MONTPELIER — The state has been paying for work that hasn’t been performed and is at a high risk of failing to meet pending key deadlines in the development of the state’s online health insurance exchange, according to a performance audit released Thursday by State Auditor Doug Hoffer.
The audit also indicates growing unease by the state’s largest health insurance carrier, Blue Cross Blue Shield, over billing discrepancies amounting to millions of dollars in unpaid premiums on the company’s ledger.
The myriad malfunctions and setbacks associated with Vermont Health Connect have been well-documented since its bungled launch in October 2013. Key automated functions expected to be part of the online marketplace remain absent, and small businesses must still enroll offline directly through insurance carriers.
That is after nearly $200 million in federal funding has been spent by the state on planning, developing and implementing the exchange to meet requirements laid out in the federal Affordable Care Act.
Rather than rehash the exchange’s known shortcomings, Hoffer’s office spent the past several months reviewing the Shumlin administration’s response to those challenges and whether appropriate changes have been made to achieve the administration’s desired outcomes.
The results outlined in the report are mixed.
Gov. Peter Shumlin, a third-term Democrat, announced last month a new time frame for bringing key automated functions online. The ability to make online changes to one’s personal information, known as change of circumstance, will be in place by May 30, the administration now promises. An automated coverage renewal process will follow and in place by the fall — in time for the next open enrollment period.
Should those deadlines be missed, the administration said last month it will begin to transition away from its own exchange and attempt to migrate to one run by the federal government.
Hoffer’s report outlines several issues that makes meeting the deadlines questionable.
The state’s contract with Optum, the firm now developing VHC, contains no provision allowing the state to seek monetary consequences if it fails to deliver the missing functions. There are no financial penalties or liquidated damages like those in place with the state’s previous contractor, CGI, which the state parted ways with last fall. Nor is there a provision allowing the state to retain payment until the project is complete.
“Without these types of clauses, Optum has assumed little contractual risk and the State has limited its ability to seek recourse if the contractor’s performance is unacceptable. This seems to be a result of the State’s limited leverage to negotiate better terms,” the report states.
Meanwhile, the state does not have a contract in place to complete the second upgrade slated for the fall. If a contract is in place in the next couple of months then completing the project “is considered feasible,” according to the report.
Still, the state will not know if it has the funding to pay for all of the development work until it negotiates a price with Optum. The state would have to reduce the scope of work or find additional funding sources if the developer’s prices is higher than the federal funding available.
“According to an independent verification and validation contractor, as of April 3, 2015, the VHC development project has been in long-term “red,” or high-risk, status due to continuous contracting delays and unresolved agreement on the scope to support all VHC requirements,” the report states.
Hoffer’s report also raises concerns about competition for the staffing and technical resources within state government needed to meet the administration’s self-imposed deadlines. It notes that a March 16 internal project status report indicated that the resources to help meet those deadlines had not yet been confirmed. And there was a lack of agreement between various Agency of Human Services departments about which resources would be allocated to the VHC system development project.
Lawrence Miller, Shumlin’s chief of health care reform and the man charged with righting the ship, acknowledged the report is highly critical and lacks confidence in the administration’s ability to meets its deadlines.
“I don’t know that the track record of Vermont Health Connect has given anybody the basis for confidence,” he said in an interview before the audit’s release. “I think that the auditor’s assessment of the risk of completing the project on time is accurate. There is not a lot of slack in the schedule.”
Still, Miller said the administration remains confident the work will be completed on time.
“This has been done with a good, detailed project plan. Optum and the carriers are saying it’s achievable,” he said. “Things are happening on time.”
Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal P. Goswami about the health care package in play in the House, new unemployment numbers and gun legislation that cleared the Senate this week.
Gov. Peter Shumlin and Vermont Press Bureau chief Neal Goswami discuss a recent revenue downgrade, the president’s support for paid sick leave, gun legislation introduced in the Senate and legislators’ efforts to scuttle Vermont Health Connect.
MONTPELIER — About 100 single payer advocates, gathered in the State House Thursday afternoon to demand forward movement on a universal, publicly financed health care system, disrupted some ceremonial proceedings before a smaller group staging a State House sit-in were removed by police at 8 p.m.
The Vermont Workers Center organized demonstrations Thursday afternoon that took place in the House chamber, outside the entrance to the chamber and in hallways throughout the State House while Democratic Gov. Peter Shumlin was being sworn in and delivering his inaugural address.
“Ain’t no way we’re backing down, we’re rising up, the time is now,” they chanted at one point.
The protesters who staged the sit-in in the well of the House into the evening said their intention was to extract a commitment from Democratic House Speaker Shap Smith for a public hearing on a public financing plan and report prepared by the Shumlin administration.
No such commitment was made.
Smith said Thursday afternoon that hearings will take place in the House Health Care and House Ways and Means Committees, but did not promise a public hearing.
