Unexpectedly tasked with operating an insurance exchange in 34 states, the Centers for Medicare & Medicaid Services is mostly on track to have the federal data services hub running in October, according to the Government Accountability Office.
The GAO scrutinized CMS's work building the federally-facilitated exchange, and found it mostly on deadline, with the exception of a few consumer-assistance, IT and plan management tasks -- and with a few factors that "suggest a potential for implementation challenges going forward," namely the "still-unknown and evolving scope of the exchange activities CMS will be required to perform in each state."
The federal data services hub will be supporting most exchange activities in states defaulting to the federal marketplace, as well as some of the Medicaid and premium-assistance functions in the 17 state-based exchanges. At a cost so far of $394 million, the data hub is largely now in the testing and pre-testing phases and CMS also has contingency plans for possible IT and state policy scenarios.
"Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined," the GAO said in its report. In part, that's because CMS is managing the data hub, but other federal agencies like the Internal Revenue Service and the Social Security Administration will have databases linked in as well.
By the end of July, CMS told GAO it will have completed development and testing of eligibility and enrollment functions, which will involve an applicant being screened through several databases, including with the Department of Homeland Security to verify citizenship, and with Medicaid, the Department of Defense and the Peace Corps to check eligibility for other federal health programs.
CMS already started some data hub testing in October 2012, which was only about a year after a key $55 million contract was awarded. The agency has performed internal software and integration testing, as well as secured communication testing with the IRS and other federal and state agencies. CMS and those state agencies have also started setting up business service definitions, and computer-matching and data use agreements.
As of April, though, the GAO found, CMS still had a few tasks to complete before it could start testing the calculation of advance premium assistance subsidies (a process that will involve the IRS checking an applicant's latest tax return) and verification of citizenship.
Usability will be one large factor in the success of the HIXs, because for consumers shopping online, the verification and calculation functions are supposed to happen largely in real time, the way shopping on Amazon or Travelocity works.
For insurers selling qualified health plans, CMS's IT system is becoming operational mostly on schedule, the GAO found, although health plan certification and website display of health plan information still had to be completed.
CMS's implementation of the federal HIX and much else of the ACA is also happening amid a federal budget sequester, and future work on the HIX may be dependent on funds allocated by Congress.
From fiscal years 2010 to 2013, CMS spent $494 million on the federal exchange and data hub, the GAO found, and for fiscal year 2014, the agency estimates it will need about $2 billion. President Obama's 2014 budget requests $1.5 billion for CMS's exchange program management account, and the remainder is expected to come from insurer user fees.