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MNsure: Anatomy of a breakdown

When Executive Director April Todd-Malmlov abruptly resigned from MNsure last December, it was unclear whether her decision stemmed from sensational news reports about a vacation she took to Costa Rica or because of the shipwreck that was Minnesota’s health insurance exchange.

A day before her departure, Todd-Malmlov met with Department of Human Services Commissioner Lucinda Jesson, who asked the former exchange head to step into a supporting role so that now-interim CEO Scott Leitz could take the helm of the beleaguered marketplace. That’s according to Todd-Malmlov’s recounting of the events. Jesson, interviewed on Thursday, said she couldn’t discuss personnel matters. Gov. Mark Dayton has previously declined to comment about her departure.

“I chose to leave, and the reason I chose to do that was to protect the welfare and privacy of my family,” Todd-Malmlov said in a recent interview. “Really, the personal attacks and the harassment, particularly at my home, were just becoming too much, and so I chose to put my family first and to resign.”

What Todd-Malmlov left was an exchange in trouble – largely, she says, because of now very public issues with the software product that IBM-Curam provided the exchange. Gov. Mark Dayton wrote a scathing letter to the company on Dec. 13 calling them out for misleading the state about the completeness of its product, hindering Minnesotans from getting health insurance and causing massive amounts of work for state employees trying to fix the issues – some of which IBM allegedly kept from MNsure staff.

“The main issues that we had were with Curam,” Todd-Malmlov said. “I’m not saying that other vendors didn’t have defects that we worked through, before and after go-live, because we did, but [in terms of] the significance of the vendors’ errors, by far the vast majority of them were Curam’s.”

IBM-Curam did not respond to requests for comment. It was paid at least $3.96 million for its work on the exchange, according to MNsure contract documents.

Dayton didn’t write letters admonishing any other MNsure vendors, according to his office. Jesson said some of the Curam issues have been fixed, while others are ongoing or have been mitigated by manual processes. A list of problems with the software went out to county staff this past week, but it’s unclear how serious the remaining issues are.

Though MNsure and the Dayton administration have applauded the significant resources IBM dedicated to fixing the exchange since December, Todd-Malmlov said it doesn’t appear the company fulfilled all of the requests that MNsure made of them when the firm agreed to send extra personnel to work on the repairs in December. A MNsure spokeswoman said the exchange needed more time to look through the list to see how many had been met. MNsure’s functionality has improved since the time of Todd-Malmlov’s departure, but an outside review found that significant work remains ahead in order to make the IT infrastructure stable and functional for the long term.

Now Deloitte Consulting will come in to take over as lead vendor of the project from de-facto state control, a knowledgeable source tells Politics in Minnesota, though that contract is still awaiting federal approval. MNsure spokeswoman Jenni Bowring-McDonough declined to confirm the identity of the new vendor, and deflected questions about the status of Curam’s software and the state’s efforts to repair problems that software has caused over the past six months. “We will be able to address these questions when we make our announcement about the lead vendor,” Bowring-McDonough wrote in an email.

After leaving MNsure, Todd-Malmlov sought out legal and public relations counsel. Interviews with Politics in Minnesota were set up through Blois Olson of Fluence Media, but Todd-Malmlov declined to identify the attorney she has retained.

“What happened after I left [MNsure] was concerning to me, what it was that was being said was concerning enough to me that I thought that that was warranted,” Todd-Malmlov said in a Wednesday interview. “I needed to protect myself.”

OLA investigation looms

Lawmakers – especially Republicans – want answers for the problems that plagued MNsure for the first half of its short life. Legislative Auditor Jim Nobles received a legislative directive to move forward with a wide-ranging audit of MNsure’s past performance on Wednesday. That report will likely be released in December.

Nobles told MNsure’s legislative oversight committee on Wednesday that he will be moving forward with a “comprehensive, in-depth evaluation of many issues related to the development of the website, but also many other issues as well.”

Later, in an interview, Nobles said he would like to speak with Todd-Malmlov.

“At some point in the process, we intend to do that,” Nobles said. “We definitely want to hear her perspective and get her insights.”

Nobles is already engaged in a required audit of MNsure’s use of federal funds.