“I think this was an incredible example of the openness of our democracy. In the people’s house people are allowed to petition and I would expect that over the coming weeks we’ll talk with people about setting up hearings,” he said.
The Vermont State Police, along with Capitol Police began arresting protesters one-by-one shortly after 8 p.m. A Vermont State Trooper asked them several times to leave before the arrests began. Most walked out escorted by officers. At least one was dragged.
Montpelier Police were staged outside the State House to assist if needed.
Vermont State Police Col. Thomas L’Esperance, who stayed at the State House all day as the sit-in continued, said troopers began communicating with a spokesperson for the group to explain “the rules of engagement.”
“It’s been a peaceful protest, so no headaches there,” L’Esperance said. “Some chose to leave and others chose to be arrested.”
One woman refused to standup and was dragged out of the House chamber by police. The woman screamed that she was being hurt as police applied “control and restraint techniques.” L’Esperance said officers were using as little force as necessary to remove people.
There were no disruptions while the governor was delivering his address, but immediately following his address a group of protesters blocked the entryway to the House chamber while others attempted to enter the gallery. Protesters unfurled banners at least twice that were quickly pulled down by State House staff.
As the Rev. Robert Potter was delivering the benediction protesters began to sing. Barre Mayor Thom Lauzon, a Republican, attempted to remove one man who was singing from the gallery, but eventually relented. The man continued to sing while Potter spoke. Lauzon and Rutland Mayor Chris Louras, who once served in the Legislature as a Republican, blocked the doorway preventing others from entering the chamber.
Single payer advocates have been demanding the state move forward with public financing of a state-run health insurance program since Democratic Gov. Peter Shumlin decided to abandon his own long quest for such a system last month. Shumlin, in a surprise announcement, declared the cost too high for the state at this time.
The protests, especially the disruption of the benediction by a popular reverend, did not sit well with many lawmakers.
“I think they should get a job,” Sen. Bobby Starr, D-Essex/Orleans, after leaving the House chamber.
Senate President Pro Tem John Campbell, D-Windsor, said he was disappointed with the actions of the Workers Center and told Executive James Haslam that in a brief exchange Thursday evening. He said Vermonters have a long tradition of disagreeing respectfully.
The speaker declined on Thursday to say if the protesters went too far.
“I love the fact that we live in a society where we have the opportunity to freely express ourselves. There’s always a balance between free expression and decorum in ceremony. We air on the side of openness,” Smith said. “What I would do and what they would do are probably different things, but you know what, I’m just a guy from Wolcott, Vermont.”
Haslam, meanwhile, said his organization made a strong show of support for a single payer health care system.
“We, I think, have seen people in Vermont rejecting business as usual, that we’re not going to let a system … put this Green Mountain Care financing report on a shelf and just continuing with the current system, which is very good for the health care industry but is not good for people who need health care.
The disruption of Potter’s benediction was not planned and not condoned by the Workers Center, according to Haslam.
“I think that there was some confusion and definitely some people that were acting spontaneously. There were other people saying that’s not a good idea. I think people thought after the governor ended his speech that it was over and didn’t realize who was speaking,” Haslam said.
MONTPELIER — Republican gubernatorial candidate Scott Milne has launched his first television commercial as the primary approaches next week.
The ad, which will be running on WPTZ, Fox 44/ABC 22 and WCAX through the primary, features footage from Milne’s campaign kickoff event last month in Barre. Former Republican Gov. James Douglas is prominently featured, calling Milne the next governor of Vermont.
“Internally, I think sort of the campaign family, we’re stoked about it. I think it’s very, very good and I’m appreciative of all the support from Gov. Douglas,” Milne said Tuesday.
The commercial also shows footage of Milne’s mother, former GOP state Rep. Marion Milne, who passed away on Aug. 11.
Milne said his campaign is spending just over $20,000 on the commercial through next Tuesday.
A story in Sunday’s editions of The Times Argus and Rutland Herald detailed the components of a $1.8 million contract in which the state of Vermont enlisted the services of a Washington, D.C., consulting firm for public outreach related to the new health insurance exchange.
GMMB, best known for its work on the presidential campaign of Barack Obama, is handling everything from media relations to the production of television advertisements. And the products they’ve delivered offer a fascinating behind-the-scenes look at the battle for hearts and minds by the Shumlin administration.
Below, you’ll find source documents used for the story, including some previously unreported material on the “launch event,” in which the state was going to pay GMMB more than $125,000 to organize a single press conference on the day that Vermont Health Connect launched.
The administration, according to Commissioner of Vermont Health Access Mark Larson, ultimately decided to scrap the event, and will only pay GMMB for launch-event materials produced prior to the decision to forgo the press conference.
Neal Goswami has joined the Vermont Press Bureau as of Sept. 3. Goswami was a reporter for the Bennington Banner for more than 7 years, and most recently was the newspaper’s social media editor and senior staff reporter.
