Watchdog: Accountability

Issues dog 'other contractor' as House panel convenes first hearing on healthcare.gov's many troubles

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Watchdog,Richard Pollock,Watchdog Blog,Obamacare,Health and Human Services,Health Care,Kathleen Sebelius,Accountability,Healthcare.gov

Executives from QSSI, the information technology firm that designed the data hub behind healthcare.gov and tested the site before its launch, won't testify at the first congressional hearing on the many problems with the troubled web portal.

Instead of getting testimony from QSSI executives Kawaljit Singh, Tony Singh and Bikram Singh Bakshi, the House Energy and Commerce Committee will hear from Andy Slavitt, executive vice president of Optum, a subsidiary of UnitedHealth Group and the parent of health insurer United Healthcare. Optum owns QSSI.

The Singhs hail from India and founded the Columbia, Md.-based QSSI in 1997. Tony Singh is QSSI’s chairman, Kawaljit Singh is president and Bikram Singh Bakshi is CEO.

A former contract employee of the Department of Health and Human Services told the Washington Examiner that the trio of senior QSSI executives had extensive hands-on experience with the Obamacare website and its data hub.

Health and Human Services Secretary Kathleen Sebelius will testify before the panel Oct. 30.

Since its Oct. 1 launch, healthcare.gov has crashed, failed to save information, sent erroneous information to insurers, and prevented many users from completing their insurance application.

As a result, consumers have been unable to log on or learn about basic health insurance premiums or coverage options, benefits or tax subsidies.

Slavitt’s appearance likely will draw questions from committee members regarding Optum's controversial acquisition of QSSI in September 2012 and its recruitment of Steve Larsen, a former senior Obamacare program executive under Sebelius at HHS. Optum is UnitedHealth Group’s IT company.

"Larsen left the Center for Consumer Information and Insurance Oversight, the office tasked with crafting rules for the national [Obamacare] exchange, in July to take a job with Optum. It is not clear how long Optum was in consultation with QSSI prior to purchasing it," according to a Nov. 3, 2012, news report by The Hill.

The first controversy surrounds UnitedHeath Group's purchase of the small Maryland IT firm. Wall Street analysts noted that UnitedHealth Group did not notify the Securities and Exchange Commission in its 8-K form of the QSSI acquisition as a material investment.

The Larsen element arose because he initially said he left the government last year to spend more time with his family. A few weeks later, Optum announced Larsen was joining the company as its executive vice president.

It is unclear what Larsen's role was, if any, in approving the QSSI contract. Federal records show Larsen’s tenure at the federal Center for Consumer Information and Insurance Oversight coincided with QSSI winning the IT contract award valued at $144.6 million in September 2011.

When another IT company challenged the contract, the award was delayed until January 2012 while Larsen was still on the federal payroll.

Larsen was director at CCIIO in May 2011 when the agency chose QSSI for a coveted “Indefinite Delivery/Indefinite Quantity” classification.

The ID/IG classification enabled QSSI to be fast-tracked by federal officials for the award of contracts without entering the regular competitive procurement process.

Then in September 2012, after Larsen joined Optum, the company formally announced the QSSI acquisition.

The acquisition raised conflict of interest worries. The Hill reported that “one critic familiar with business rivalries of the insurance industry compared [Optum's] purchase of QSSI to the New York Yankees hiring the American League’s umpires.”

In addition to building the data hub for healthcare.gov and testing the site, QSSI had other HHS contracts that allowed it to set system requirements for how health plans offered in the Obamacare exchange would be certified and decertified.

In a Dec. 10, 2012, letter, Rep. Fred Upton of Michigan and Sen. Chuck Grassley of Iowa, both Republicans, raised questions about the QSSI acquisition to UnitedHealth Group President Stephen J. Hemsley.

Upton is chairman of the energy and commerce panel in the House of Representatives, while Grassley is the ranking minority member of the Senate Finance Committee.

The two lawmakers told Hemsley that the strategic position of QSSI in determining health care requirements “raises serious questions about the conflicts of interest that may exist as a result of the acquisition of QSSI by Optum.”

There also are questions about QSSI’s contract performance. In June of this year, the HHS inspector general singled out QSSI in a scathing report about the company’s lax computer security and its failures to comply with federal guidelines.

The IG faulted QSSI's work regarding the security of millions of Medicare records.

Federal contracting documents list QSSI as a certified “disadvantaged business enterprise” and as a minority owned business.

The company operates branches in Columbia and Baltimore, Md.; Herndon, Va.; Atlanta; Columbia, S.C.; and Hyderabad, India.

An Optum spokesman did not respond to a reporter's questions about why the Singhs are not testifying at the House hearing.

Federal officials did not respond to a reporter's request for comment.

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