The auditor told lawmakers on Wednesday at the oversight meeting that state officials have cooperated so far. Nobles noted he has the power to legally compel testimony.

In the past Todd-Malmlov has been criticized for not being as forthcoming as she could be when briefing lawmakers and the administration. Board Chairman Brian Beutner has described MNsure’s style under her leadership as “correct but not clear.”

“I feel that Cindy [Jesson], Carolyn [Parnell] and I were very forthright around where things were at,” Todd-Malmlov said when asked about criticisms that she did not speak plainly about problems with the exchange. “We were all aware of what was going on and giving updates as to what the status was.”

Troubles with Curam

Gov. Mark Dayton’s Dec. 13 letter to Curam put an exclamation mark on the state’s frustration with the firm, but it wasn’t the first time he’d admonished the company for what he deemed its terrible performance.

Todd-Malmlov described in a recent interview a timeline for problems with the Curam product – a sequence of events that MNsure subsequently confirmed to be accurate. Todd-Malmlov said she, Dayton and senior staff from relevant state agencies met with IBM staff in mid-November “to essentially tell Curam, ‘You must fix this, you must bring on resources to fix this immediately.’”

“It’s not frequent, I don’t think, that a vendor has a meeting with a governor, so I think they took it seriously,” she added.

But a month later, the problems had only gotten worse.

The fixes that Curam applied in late November after the meeting were haphazard, Todd-Malmlov said, a course of action that produced severe, unforeseen consequences that caused MNsure’s most serious and publicized problems. Many issues went unnoticed for some time, or required MNsure to work backward from call center complaints to identify.

“Things were broken after they put in that code, and with some things we could find what was broken,” she said. “Other things, we didn’t know what they broke.”

Curam’s fixes, for example, severed the connection between what caseworkers and call center operators saw and what consumers were viewing at home, Todd-Malmlov said. The issues with Curam’s code caused delays in sending so-called “834” files containing applicant information to insurance companies, as well as troubles in sending out invoices to consumers.

“We had no way to help [online customers],” she said. “They would call into the call center, and we couldn’t do anything. That part was broken.”

At one point, there were more 2,500 consumers that MNsure just couldn’t find because of issues with the software. “When people were coming through, they ended up getting lost in the system,” Todd-Malmlov said. “We had no idea why they were getting lost in the system. It’s what was referred to in the [Dayton] letter as ‘the black hole.’”

But the problems started much earlier.

During the spring or summer of 2013, MNsure had concerns that the Curam product wouldn’t be ACA-compliant, so Minnesota, Maryland and D.C. went to the federal government “and essentially asked the feds to really play hardball with Curam, get them to fix their product,” Todd-Malmlov said, “which the feds did.”

As a result, Todd-Malmlov said Curam made “significant” changes to its product, but as of late summer and early fall, there were still problems in tailoring the system to work with MinnesotaCare. Curam’s code wasn’t coming in fast enough, and the state was beginning to fear that there wouldn’t be enough time to test it and ensure adequate system security.

A July 29 email obtained by PIM between two MNsure staffers highlighted the problems Todd-Malmlov spoke about: “I just found out there are issues with Curam that will affect both the 834 deliver and the start of integration testing as well as the completion of [other testing],” a project manager wrote. “I’m trying to get more specifics but … at this point there is no ETA.”

Todd-Malmlov said that she, Jesson and MN.IT Commissioner Carolyn Parnell met with Gov. Mark Dayton on Sept. 19 to notify him of the delays, which increased the risk that MNsure would have difficulty going live for the beginning of the open enrollment period on Oct. 1. Dayton’s office agreed that the meeting pertained to security and website functionality.

“The impetus for the meeting was that the Curam software was taking too long to get in, and it was holding other things up,” Todd-Malmlov recalled. Of the governor, she noted, “He was extremely frustrated.” Afterward, she said, she provided updates to Dayton on a daily basis.

MNsure was able to salvage the situation by employing a patchwork of IT fixes that enabled the exchange to go live on Oct. 1 after all.

Throughout October, errors with the Curam software caused duplicate consumer applications, which made it difficult to track enrollment numbers. Eligibility determination errors also arose, which caused serious problems for Minnesotans attempting to access coverage.

