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Live Coverage of House Hearings on Obamacare Glitches

Aired October 24, 2013 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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CAROL COSTELLO, CNN ANCHOR: All right, let's go back to Capitol Hill because we believe testimony is about to begin. This is the committee on energy and commerce. They're holding this hearing to find out what went wrong with those Obamacare exchanges. Testifying, hopefully directly, are all of the tech companies involved in setting up the software for healthcare.gov. The one we're most interested in is Cheryl Campbell. She's the senior vice president of CGI Federal. That company developed the software for healthcare.gov. We're also looking forward to hearing from Andrew Slavitt. He's the group executive vice president for Optum/QSSI, another contractor. We'll also hear from Lynn Spellecy, the corporate counsel for Equifax Workforce Solution. Yes, they played a part in setting up this technology too. And finally, John Lau, who is the program director for a company called Serco. This company also was responsible for these health care exchanges.

So let's dip in live and listen for a big and hear what these contractors are saying.

REP. FRED UPTON (R), CHAIRMAN, HOUSE ENERGY & COMMERCE CMTE.: Experience includes initial implementation and start-up, risk identification and issue resolution using a commercial government - governance system, security and privacy and the design implementation and management of multimillion transaction health care documents and transaction processing systems, including Californians S-Chip and Texas eligibility system for Medicaid CHIP and TANF.

So at this point I will now swear in the witnesses. You are aware that the committee is holding an investigative hearing. And when doing so has had the practice of taking testimony under oath. Do any of you have objection to testifying under oath? See none. The chair then advises you that under the rules of the House, and rules of the committee, you are entitled to be advised by counsel. Do you desire to be advised by counsel during your testimony today? Seeing none.

In that case, if you would please rise and raise your right hand, I will swear you in.

Do you swear that the testimony you are about to give is the truth, the whole truth and nothing but the truth?

Thank you.

You are now under oath and subject to the penalties set forth in Title 18 Section 1001 of the U.S. Code. You are now able to give a five- minute summary of your written statement.

And, Ms. Campbell, we'll start with you. Welcome.

CHERYL CAMPBELL, SR. VICE PRESIDENT, CGI FEDERAL: Chairman Upton, Ranking Member Waxman, members of the committee, thank you for the opportunity to appear today.

My name is Cheryl Campbell, and I'm a senior vice President at CGI Federal. I have responsibility for all of CGI Federal's projects of the Department of Health and Human Services and several other federal agencies.

I'm here today to reinforce CGI Federal's ongoing commitment to the success of the federal exchange on healthcare.gov. Let me state, unequivocally, that CGI Federal is fully committed to its partnership with CMS. Our priority is for Americans to have a positive experience in applying, shopping and enrolling on the federal exchange.

To this end, we dedicate the very best experts to optimize our portion of the federal exchange.

For context, let me first describe our role in the federal exchange. The exchange is comprised of six complex systems and involves 55 contractors, including CGI Federal, five government agencies, 36 states and more than 300 insurers, with more than 4,500 insurance plans, all coming together in healthcare.gov.

CMS competitively awarded CGI Federal its portion of the federal exchange, a software application called the Federally Facilitated Marketplace or FFM.

Specifically the FFM provides functionality for eligibility in enrollment, plan management and financial management. CMS serves as the system's integrator, having ultimate responsibility for end-to-end performance of the federal exchange.

It also is important to understand the complexity of CGI Federal's work on the exchange. The FFM is a sophisticated software application that combines a web portal, a transaction processor, and sophisticated business analytics to simultaneously help Americans determine their eligibility for insurance, apply for subsidies, shop for health plans and enroll in qualified plans.

The technology works in realtime with sophisticated analytics systems developed by other contractors, large scale data repositories hosted in disparate federal agency databases and the health plans for more than 300 insurers. In short, the federal exchange, including the FFM is not a standard consumer website. But rather, a sophisticated integrated technology pat -- platform that for the first time in history, combines the processes of selecting and enrolling in insurance and determining eligibility for government subsidies, all in one place and in realtime.

Since award on September 30th, 2011, CGI Federal has -- CGI Federal has worked diligently to develop the FFM by following a rigorous process that is customary for large I.T. projects. The FFM passed eight required technical reviews before going live on October 1.

