Back-end issues could make insurers go broke

Accenture's failure to fix the back-end issues on by mid-March could send insurers into bankruptcy and jeopardize the whole healthcare industry, according to a procurement document posted on a federal website, The Hill's Healthwatch reported.

The document, signed by health officials in December and January, warned of "limited time to build this functionality and failure to deliver the functionality above by mid-March 2014 will result in financial harm to the government."

The U.S. Department of Health & Human Services hired Accenture earlier this month to fix when it realized CGI Federal, which was originally hired to connect the federal health insurance exchange to insurers, couldn't perform its duties, FierceHealthcare previously reported.

But Accenture faces an uphill battle because the back-end system on exposes the entire healthcare reform program and the health insurance industry to "inaccurate forecasting" of risk mitigation programs that pay insurers more for enrolling sick, expensive consumers, as well as incorrect cost and payment estimates associated with running the federal marketplace, according to the document

"If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers," the document states.

What's more, if Accenture fails to resolve issues with payments to insurers when their enrollees qualify for federal subsidies--which HHS pays directly to the companies--insurers could face "financial risk; potentially leading to their default and disrupting continued services and coverage to consumers," the document states.

As Accenture works to fix the technical problems, HHS is implementing a workaround to ensure its automated payment system would be ready "in the next months," Gary Cohen, the director of the HHS Center for Consumer Information and Insurance Oversight, told a House panel last week, Healthwatch noted. He added that a stopgap system would start paying insurers next week for subsidies they're already owed.

To learn more:
- read The Hill's Healthwatch article
- check out the procurement document (.pdf)