Massachusetts' Botched Obamacare Exchange Build May Have Been Illegal As Well As Incompetent

Report finds that state misled federal officials about progress on the $135 million project.


credit: Foter / CC BY-SA

When Obamacare's health insurance exchanges officially launched in October, 2013, one of the worst performers was, somewhat ironically, located in the one state that already had a functioning health insurance exchange: Massachusetts. The state had been running its own online insurance portal for years as part of RomneyCare, the coverage expansion that would become the model for Obamacare. But the exchange the state already had in place, while functional, didn't have all of the features required by Obamacare. A total overhaul was required.

But when Obamacare's exchanges went live, the upgrade turned out to be a downgrade. Despite years of administrative planning and development, funded largely by $135 million federal grants, the Massachusetts Health Connector basically didn't work at all during the first open enrollment period. Repair efforts stalled, and eventually the entire thing was scrapped so that the state could start all over again on yet another new exchange. The original tech contractor, CGI (which also worked on the botched federal exchange) was fired from the project, and a new team was brought in to start over.

It's been clear for a while now that the project was massively mismanaged, but it now looks increasingly as if development of the exchange may have involved illegality as well as incompetence.

Not only did the officials in charge of the exchange botch the job, they are now accused of having intentionally misrepresented their progress (or lack thereof) to federal officials. A stinging report released yesterday by the Pioneer Institute, based on official contemporaneous audit reports by an outside consultant and unnamed "whistleblowers" who were interviewed by the report's author, Josh Archambault, alleges that state officials lied to federal overseers about progress on the project and cheated on a key federal connectivity test, employing what was essentially a dummy system in order to cover for work that had not yet been completed.

In March of 2013, the Commonwealth Connector Authority overseeing work on the exchange, under then-Gov. Deval Patrick's administration, was required to demonstrate that it could connect with the Federal Services Data Hub, a kind of central routing system for information required to process insurance under the law. The state was supposed to use its own system, the one they were building with federal grants, for the test.

But according to the Pioneer Institute report, the state couldn't use its own system because it didn't exist; many of the required technical components were "either absent or incomplete."

Instead, state officials, in coordination with the contractor, used what the report describes as "free open source software" to communicate with the federal data hub and pass the test, thereby "concealing the fact that there was no content on the state website behind the URLs." According to the unnamed whistleblowers, an interface manager working for the state who objected that the plan was deceptive was removed from duty before the test occurred.

Two months later, in May, 2013—roughly five months before the exchange was set to open—the state made a final design presentation to federal health officials at the Centers for Medicare and Medicaid Services. The claims made at the time were, at a minimum, highly suspect.

Connector Authority officials said that high-level design requirements were 99 percent complete, but as the Pioneer Institute report notes, a monthly audit report from consulting firm BerryDunn, which was following the exchange's progress, one month prior had warned that there was "little visibility into [the] desogn and development of key interfaces" and that the consultants had "little confidence" that the state and its tech contractor were effectively working toward building those interfaces in a timely manner. Nor was there a configuration management plan or a coherent design for the site's architecture.

During the same presentation, the state also claimed that it was 60 percent finished with the "design and build" of the system, despite the fact that the the bulk of the website's code was behind schedule and final delivery to the state had not happened yet. Some of the code that supposedly had been delivered already, meanwhile, was impossible for the outside auditors to verify because it hadn't been put on the main servers for testing.

The late delivery of the website code is part of what makes the state's claim that overall testing was 46 percent finished difficult to believe. To the extent that testing occurred at all on the site, it was minimal and late, with a high failure rate. One system test in late September (less than a month before launch) revealed a 90 percent failure rate. The bulk of the project code, however, was never once put through user acceptance testing. When it went live, in other words, no one had ever tried to make it work. So it was hardly a surprise when it didn't.

Archambault's report strongly suggests that the state's intentional deceptions may have been in violation of multiple laws. At minimum, it seems to have been a massive fraud. Massachusetts had not only traded its existing, slow-but-functional system for an expensive, federally funded disaster that didn't work at all, the state had lied about it—not only to federal officials, but also the public: On the day that the new exchange was set to go online, the state released a glossy progress report touting the advances the new exchange would bring, and, in the months before launch, state officials had bragged about the new exchange even as it became increasingly troubled behind the scenes.

Will anyone pay a price for the deceptions, and the blatant waste of taxpayer funds? Last Friday, the Associated Press reported that the state government, now headed by Republican Gov. Charlie Baker, recently received a federal subpoena regarding the development of the Health Connector. There are 135 million good reasons to cheer on this investigation.

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  1. Other than the healthcare consumer and 2010 and 2014 congressional Democrats, is there any way anyone actually gets punished for Obamacare failures/illegalities?

    1. The fraud is actually just a tax, and therefore entirely constitutional.

    2. You and I both know that the Republican saboteurs and hackers who took down the exchanges will be investigated and punished.

  2. Government fraud and incompetence isn’t like regular fraud and incompetence.

    1. Honestly, what are we getting so upset about? Everyone knows that the best way to increase employment is to tear down a perfectly good bridge and have the government give you money to build a new one in its place. If the second one is a utter piece of shit, even better! Just keep building! Full employment forever!

    2. That’s right. They are far more baroque.

      1. And out of monet.

        1. I got that impression also.

    3. I think I know where the $135 million went. Just look at that cupola! 18K gold, so that the proles are suitably in awe of their leaders.

