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IT strategist: Exchanges face more pain

PPACA 2015

John Sarich (File photo)
John Sarich (File photo)

John Sarich -- an insurance technology expert who said in May 2013 that the public exchanges should be in the testing stage by July 1, 2013, if they wanted to have a smooth launch -- says development problems look about as bad today as they looked a year ago.

Sarich, vice president of strategy at VUE Software, an insurance automation company, said he has seen no evidence that the vendors for the Centers for Medicare & Medicaid Services (CMS) has written the code for the back-end systems that are supposed to handle tasks such as billing qualified health plan (QHP) enrollees, paying Patient Protection and Affordable Care Act (PPACA) subsidies, and reconciling actual coverage numbers with the projected numbers used to calculate the subsidy payments. 

Accenture, the vendor, originally was supposed to have a back-end system running by mid-January. HHS then pushed the deadline back to mid-March. Now, Sarich said, he thinks the idea that Accenture will have the back-end systems ready by this fall may be optimistic.

See also: What went wrong with – and what now

Because CMS -- the division of the U.S. Department of Health and Human Services (HHS) that manages the HHS-run exchanges and oversees the state-based PPACA exchanges -- has no back-end systems ready, even states with reasonably function information technology (IT) teams have no ability to integrate their systems with the federal back-end system, let alone test integration, Sarich said. But, if the exchanges really want to have the individual QHP open enrollment period that starts Nov. 15 work better than the one that started Oct. 1, they should really be testing integration now, he said.

Today, he said, because of the lack of functional back-end systems, simply sending QHP holders accurate bills and paying claims accurately depends on manual work-arounds.

Sarich said the big life and health insurers have the luxury of spending many years to develop big IT projects, and can do so quietly, out of the public eye. But even many of those projects fail, he said. He thinks getting the public exchanges systems to work properly could take three to five years, in part because of the exchange systems will have to connect with what, at least for now, are antiquated systems that rely heavily on floppy disks and COBOL.

Sarich criticized the focus on, the HHS exchange enrollment portal. "Your portal is nothing more than a window," he said. "All the stuff behind the scenes wasn't there."

Sarich suggested that exchange managers and exchange QHP issuers should probably be thinking about ways to make any "manual work-arounds" they use to get around the lack of functioning enrollment and back-end systems as automated as possible, by using technology such as optical character recognition scanning to reduce the amount of paper involved. 

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