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Report-Double Jeopardy ACA "aka Obamacare" by Barbara Espinosa
Via Free Beacon The HHS released documents relating to its new contract to maintain the federal health exchange on Wednesday, justifying its reasons to expedite the procurement process because of an “urgent need” for the website to work.
The documents instruct the new contractor, Accenture Federal Services, to build “core functionality” of the website, including software that tracks enrollment and calculates subsidies to pay insurance companies. Centers for Medicare and Medicaid Services (CMS) officials have admitted that nearly half of the site has yet to be built.
CMS officials said the majority of work remains to be done on back end systems, including the financial management module, which will automate and smooth intersections with third parties including health plans.
HHS warned that if the site is not completed by March 2014, it puts the “entire health insurance industry at risk.”
“CMS must immediately award a contract for these services under the auspices of the aforementioned exception to full and open competition because there is limited time to build this functionality and failure to deliver the functionality above by mid-March 2014 will result in financial harm to the Government,” the “Justification for Other than Full and Open Competition” statement accompanying the contract revealed.
“If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers,” it said.
The website currently has no “Financial Management platform” to account for enrollments, tax credits, and payments to insurance plans, according to the document. HHS said without such a system the “entire healthcare reform program is jeopardized.”
The lack of an accounting platform will also cause “inaccurate issuance of payments to health plans which could seriously put [insurance companies] at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers.”
Of great concern is Healthcare.gov’s capability to manage the risk corridors of the health care law, which include payments to offset the potential losses of health insurance companies participating in the exchange.
Reinsurance payments will redistribute $10 billion in 2014 to insurance companies that take on more expensive patients, because the law does not allow individuals to be denied coverage on the basis of preexisting conditions.
The risk adjustment program also “provides payments to health insurance issuers that disproportionately attract higher-risk populations” as a result of the law.