Goswami will join Bureau Chief Pete Hirschfeld in reporting on state government, the legislature and statewide issues. He will work out of the Barre offices of the Herald’s sister newspaper, the Barre-Montpelier Times Argus, and provide local coverage on Waterbury and other assignments in Central Vermont; he report out of the Statehouse during the legislative session. Goswami is a graduate of UVM, and covered the Democratic National Convention in 2008 on a joint assignment with the Denver Post.
He has just moved to Montpelier. Follow him on Twitter: @nealgoswami
He referred to a study that was written up in the Times’ Economix blog, which compared the concentration of competition, measured by how much of a state’s insurance market is concentrated in the largest two insurers, to the rise in the cost of health insurance premiums in the same state over the ten years between 2000 and 2010.
The study finds that there is not a meaningful correlation between more competition and lower costs. In fact, Sanger pointed out, the reverse actually seems to be true – and this raises concerns about the direction we’re taking with Obamacare.
The concern comes from the increased competition required from health insurance exchanges – which states are required to have set up by 2014, or the federal government will set up for them.
Apparently, the more concentrated the insurance market, the more leverage the biggest insurers have to bring down costs. The more fragmented the market, the less leverage each individual insurer has. As Economix puts it:
In imperfect health care markets, competition can be counterproductive. The larger an insurer’s share of the market, the more aggressively it can negotiate prices with providers, hospitals and drug manufacturers. Smaller hospitals and provider groups, known as “price takers” by economists, either accept the big insurer’s reimbursement rates or forgo the opportunity to offer competing services. The monopsony power of a single or a few large insurers can thus lead to lower prices. For example, Glenn Melnick and Vivian Wu have shown that hospital prices in markets with the most powerful insurers are 12 percent lower than in more competitive insurance markets.
While flipping through channels the other night, one of our editors saw a familiar face plastered on the screen of Fox News’ O’Reilly Show – former Press Bureau and Rutland Herald reporter Tracy Schmaler, who is now a spokeswoman for the Department of Justice’s Office of Public Affairs.
The two operations were similar in that undercover agents were basically feeding guns – including semiautomatic weapons – and more into the Mexican drug cartel system in order to track them to the bigger, higher-up fish up the chain. This misguided attempt at flushing out the kingpins resulted in about 2,000 guns disappearing into criminal hands, and possibly the use of those guns in murders, shootings, and the death of a US agent.
The two operations differ in the respect that “Wide Receiver” took place primarily in 2005 and 2006, under the Bush Administration, while “Fast and Furious” primarily occured in 2010 and 2011, under the Obama Administration.
In a lobbyist disclosure form filed with the secretary of state today, Bruce Lisman, founder of Campaign forVermont, revealed he spent more than $200,000 of his own money on the nascent organization between Jan. 1 and March 31.
It’s a significant amount of money byVermont standards, and Lisman sought to get out in front of the news with a press release fired off to news outlets moments ago.
“I am spending my own money because I am concerned about the economic damage current policies are having on lower and middle income Vermonters,” Lisman said in a written statement. “The futures of our state and our young people are at stake. I’ve worked hard and have done well. Spending my money onVermont’s future is more important than standing by passively.”
The Vermont native and UVM graduate made quite a name for himself on Wall Street, where he rose to head the global equities division at Bear Stearns, a position he held when the investment firm collapsed in 2008.
Most Vermonters by now have probably heard Lisman’s voice on their local radio station. He’s bought air time to run dozens of ads, some of which criticize the Shumlin administration’s stance on taxes, health care and energy.
Lisman swears his group is a policy outfit with no political motives. But his sustained focus on hot-button political issues has perked Democrats’ antenna.
The Vermont Democratic Party earlier this year asked Attorney General Bill Sorrell to launch an investigation into Campaign forVermont, alleging the group had run afoul of campaign-finance laws that prohibit 501(c)4 organizations, like his, to advocate for the election or defeat of a specific candidate.
The group’s tax status allows it to raise unlimited funds without disclosing the names of its donors, so long as it doesn’t cross the line into electioneering.
Sorrell summarily dismissed the complaint. But the incident served to expose the adversarial relationship between Democratic party officials and the political newcomer using his considerable resources to air conservative talking points.
Lisman has repeatedly denied any interest in running for political office this year, and he insists his organization is totally apolitical.
“Across the board, the future ofVermont’s prosperity is at risk. From the pursuit of expensive energy, an impenetrable education financing system, an all-in-bet on a new health care coverage system and a state budget growing faster than our economy, Vermonter’s hopes for a more realistic and common sense approach for a prosperous economy are being highjacked,” he said.
With lines like that, he’ll have a tough time convincing people he isn’t out to defeat the Democratic incumbent.
The disclosure forms show that Lisman’s group spent $194,000 on advertising, $15,000 on compensation, and $3,000 on “other.”
The release indicated that Lisman “will continue to conduct outreach” in the future.