Massachusetts Cuts Relationship With CGI on Health Insurance Marketplace


Massachusetts officials announced to reporters following a meeting today that the state will be cutting its relationship with CGI over failure to update the state’s health insurance exchange marketplace. Sarah Iselin, a special assistant to Governor Deval Patrick who is tasked with fixing the marketplace held a meeting with the board of the Massachusetts Health Connector to discuss a way forward. Following that meeting, Iselin told reporters that the state will be ending its relationship with CGI.

CGI was working with both Massachusetts and Vermont on their state-run health insurance exchanges and both states halted funding to the contractor citing an inability to meet deadlines and provide deliverables. Massachusetts had a $69 million contract with the company for the exchange work and has paid out some $15 million of that. State officials say no more payments will be made to CGI, and they may look at ways to recover some of that money as negotiations move forward to unwind the relationship. Surprisingly, the Vermont contract was larger – $82.6 million.

The announcement is significant given that the company was also responsible for work on the federal exchange and had little in the way of answers when that website went to launch even though it was nearly impossible to use.  As CivSource reported, CGI was subsequently removed from the federal effort. 

No confirmed word yet on which contractor will take over for CGI. Massachusetts is required to bring parts of its existing healthcare system in-line with the compliance rules for the Affordable Care Act, even though the state has had a local health insurance exchange-like system for a number of years. CGI was tasked with that overhaul, which spokeswoman Linda Odorisio says the company has “worked tirelessly,” to do.

Massachusetts has already brought in Optum, a subsidiary of UnitedHealth to work on the backlog of applications resulting from the buggy sign-up process online. Keen observers will recognize Optum as it has also worked on the federal exchange.

Massachusetts resorted to a paper based sign-up process in order to try to keep pace with deadlines, similar to what Oregon did  as repair work went forward on its own troubled exchange. Oracle handled the work on the Oregon exchange, and recently got hit with an investigation and acidic critique of its work by officials from the Centers for Medicare and Medicaid Services (CMS). CMS provided the grant funding for the project. The review by CMS showed that Oracle had refused even basic requests from Oregon for information on the system it was paying for. Local officials are considering an additional investigation into the company and its work on Covered Oregon the name for the exchange there. The figure on that project sits around $160 million, according to The Oregonian.

Contractors have blamed unclear guidance and unrealistic deadlines throughout federal and state build outs of the exchanges. However, some of the transparency concerns highlighted in the CMS report on Oregon’s exchange make it clear that the lack of management and competency on this work goes both ways. The President said recently that enough Americans have signed up for health insurance on the exchanges to ensure the longevity of the program – that reality is even more significant set against the backdrop of IT failures surrounding the implementation. Watch this space.