News Feature | October 9, 2015

GAO: No Fully-Functional State Exchange IT Systems

Christine Kern

By Christine Kern, contributing writer

Online Doctor Review Value

Report recommends improvements in CMS oversight of state marketplace IT projects.

As of February 2015, none of the 14 states with health insurance marketplaces had completed their IT system functions according to a Government Accountability Office report. The auditors of the report, State Health Insurance Marketplaces: CMS Should Improve Oversight of State Information Technology Projects, state much work remains to be done across the board in terms of bringing their IT systems up to speed.

They also underscored these IT shortcomings follow states’ total spending of about $1.45 billion in federal marketplace grant funding on IT, the bulk of which was spent by state-based marketplaces. The total amount spent on each marketplace’s IT-related projects was unclearly defined, however, because of limited tracking. Furthermore CMS did not adequately define and communicate its oversight roles to the states meaning some states experienced difficulties obtaining timely guidance from CMS.

The report rated each of the 14 state-run marketplaces in four categories finding none were "fully operational" in all categories. Vermont’s exchange scored the highest, as “fully operational” in three of the four categories. Connecticut’s exchange was rated as “partially operational” in all four categories of eligibility and enrollment; financial management; hub services; and IRS reporting file submissions.

According to the Connecticut Mirror, the report is the result of a request by members of Congress to review state and federal actions related to IT projects for insurance exchanges in the wake of glitches experienced during the first open enrollment period, which began in 2013.

In its findings, the report revealed CMS had conducted operational readiness reviews of the state-run marketplaces prior to the initial open enrollment period, but “conditionally passed all of those states without fully ensuring that they had conducted all required system testing and demonstrated that their systems were ready for production.”

The GAO has offered three recommendations for improving CMS oversight of state marketplace IT projects: clearly communicate its roles in overseeing the state marketplaces through a comprehensive communication management plan, ensure all appropriate CMS executives involved in state marketplace IT projects approve funding decisions for the projects, and ensure states have sufficiently tested marketplace system functions before releasing them.