While CGI Federal delivered the FFM functionality required, and some consumers were able to enroll on October 1, we acknowledge that issues arising in the federal exchange, made the enrollment process difficult for too many Americans.

Consequently, CGI Federal's focus shifted immediately to solving consumer access and navigation processes on the exchange. The (ph) first set of issues on the exchange concerned another contractors, Enterprise Identity Management, or EIDM function.

The EIDM allows consumers to create secure accounts and serves as the front door to the federal exchange. Consumers must pass through this front door in order to enter the FFM application.

Unfortunately, the EIDM created a bottleneck, preventing the vast majority of consumers from accessing the FFM. Since then CMS, CGI Federal and other contractors have worked closely together to troubleshoot and solve this front door problem.

CAMPBELL: As more consumers are gaining access through the FFM and enrolling in qualified plans, the increased number of transactions caused performance problems such as, slow response times and data assurance issues.

CGI Federal is addressing these problems through tuning, optimization, and application improvements.

Over the past two weeks, the federal exchange has steadily improved. We continue to dedicate the resources necessary to shorten wait and transaction times, and improve data quality.

We have confidence in our ability to deliver successfully.

Why?

Because The company I represent here today has successfully delivered some of the most complex I.T.implementations for the U.S. government including federalreporting.gov. We have partnered with CMS on transformative projects like medicare.gov, which has enabled or the 50 million beneficiaries to compare health plans annually. We are widely recognized by independent parties for our expertise in I.T.systems and software and have CMMI level 5 credentials that demonstrate our commitment to rigorous software development processes. And, as part as the fifth largest independent I.T. and business process services company in the world, we leverage deep resources and expertise of a global workforce.

I will end this testimony where I began, by reinforcing CGI Federal's unwavering commitment to working collaboratively with CMS to improve the consumer experience.

Thank you. UPTON: Thank you.

Mr. Slavitt?

ANDY SLAVITT, EXECUTIVE VP, OPTUM: Chairman Upton, Ranking Member Waxman, and members of the committee, good morning.

My name is Andy Slavitt, and I am group executive vice president at Optum, Business Unit of United Health Group. Optum owns QSSI, one of the contractors working on the online health care marketplaces.

Let me begin by saying that, we understand the frustration many people have felt since healthcare.gov was launched. We have been and remain accountable for the performance of our tools and our product.

I'll start by discussing our work on the data services hub, a large and complex project that was the subject of much interest in QSSI's work for the marketplace prior to the launch. Simply put, the data services hub is a pipeline that transfers data, routing queries and responses between a given marketplace and various trusted data sources.

Specifically, a consumer interested in purchasing health insurance goes to the marketplace's web portal to fill out enrollment forms and select a plan. The consumer provides the marketplace with information such as citizenship, which must be verified. The data service hub directs queries from the marketplace to various sources such as government databases that can verify that information and send the information back to the marketplace.

As a technology pipeline, the data services hub does not determine the accuracy of the information it transports, nor is the store data.

The data services hub has performed well since the marketplace has launched. On October 1, the data services hub successfully processed more than 178,000 transactions and it has processed millions more since. When occasional discreet bugs in the data services hub were identified, we promptly corrected them.

In addition to the data services hub, QSSI also developed the EIDM, a registration and access management tools used as one part of the federal marketplace's registration system. The EIDM tool helps the marketplace create user accounts and is being used successfully currently in at least two other CMS applications. It's relevant to note that while the EIDM is important, it is only one piece of the federal marketplace's registration system.

Registration components developed by other vendors handle other critical functions such as user interface, confirmation e-mails to users, the link that users click on to activate their accounts, and the web page users land on.

All of these tools must work together seamlessly to ensure smooth registration. After the launch, healthcare.gov was inundated by many more consumers than anticipated. Many of the critical components developed by these multiple vendors were overwhelmed, including the virtual data center environment, the software, the database system and hardware and our EIDM tool.

Though it appears one of the reasons for the high concurrent volume of the registration system was the late decision requiring consumers to register for an account before they could browse for insurance products. This may have driven higher simultaneous usage of the registration system that would not have otherwise occurred if consumers could window shop anonymously.

