ObamaCare’s Financial Management Platform Is Still Unbuilt

What difference does that make? A lot, according to the CMS explanation of why it just awarded a $91 million, one-year, no-bid contract to Accenture to complete the job:

…[W]ithout a Financial Management platform that accounts for enrollments and associated program costs (i.e. Advance Premium Tax Credits (APTC), Cost Sharing Reductions (CSR), payments to insurance plans, etc.), that integrates with the existing CMS Accounting platform (HIGLAS), the entire healthcare reform program is jeopardized by significantly increasing the following risks: (Emphasis mine)

• Creating erroneous estimates of budgeted and projected payments associated with operating the FFM;
• Inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers;
• Inaccurate forecasting of Risk Adjustment, Reinsurance, and Risk Corridor; potentially putting the entire health insurance industry at risk; and
• Failing to support the end of the year reconciliation with IRS; leading to greater program costs for workarounds.

Apparently, the job will not be easy, according to this report:

In terms of complexity, the financial system is a much taller order than the initial HealthCare.gov portal, says Stephen Parente, a health care policy and finance professor at the University of Minnesota, who has been critical of the administration’s overall health care policy.

“Can it be built? Yes. But this is an IT infrastructure project that has no parallel both in terms of money and integration,” he said. “It’s a big deal if Accenture cannot get their act together to move the money.”

…It’s not clear precisely what workarounds are in place to route funds to participating carriers. Parente speculated that some carriers might be able to cover the initial costs in part with additional revenue coming from the uptick in Medicaid enrollment. However, that would apply only to carriers that offer Medicaid plans in states that have opted into the expansion of that program.

“Their anxiety is high,” Parente said about the insurance carriers. “They’re about at the outer limit of how far they can run on spec,” he said.

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