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Major Conflict of Interest with QSSI, the Contractor for the Health Insurance Exchange

Posted Oct 26 2013 12:00am

I have blogged previously about the rocky start for CMS's healthcare insurance exchange (see:  Problems with the ACA Health Portal; Implications for Its Future Success ) in which I discussed the mistake of having the government function as the system integrator which seems to have been far past its level of competence. A new company, QSSI, has now been named as the systems integrator (see: NEW CONTRACTOR: ‘Fixable’ ):

Jeffrey Zients, the former White House budget officer assigned by Obama to fix the mess, said...that QSSI, a Maryland tech company, would serve as the “general contractor” in working to make the website function smoothly by the end of November. The announcement was a shift in tone and strategy for the administration. The federal Centers for Medicare and Medicaid Services (CMS) was the lead agency in overseeing creation of the online site that buckled under the volume of initial visitors following its October 1 launch. QSSI was one of the dozens of contractors working with the government on the project coordinated by CMS, and now has the role of managing the correction efforts, according to Zients.

There's a small problem with this appointment of QSSI. It's owned by UnitedHealth Group which also owns United Healthcare (see: Conflict-of-interest concerns raised as Obama races to implement health reform ). Here's a quote from this latter article from last November when the company had an even smaller role in the development of the web site:

The fast-approaching deadline gives the administration little time to scrutinize private-sector partners [of the health insurance exchange] for conflicts of interest. The purchase of one of these contractors, Quality Software Services, Inc. (QSSI), by UnitedHealth Group, a major healthcare conglomerate, has sparked concerns about a potentially uneven playing field. QSSI, a Maryland-based contractor, in January won a large contract to build a federal data services hub to help run the complex federal health insurance exchange.

Yes, you heard me correctly. The general software contractor now for is owned by the holding company that also owns the largest health insurance company in the country, UnitedHealthcare. Does the fact that UnitedHealthcare seems to be not participating the healthcare exchange, as most other private insurance companies are doing, change the equation (see: UnitedHealth, Aetna and Cigna opt out of California insurance exchange )? For me, the answer is no but here are the details about the insurance exchange in California:

UnitedHealth, Aetna and Cigna are small players now in California's individual health insurance market. More of their business is focused on large employers, where most Californians receive their health coverage. But the companies signaled a wait-and-see approach on these new government-run marketplaces.

I have little enthusiasm for UnitedHealthcare or any of its sibling companies. I have blogged previously about some of the major ethical lapses of the company (see: UnitedHealth Threatens to Fine Doctors for Sending Specimens to Quest ; UnitedHealth Settles Suit with New York Attorney General CuomoAnother Look at UCR Rates as They Affect Healthcare Consumers ). UnitedHealthcare agreed in 2009 to settle a suit brought by Andrew Cuomo, the attorney general of New York. The company was described by Cuomo's office as having engaged in "a scheme to defraud consumers" of hundreds of millions of dollars over the last decade." It owned a company called Ingenix that set UCR rates for healthcare reimbursement. In short, one of the UnitedHealth Group companies established reimbursement rates that were then later used to compensate another of its companies. As part of the settlement, UnitedHealthcare Group agreed to pay $50 million to fund a nonprofit company to create a new, independent database to replace Ingenix’s and “educate health care consumers more directly about market prices for health care services.”

QSSI also does not seem to have a squeaky clean reputation so it should feel comfortable in the UnitedHealth Group (see:  Obamacare exchange contractors had past security lapses ). 

[QSSI] is also charged with helping the Centers for Medicare and Medicaid Services (CMS) maintain and administer the data hub. The company in June [of 2013] was the subject of an audit report by the U.S. Department of Health and Human Services Inspector General for failing to adhere to federal government security standards in delivering, what appears to be unrelated, IT testing services for the CMS.The 16-page report noted that the systems QSSI used for testing purposes at CMS did not include controls for protecting against misuse of USB ports and devices as required by the CMS.

Let me make just one more observation. The Obama administration seems to be heading into a political squall powered by the enraged geek establishment and media. You can kill terrorists with drones but you can't f**k up a web site. As this high-tech controversy plays out, the bad blood between the Democrats and Republicans will seem like a child's tea party. 

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