In the days after the launch, QSSI worked around the clock to enhance the EIDM tool to meet this unexpected demand, and as I understand it this has largely succeed. By October 8, even at high levels of registration, the EIDM was processing those volumes at error rates close to zero. The EIDM tools continues to keep place with demand and at CMS' request, we are working with other vendors to plan for higher levels of peak activity.

Finally, QSSI was one of several testers used to test the functionality of the federal marketplace. In our testing role, we identified errors in code that was provided to us by others. In this function, we reported back the results to CMS and relevant contractor who in turn was responsible for fixing coding errors or making any necessary changes.

To conclude, the data services hub has performed well. And after initial scalability challenges, the EIDM is now keeping up with demand. We are committed to helping resolve any new challenges that may arise in any way we can. Thank you for the opportunity to discuss QSSI's work. I am happy to answer questions you have.

UPTON: Thank you.

Ms. Spellecy?

LYNN SPELLECY, SENIOR DIR./CORPORATE COUNSEL, EQUIFAX: Good morning, Chairman Upton, Ranking Member Waxman and distinguished members of the committee.

My name is Lynn Spellecy and I serve as senior director and corporate counsel for Equifax Workforce Solutions. In that role, I am the primary attorney responsible for day to day legal operations of that business unit and I provide guidance, advice and legal support. I appreciate the opportunity today to provide an update related to the income verification services that Equifax is providing CMS to assist them in their benefit eligibility determination requirement under the Affordable Care Act.

The Equifax Workforce Solutions income verification solution is working as designed. Since the exchanges first went live on October 1st, 2013, we have not experienced any problems or interruptions in the processing of data to CMS. We have received and responded to verification requests regarding individual applicants from the federally facilitated marketplace as well as from state based agencies.

Equifax Workforce Solutions tested our verification solution before the October 1st, 2013 open enrollment start date to ensure that we could transmit data between our servers and the federal data hub. We performed end to end testing with the federal hub and considerable internal stress and volume testing to guarantee that we would be prepared for current and future applicant volumes.

Now that the federally facilitated marketplace is open we are monitoring the flow of verification requests from the hub to our services and back. Equifax Workforce Solution's role in the federally facilitated marketplace is limited. Equifax Workforce Solutions receives an income verification request only after an applicant gains successfully gains access to the healthcare.gov or a state based marketplace website, creates a username and establishes a security authentication profile and then enters an online application process. Equifax does not say a role in any of these steps, nor does Workforce Solutions play a role in identify proofing and authentication. We are neither involved in nor do we have visibility into the eligibility decision process or downstream display and processing of benefit elections.

Although the majority of the verification requests have come through the federally facilitated marketplace, Equifax Workforce Solutions is also verifying income for several state based market places and state Medicaid agencies.

The continuing appropriations act for 2014 included new requirements for the Department of Health and Human Services to ensure that the federally facilitated and state based marketplaces verify that individuals applying for coverage and seeking premium tax credits are cost sharing reductions are in fact eligible for these subsidies.

Equifax Workforce Solutions looks forward to sharing our expertise in income verification services with CMS at HHS as they develop guidance regarding verification solutions for the federal and state exchanges.

SPELLECY: Since the October 1st, 2013 date, Equifax Workforce Solutions have exceeded the operating specifications in its contract with CMS to provide income verification services for those seeking financial assistance under the Affordable Care Act.

The extensive experience we've gained from providing income verifications to state and other federal agencies for their eligibility reviews for government subsidies has prepared Equifax Workforce Solutions to successfully serve CMS in this new capacity.

We will continue to monitor and test our interface with the CMS data hub and various state agencies to ensure maximum advocacy.

Thank you for the opportunity to testify and I welcome your questions.

UPTON: Mr. Lau?

JOHN LAU, PROGRAM DIR., SERCO: Good morning, Mr. Chairman, Congressman Waxman, other distinguished members of the panel...

UPTON: Yeah, would you -- would you just make sure your mike is set there?

LAU: Can you hear me now?

UPTON: Now we can.

LAU: OK. Good morning, again, Mr. Chairman, Congressman Waxman, other distinguished members of the committee.

My name is John Lau and I represent Serco and I am the program director for our CMS contractor in connection with the ACA. Thank you for the opportunity to again appear and discuss Serco's current status and performance in this program.

