight is by far the best answer even if the cost is slightly higher. The cost of needlessly lost lives is much greater than financial costs.

      • John Greenberg

        Keith Stern:
        “We all know how that has turned out for far too many unfortunate people.”

        Somehow, I don’t think you’re alluding to the fact that, according to various studies, the VA provides better healthcare AND better patient satisfaction than private medicine. But those are the facts. Google it.

    • “Did anyone you know ever have trouble enrolling in Medicare? ”
      The answer is no! Our friends, who are over 65, along with my wife and myself all have enrolled in Medicare without any problems, either medical or administrative…you would think this would mean something since Medicare is the closest thing that we have to a “single payer” heath care system.

      However, those against “single payer” will continue equate it to the exchanges for their own political reasons along with those who have a vested interest in insurance based health care.

      • Dave Bellini

        Jerry, I think I understand your point about being careful to not equate “single payer” with the exchange. And I think you’re saying that computer hardware/software problems while frustrating, under the ACA, are not necessarily indicative of “single payer” failure.

        A few points:
        Since none of us know what exactly a Vermont “single payer” will be, people are assuming different models and concepts. So, your “single payer” may not be the same as your neighbor’s “single payer.” My frustration is not knowing what the Governor and legislature intend for most of us.

        Also, you discuss those who are “against single payer.” Agreed that there are some folks who oppose any and all attempts to change anything and reject a government run system no matter what. However I think that totality opposition is a minority of those who are opposed to a portion of the concept. And we have to keep this in the conceptual, as there is no defined plan.
        I think what Vermonters really care about is: what does this mean to me and my family? Will this be better or worse? Or rather, what parts will be better and what parts will be worse?
        Personally, I’m all for a single payer design. I cannot support an unknown however. In a meeting with the Administration, their healthcare folks blurted out: “there will be winners and losers.” Can’t we design a system that’s better for everyone?

  • Jane Anderson

    Listen, there are less than two months until the next insurance open enrollment period in October, it’s not plausible to believe that the State can turn this project around, it’s time to abandon it and move to the Federal Exchange.

    I’m going to go out on a limb and make a bold prediction: The VHC website will not be operating sufficiently by the next open enrollment season.

    Also, I believe that it’s time that the State “parts ways” with Mr. Larson, Lindsey Tucker and their incompetent underlings who continue to direct the development of this project.

    Putting the same folks in charge of managing another large vendor will result in the same outcome.

  • paul lutz

    nothing will happen, nobody will be fired. The dems are in charge. There is no problem. Everything is fine. If you object you are an obstructonist maybe even a racist.

  • Judith McLaughlin

    State, CGI agree to part ways in September.

    Shumlin and the State of Vermont agree to part ways in November.

    Now there is a headline.

    • Vanessa Mills

      (BIG sigh……..) ……Ahhh..If only that were true, Judith……………..

  • Ken McPherson

    Under our current medical system, which rations medical care based on income and wealth, somewhere between 40,000 and 80,000 die prematurely due to lack of access to medical care. As you said, “The cost of needlessly lost lives is much greater than financial costs.”

    The VA health system provides a very high level of care and cure to veterans coming back with incredibly damaged bodies. I have not heard many complaints about VA medical staff lounging around while patients wait for care.

    We have consistently underfunded the VA, especially since the wars in the middle east. If we do not provide sufficient medical staff to the VA medical centers, we cannot expect them to meet unachievable performance standards. (I do not mean to excuse the reporting violations, but on the other hand I do not understand how we can withhold performance bonuses if we refuse to provide the resources necessary to meet performance goals.)

    The delays in delivering appropriate medical care to our veterans is despicable. However, they are probably not much worse – and may well be better – than we see in the non-VA medical system. The quality of the care the veterans receive is topnotch. I suspect that many veterans – particularly those with severe physical and mental problems – will prefer to wait for their VA specialists rather than see a local GP with little or no experience.

  • Bill Olenick

    Fools and their money are soon parted…

    • Bill Olenick

      Excuse me,I should have written,”Fools and OUR money are soon parted…

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