- The Washington Times - Tuesday, September 22, 2015

A leading contractor charged taxpayers $4 million to mop up errors the company itself caused in the federal Obamacare website, an inspector general reported Tuesday, saying the government refused to pay just $270,000 of the bill.

CGI Federal, one of the main vendors responsible for the HealthCare.gov website that repeatedly crashed during the rollout of Obamacare, billed taxpayers $56 million for its work from Oct. 1, 2013, through February 2014 — including $4 million for cleaning up glitches on the website, the Health and Human Services inspector general said.

The contractor was dropped from the project that February.

The inspector general retraced the spat between the administration and CGI Federal, and said it couldn’t be sure if the $270,000 the government withheld was the appropriate amount because the Centers for Medicare and Medicaid Services (CMS), the HHS agency that oversaw the website, did not validate the data.

“The invoices did not identify details necessary to support the charges, such as the employees’ names, hours worked by each employee, and the employees’ hourly rates,” the report said.

A CGI Federal spokeswoman referred to its position in the report, which said the company did not agree that its invoices from October 2013 to February 2014 included charges for correcting defects in their work.

In early 2014, the administration tapped Accenture to work on HealthCare.gov in place of CGI Federal.

Also Tuesday, the inspector general said CMS did not use the correct project codes to record $24 million worth of transactions related to HealthCare.gov, so the agency could not “accurately account for and report to interested stakeholders the amount spent on the development, implementation, and operation of the federal marketplace.”

CMS objected to the finding, saying the work cited by the inspector general was related to the broad implementation of Obamacare and not just HealthCare.gov, including Medicaid systems.

HHS said Tuesday it had overhauled its contracting and management practices to rein in costs and beef up accountability in its contracting.

“CMS has sought to implement extensive contracting reforms and to make needed changes, including terminating the CGI contract, moving to a new type of contract with Accenture that rewards performance, and bringing in new leadership to oversee Marketplace operations and metric-driven quality reviews of contracts across the agency,” HHS spokeswoman Meaghan Smith said.

Tuesday’s report is part of a series of audits the inspector general has conducted on contracts tied to HealthCare.gov.

Investigators said part of the problem in the CGI Federal situation was the type of contract CMS gave the company, in which the government can withhold a portion of the company’s fee, which basically amounts to its profit, but passes on the cost of flawed work to taxpayers.

“Cost reimbursement contracts place the risk of performance on the government,” the inspector general said.

After a rocky first year, HealthCare.gov performed better in its second go-around this year, and now serves 37 states.

HHS Secretary Sylvia Mathews Burwell announced Tuesday that 17.6 million Americans are now covered under Obamacare, through a combination of plans bought on the exchanges, expansion of Medicaid in 29 states, and young adults who are now able to remain on parents’ plans until age 26.

The law’s third open-enrollment period is set to begin Nov. 1. Although website problems are largely behind them, the administration now faces the tough task of rooting out the people who didn’t flock to the exchanges in the first two years.

“While those remaining uninsured may be harder to reach, we’re working smarter to reach them,” Mrs. Burwell said Thursday at the Howard University College of Medicine. “We know Americans are depending on us, and we’re doing everything we can to help them find the coverage they need.”

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