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POLITICS: PennAve

Emails show CMS knew small-business exchange would not be ready

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Politics,White House,Obamacare,Health and Human Services,Health Care,PennAve,Susan Crabtree,Kathleen Sebelius,Technology,Fred Upton

This story was originally posted at 12:22 p.m.

The Obama administration knew as early as August that the small-business portal on healthcare.gov would not be ready by the Oct. 1 launch, but delayed admitting those problems until Nov. 27, according to documents released by House Republicans on Friday.

In one colorful email exchange in mid-August, Henry Chao, the administration official charged with the development of the online insurance marketplaces, expressed frustration with delays from the private contractor working on the website.

When the contractor suggested a new date of Nov. 15 for the launch of the small-business portal of the website, Chao bluntly asked: “Can we sign this with blood?”

That email exchange was one of several Republicans on the House Energy and Commerce Committee released Friday.

The emails reveal deep concerns among officials at the Centers for Medicare and Medicaid Services as they worked with outside contractor CGI Federal, the IT firm responsible for the botched launch of healthcare.gov, to finalize a launch date for the online small-business enrollment exchange.

They also show that the Obama administration agreed on Aug. 13 to delay the small businesses exchange until Nov. 15, but did not first announce the setback until Sept. 26, less than a week before employers were expecting to begin shopping online for health coverage for their employees.

Last week, on the day before Thanksgiving, when many Americans were traveling or focused on the holiday, the administration announced a one-year delay of the small-business enrollment feature.

“As the paper trail broadens, we see more and more evidence that the administration was fully aware its signature health care law was not ready for prime time,” Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, said in a statement. “The documents we are now reviewing tell a much, much different story than what officials testified to Congress.”

“While it's not clear any 'blood oath' was taken,” the president's top lieutenants, Upton said, repeatedly “looked us in the eye, insisting they were 'on track' when they knew looming deadlines would be impossible to meet. These are not characteristics of the 'most transparent administration in history.' ”

Health and Human Services Secretary Kathleen Sebelius is set to testify before Upton's panel Tuesday morning. She will face harsh questions about the timing of the latest Obamacare delay, as well as the persistent myriad “back-end” healthcare.gov website problems that are raising serious questions about whether those who signed up for coverage will actually have it come Jan. 1.

Although administration officials have stabilized the healthcare.gov website and enrollment numbers have surged, serious new concerns have cropped up about the website's back-end problems — a breakdown in connections between the website and insurers is losing a significant, but unknown, number of online enrollment applications. CMS has set up a new team of experts to fix the connection issue.

The back-end problems are separate but related to the small business delay, showing that the healthcare.gov website is still a work in progress and CGI is still struggling to finish all the components of its contract.

The email exchanges the Energy and Commerce panel released demonstrate rising concerns among CMS officials in late July that the online enrollment process for small businesses, known as SHOP, would not be up and running until weeks after the Oct. 1 website launch.

On July 26, Jo-Ann Webber at the CMS Office of Information Services emailed colleagues that she had “escalated your concerns regarding the SHOP Employee application not being completed until 10/15/13, and the concern that the Employer application development will not be completed until 8/30/13.”

One aspect of the portal, the employee application development piece, would not be completed until Oct. 15, Webber said.

Dean Mohs, a small business health insurance specialist at the CMS Center for Consumer Information and Insurance Oversight, immediately responded, “I am not recommending a delay of the employer application.”

He went on to note that Chiquita Brooks-Lasure, the deputy center and policy director for the CMS Center for Consumer Information and Insurance Oversight, had testified to the Senate Small Business Committee the day before and committed “on more than one occasion” that the SHOP section of the website “will go live on 10-1-13.”

Monique Outerbridge, director of CMS information services, weighed in on the same email string, saying she was growing incredibly worried about the delays and believed that they would need to alert CMS Administrator Marilyn Tavenner and Sebelius.

“Guys, this is absolutely urgent and I need an answer on this today,” she emailed on Aug. 6. “If this is late we have to public [sic] announce we are late with a deliverable which means [CMS Administrator] Marilyn Tavenner and the secretary will have to announce.”

In a separate email thread a week later, Mark Calem, vice president of consulting for CGI, emailed Chao about a “planned rollout schedule for SHOP” that said initial webinars would be conducted Oct. 15, online training materials would be available Nov. 1 and the small business portal would go live Nov. 15.

Chao immediately asked, “Can we sign this with blood?”

Later, Rich Martin, vice president of consulting for CGI replied, “All light heartedness aside, we examined capacity and schedule and agree to these dates.”

As of late November, as CMS worked with outside experts to meet a Dec. 1 deadline to make the website more functional, the small-business portal had yet to go live.

On Nov. 27, Health and Human Services announced that it would be delayed for one year.

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