  3. America seems to be sinking under the full weight of its derpy exchanges.

    1. Turd will be along in a minute to tell us it really doesn’t suck as much as, oh, a major earthquake.

      1. More wingnuttery.

  4. Two typos: Masachusetts and desogn.

    1. DESOGN!!

      1. they were a great progressive metal band before they sold out

    2. All Hail the Mighty Desogn!!!

  5. It’s not illegal when the government does it. Doesn’t everyone already know that?

    1. It’s not illegal when the a Democratic government does it. Doesn’t everyone already know that?


  6. “Botched Obamacare Exchange”

    I thought that was Oregon. Or California. Massawhatnow?

  7. How much money from grants do we need to build functioning alt-text?

    (Btw, I have been hearing ads for the Health Connector on and off on the radio for the past couple of years)

  8. [The] [S]tate misled federal officials[.]

    And nothing else happened, right?

  9. Can we, just for a moment, reflect on the GOP’s gormlessness in running the one candidate in 2012 who had the weakest position on the one issue that should have handed them the presidency?

    1. Or 2008, or 1996, or …. it’s the stupid party and someone else’s turn is coming up next.

      1. Why Republicans line up to take their turn throwing elections is a mystery to me.

        1. The glory of martyrdom and none of the death.

    2. coughJebBuchcough

  10. But people will die without this.
    DIE, I tell you!

    1. Wyminz and minorities most affected!

  11. Serious question, has any part of Obamacare worked as advertised and been anything but a complete fuck up? Just one thing? If there is, I haven’t heard about it.

    1. Billions went into the pockets of Obama supports and it very well may carry democrats into the white house until 2020.

      Great success!

    2. Serious question, has any part of Obamacare worked as advertised and been anything but a complete fuck up?

      The most important part has been an outstanding success. Harvesting email addresses from the bottom two quintiles of the U.S. population with regards to annual income and supplying them to the Democratic Party’s databases.

  12. I just look at that $135 million figure and I can’t understand how you could spend that much to build a website and some database systems.

    1. And this is why you’re a plebeian pissant cursed to work the private sector salt mines rather than a selfless public servant doing well by doing good for the whole of society: you lack the vision to spend $135 million dollars to build so colossal a fuck-up.

  13. Today, I watched arch prog Stephanie Miller and friends lampoon the crazies who said Ocare would wreck things because the stock market is doing well and unemployment is only 5.4%.

    Pay no attention to that labor force participation rate, huge rises in health insurance premiums, or the unprecedented numbers of people on food stamps or SS disability.

    1. They also were gushing about the road map to a framework to a possible deal with Iran, since Obama got something through negotiation instead of waging a $3 trillion war like the evil W.

      1. Yep; a nuclear-armed Iran and forever bifurcation martial power in the middle east in the name of “balance”.

        Call me crazy if I’m not in love with either outcome.

        1. ^bifurcating

          READ A BOOK, SWYPE. GOD.

  14. I recall the odious Jonathan Gruber bragging about how MA’s scheme was funded by scamming money from the feds.

    Behold another prog claiming that end justifies the means, with a straw man thrown in for good measure: “You don’t like Obamacare? Well, I guess you don’t want people to have health insurance then.”

  15. […]
    As reported in the last “Oregon Trial” dispatch, it’s not only possible but likely that the state of Oregon scuttled the launch of a functional Obamacare website for political reasons, after wasting $300 million in federal taxpayer dollars.

    That’s right: the total earnings of 300 working American lifetimes just tossed aside like it was nothing. This happened because a corrupt governor badly wanted to win reelection for a fourth term. He pulled it off last November, and lasted all of 38 days of the new term before resigning.

    The Government Did WHAT With $300 Million?

  16. I’d like to hope that the state worker who complained that the tests were performed deceptively and was then “removed from duty” has been reinstated and promoted.

    But somehow I doubt it.

  17. Thank God there is now a GOP governor in place to take all the blame. Yeah, I know: That sounds ridiculous. So, mark my words and let’s see…

  18. I must admit – sadly – that I now live in what is now called Taxachusetts.

    It was once called Massachusetts but that was when titans of Liberty such as Emerson and Thoreau roamed the land.

    Now it is Taxachusetts – a state of progressive stupidity.

    A state were a medical marijuana bill was passed in Nov 2012 – which allows a once free citizen to perhaps smoke some reefer if you could find a doctor who said because of such of such condition you can get a reefer certificate.

    As of today – it is difficult to buy some medical reefer.

    This is from the state Dept of progressive stupidity medical reefer dept of Taxachusetts.

    Program Updates

    Effective February 1, 2015, paper certifications from physicians will no longer be sufficient for compliance with registration requirements under DPH Marijuana Regulations. All patients, including those currently holding a paper certification, must obtain an electronic certification from their physician and be registered with the Medical Use of Marijuana Program to possess marijuana for medical use.…..marijuana/

    This is why I a free citizen will not have anything to do with taxing and regulating marijuana.

    It must be re-legalized but not taxed and regulated.

    I will smoke my reefer, listen to some rockabilly and rock out with some hot rockabilly chicks.

    1. Obviously, the dear old Bay State wants you to grow your own – to be a kind of locavore. I am surprised that neither Hampshire College nor UMass have not yet added hemp cultivation to their agricultural programs.

  19. “the Massachusetts Health Connector basically didn’t work at all during the first open enrollment period. ”

    Welcome to government contracted software development!

    “they are now accused of having intentionally misrepresented their progress (or lack thereof) to federal officials.”

    Heavens to Betsy! Management lying about the progress of a software project! Such a thing has never before existed in the world!

  20. Nathaniel . although Stephanie `s rep0rt is super… I just bought a top of the range Mercedes sincee geting a check for $4416 this last four weeks and would you believe, ten/k last-month . no-doubt about it, this really is the best-job I’ve ever done . I actually started seven months/ago and almost straight away started making a nice over $79.. p/h….. ??????

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