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Shumlin Administration Requests Corrections To Newsweek Story

Three days after the publication of a Newsweek story that featured some incendiary claims about Vermont’s new health insurance exchange, the Shumlin administration is firing back with a list of factual errors and misleading statements it says are contained in the piece.

The story, written by reporter Lynnley Browning, most notably alleges that contractors willfully deceived state officials about the readiness of the new website.

Browning opens her story with a detailed scene from last July, in which a room full of state employees are watching what they believe is a “live interface” between Vermont’s health care exchange website and a federal data hub.

Browning reports that the demonstration was in fact a deception, manufactured by CGI workers to make officials at the Department of Vermont Health Access believe that the website was on track for a successful Oct. 1 launch.

Evidence for Browning’s reporting comes from an unnamed source who, according to Browning, was “familiar with the event who declined to be named.”

In a correspondence sent this week to Newsweek, Larson denies the claim, and says “the demonstration showed exactly what it was designed to: that Vermont Health Connect (VHC) was connected to the federal data hub, that it could send and receive information, and that VHC could determine accurately the eligibility of a hypothetical customer.”

Larson says his department now has documentary proof of the exchange's connection with the data hub last summer.

Larson’s letter enumerates other elements of the story that he says are either “misleading” or “simply not true.” Browning hasn’t responded yet to a request for comment from VPR News.

Below are excerpts from the Newsweek story, followed by the administration's written response:

Excerpt from the Newsweek story:

In the demonstration, "a lot was left to the imagination," says a person familiar with the event who declined to be named, citing the ongoing work between CGI Federal, which has an $83 million contract for the job, and Vermont officials. Some state staffers that July 26 thought it showed "live" registrations and enrollments by hypothetical consumers, when in fact static, premade screens were displayed. "People weren't technologically sophisticated enough to understand what was actually going on," this person explains.

Administration: "This demonstration showed exactly what it was designed to: that Vermont Health Connect (VHC) was connected to the federal data hub, that it could send and receive information, and that VHC could determine accurately the eligibility of a hypothetical customer."

And while some Vermont staffers remained skeptical that the website was all CGI Federal had promised, others were fooled into believing things were going well.

Administration: "This is purely speculative and backed up by no evidence. The question of whether or not VHC staff felt they were fooled during the demonstration was never asked."

Yet Vermont is spending more federal money, $167.9 million, than any other state in the nation on uninsured residents, according to Newsweek calculations based on data from the Centers for Medicaid and Medicare Services (CMS) and the U.S. Census Bureau. Larger states that are spending less but have higher numbers of uninsured include Connecticut, Massachusetts, Minnesota and Rhode Island, plus the District of Columbia. Massachusetts, for example, has 272,000 uninsured among its 6.5 million residents - yet it is spending $134.4 million in federal money building its marketplace. Connecticut is spending nearly as much as Vermont, some $164 million, but it has 284,000 uninsured people. Washington, D.C., with 50,000 uninsured, is spending $133.4 million.

Administration: "Each state was awarded funding differently, so a comparison is not accurate. The state of Vermont has paid CGI $19 million to date, and is withholding payment to CGI for functionality that is not completed. Vermont’s federal grant award is also not spent exclusively on CGI. For example, grant awards are used for work related to training, personnel, outreach and education, and in-person assisters."

But that's where Vermont's numbers start to get fuzzy. "Select" doesn't mean "cross the finish line" - actually buying a policy. More strikingly, the figures cover both online and paper enrollments that are later manually entered into the system by CGI Federal. Translation: there is no way to tell how many Vermonters have used the website to successfully sign up.

Administration: "There is nothing “fuzzy” about the numbers. Over 25,000 Vermonters have picked plans using Vermont Health Connect that took effect in January. And over 23,000 have had their coverage effectuated. The statement below references 11,943 who have crossed the finish line. It is more accurate to say that those individuals have enrolled in a private, qualified health plan. The remaining Vermonters who make up the referenced 23,000 have enrolled in Medicaid, also a health plan.

"We expect the remaining to select their plans and pay their premiums over the next few weeks, since many are currently covered and have until March 31 to select plans under extension options.

"CGI does not manually enter any applications into the system. Even paper applications are entered into the same online system, by VHC staff.

CMS data show that as of December 28, 2013, nearly 37,000 Vermonters had applied for coverage both online and via paper and been approved as eligible - the first of many hurdles to getting insurance. The difference between that 37,000 in the early stage and the 11,943 who have actually crossed the finish line suggests that thousands of Vermonters are still bedeviled by website failures.

Administration: "Contrasting the number of people who had their eligibility determined by starting an application with the number of people who checked out, made a payment and had their coverage effectuated is very misleading. Because of extension options provided by the Governor, many of the Vermonters that had an initial eligibility determination chose to extended their 2013 coverage until the end of March. Therefore, many are waiting to complete their plan selection until mid-March. If Vermonters work for a small business, their employer either extended 2013 coverage through March or immediately enrolled in Vermont Health Connect coverage through an insurance carrier."  

Because the website still isn't handling small-business enrollments, the state has no idea how many of the 55,000 employees of small firms - such as craft breweries, organic farms, start-ups and the like - expected to benefit from the exchange have actually signed up.

Administration: "About 46,000 Vermonters who receive their insurance through a small businesses had plans that rolled over on Jan. 1. Of that, about 18,000 have directly enrolled in a 2014 VHC plan through BCBS or MVP. Another 17,800 had their current plans extended for up to three months. About 5,400 are sole proprietors who, under the new ACA rules, are required to buy insurance as individuals. They can today sign up through VHC, but their 2013 coverage was extended for up to three months as a default to ensure they didn’t see a lapse in coverage. And about 4,600 work for an employer that decided to no longer offer coverage in 2014. Those Vermonters can sign up through VHC today, if they have not done so already."

On February 1, Vermont Republicans passed a resolution in the state legislature calling for enrollment through the exchange to be voluntary, and for residents to have the option to buy health insurance in other states.

Administration: "This is simply not true. No such resolution passed the Vermont legislature."

In mid-November 2012, troubled by reports that Oregon was having problems building its marketplace through Oracle, its main technology contractor, Shumlin made a dramatic decision. He jettisoned Oracle and went shopping for a new partner.

Administration: "The decision to end discussions with Oracle was made because Oracle would not agree to the state’s legal terms. In retrospect, given the difficulties of rolling out exchanges in Vermont and around the country, it was absolutely the right call to insist on legal protections for the state of Vermont."

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