The vendor charged with processing paper applications for health insurance under the 2010 health care law got a big addition to its contract just days before the online exchanges opened to the public. While there was no advance indication from officials that the Healthcare.gov launch would be riddled with IT failures, the government apparently ramped up its ability to process paper applications just days before open enrollment kicked off.
On Sept. 26, Reston, Va.-based Serco received an $87 million amendment to its $114 million contract with the Centers for Medicare and Medicaid Services. It’s not clear what is in the amendment, but Serco’s initial contract, awarded in late June, called for the company to be able to process 6.2 million paper applications during the open enrollment period beginning Oct. 1, 2013 and ending March 31, 2014, according to government contracting database Govini.
Serco program director John Lau told a House panel in a Sept. 10 hearing that the company was ready to execute on its contract and was in the process of hiring 2,000 new workers to handle the flood of paper applications. He noted in that testimony that an amendment was in the works but did not indicate what it was for. Inquiries to Serco were not answered by press time.
CMS did not directly address why Serco got more money at the last minute.
“Serco is a highly-skilled company that has a proven track record in providing cost-effective services to numerous other federal agencies,” the agency said in an emailed statement to FCW. “The company has provided exceptional records management and processing support to other federal agencies, similar to work they will do for the Marketplace. The selection met all of the requirements for a full and open competition, and the timing enables us to be ready for Marketplace open enrollment starting on October 1.”
The scope of the work was based on estimates from the Congressional Budget Office that the plans would attract an estimated 20 million applicants, with paper applications constituting about 30 percent of these. Despite the estimate, the CBO’s expectation is that 7 million people will get coverage under the law by the end of the initial open-enrollment period.
The paper versions of applications are used to determine eligibility. By contrast, the online system accessible via Healthcare.gov is designed to allow applicants to create an account, get an instant determination of their eligibility, and shop for insurance plans. As has been widely reported, the system is not working as advertised.
The state-based exchanges are faring rather better. According to data compiled by the Advisory Board, as of Oct. 16 about 50,000 people had enrolled in health coverage in the nine states with their own exchanges that have released numbers. According to official spokespersons in Washington and Minnesota, two of the more successful states so far, the federal data hub which checks eligibility has not proved a drag on the process.