For the next several minutes, what I'd like to do is provide a quick review of Serco's role in the program and then the current status of our work.

Serco's contract is to provide eligibility support services in support of the paper application processing as well as error and issue resolution on applications regardless of the mode in which the consumer submitted them.

It's important, I think, to clarify that we have no role in the development of the website. We have no role in the determination of eligibility and we have no role in health plan selection.

I think there have been some confusion about that -- I'd like to make sure that that's clear.

Our primary role, in the early days of this implementation, is to key enter paper applications into the eligibility system. As time goes on, more of our work will entail inconsistency resolution in order to clear previously submitted applications for the eligibility determination process.

Inconsistency resolution entails data verification and validation of the self-attested data from applicants. These are problems identified through the use of the data hub in the main system and then communicated to us.

To date, Serco has successfully opened two of its four processing centers -- those in Kentucky and Arkansas. A third will be opening next week in Missouri and in about four or five weeks, the final site in Oklahoma.

We've had no trouble recruiting and hiring competent staff at any of our areas and have received a number of compliments from local officials and community groups about the professionalism of our recruiting efforts and outstanding ways we've on-boarded and trained our people.

We've instilled a sense of pride in what they're doing and our staff is highly motivated and represent an eager workforce. Since the launch of the program on October the 1st, we've built upon our starting capacity with both staff numbers and processing efficiency. The volume of paper documents received since program launch has been steadily increasing, and even in a short period, clearly is trending upward.

This buildup has given us the opportunity to make adjustments and improve our processes as the nature of the inbound documents and the work load has become clearer.

To date, we've received about 18,000 documents. About half of those are consumer applications and we've succeeded in key entering about half of those.

The remaining half are generally applications that are missing important data and those cannot be entered directly until those problems are resolved. We expect to be able to complete processing and entering those applications in the near future.

Our challenges have (ph) include coping with the performance of the portal, as that is our means of entering data just as it is for the consumer. With the relatively low volumes of applications we've received thus far, it's not presented a challenge.

As I testified at September 10th, Serco was ready to process on 10-1 and we are processing today. And I very much look forward to your questions. Thank you. UPTON: Well, thank each and every one of you. At this point, we'll move to questions from members and alternate between Republicans and Democrats.

(END LIVE FEED)

COSTELLO: All right we've got to take a break. We'll be back with much more. And we're going to talk about what just happened in this congressional hearing and the problems with the Obama care exchanges.

We'll be right back.

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COSTELLO: All right. We've been monitoring this congressional hearing on -- on the rollout of these Obamacare exchanges. And the tech experts are testifying right now before a House committee.

And so far we've heard CGI, one of the companies responsible for setting up healthcare.gov. CGI says its system passed eight technical reviews and then, holy cow, there were problems. On QSSI testified, you know, there was a late add to the system that caused all the problems. We didn't have anything to do with it. Equifax testified that it had a very limited role in all of this, so it should not be to blame and Serco said we have absolutely no role in this, and then explained the company's primary role, which would be the processing centers.

So ok -- so now they're facing questions from lawmakers and the first question from Congressman Upton, was it ever an option to delay things? And so far the answer has been no.

Let's bring our technical expert, Laurie Segall. Laurie you've been listening to this too. What is your impression?

LAURIE SEGALL, CNN MONEY TECHNOLOGY CORRESPONDENT: My impression first of all is that it sounds like they were a lot of cooks in the kitchen, so many that in fact that you could just point your finger anywhere you want to say what went wrong. I mean the interesting part for me you hear from Cheryl Campbell and she says these front-door problems that weren't their fault ended up creating backdoor problems that maybe potentially caused overwhelming problems for -- for her contractor.

Now you know she mentioned EIDMI and that's what we talked about earlier which is this account registration process. And she said because of that, they had issues because people couldn't register and she said that this really didn't have anything to do with what they were in charge of.

So then you know we heard from Andrew Slavitt who said that, you know, he spoke a little bit about the complexity of the site and about what they called the data hub.

So you know essentially, when you go in and you're putting your information in there and they ping the IRS and the IRS comes back with your information. That's all the data hub. And that was he says working very well. And then he got into what a lot of folks seem to be talking about, which is that --