Ultimately, MNsure had to re-check roughly 30,000 consumers’ applications to ensure they had gotten the right eligibility determination.

When the state was negotiating with vendors to build the exchange in 2012, Deloitte – the firm that is now taking over  – was its first choice. But Deloitte didn’t want to work with Curam unless the state took on a separate contract with the firm, Todd-Malmlov said. Deloitte also would have charged roughly $20 million extra to add Medical Assistance (Medicaid) capability.

“They were pretty adamant about not wanting to be responsible for Curam,” Todd-Malmlov said. “They wanted us to have a separate contract.”

The state ended up signing a contract with Virginia-based Maximus, Inc. in July 2012, to manage a handful of subvendors, including Curam, in building the roughly $45 million project. The Department of Human Services was interested in using Curam software because it supports all types of public programs – including food stamps and cash assistance – not just health programs, Jesson said.

“I think there was more than one vendor that had that potential,” Jesson said. “On the original contracting, decisions really came down to price, and I think that is pretty public at this point.”

The state effectively took over management of the project from Maximus in late 2012, Todd-Malmlov said, because the vendors were not working fast enough. Her explanation appears to be the first time a MNsure official has expressed any dissatisfaction with the firm’s performance.

“One of the reasons that we did that is that the project was just moving too slowly,” Todd-Malmlov said. “They were approaching it like a typical IT project… but we didn’t really have time for that. We needed to move much more quickly.”

Shortly after news reports in January 2014 revealed the contract change, exchange officials claimed the move wasn’t very significant. It later said that Maximus had been removed from the lead vendor role, a spot that Deloitte will now move in to fill.

MNsure has extended its contract with Maximus from March 31 till June 30 in order to ease the transition to a new main vendor, Bowring-McDonough said, but added that the exchange didn’t spend additional money on the move.

“We all agreed there was value in extending those contracts,” Leitz told the MNsure Legislative Oversight Committee on Wednesday. “But then [we wanted to] to use the time during that extension to really tighten up those contracts and make those much clearer with regard to what the deliverables are, when payments would be made under those deliverables, and so on.”

During the past week, DHS released a document explaining workarounds for the persisting errors in Curam’s software. “We are concerned about challenges that counties and other direct services staff are experiencing in working with the new system,” DHS said in response to a question from PIM about the severity of the issues. “The document is designed to assist county workers who may confront one of these issues as they help Minnesotans enroll through MNsure. These issues will be fixed in the future.”

Picking up the pieces

After Todd-Malmlov resigned, MNsure continued moving quickly to shore up the system for the short term. By most accounts, the exchange website’s performance improved significantly over the course of open enrollment – with the help of staffers who worked to manually process many aspects of what was supposed to be automated insurance enrollment.

Todd-Malmlov said that if she had the chance to do it over, she would have outsourced the MNsure call center, which had wait times reaching the 90-minute mark, from the outset. She said the exchange examined hiring an outside vendor to add capacity – much as MNsure eventually did in February, at a cost of up to $750,000 – but it appeared too expensive at the time.

Todd-Malmlov said she wouldn’t have hired different technology and project contractors.

“Thinking back on it, I do think we made the right decision,” she said. “I think where the problem comes in is that the vendors had a short time frame to put products together as well, and they were scrambling.”

Todd-Malmlov and Jesson also stressed that MNsure’s governing board had very little time to get up to speed before open enrollment began. Legislation authorizing the exchange was delayed, which pushed back the board getting on its feet.

“The board [took] over governance of MNsure a month before go-live. That was a very difficult situation,” said Jesson, who is also a member of the governing board.

The MNsure board has so far praised Leitz’ handling of the listing ship that he inherited. The interim CEO was unavailable for comment for this story.

Todd-Malmlov said she believes she was made a scapegoat for many of MNsure’s problems. She said that key exchange decisions were routinely made between MN.IT, MNsure and the Department of Human Services.

“After I left, I was very surprised and honestly quite saddened by the comments and the tone that people had,” she said, “particularly the distancing that people were doing from what… they knew and the decisions that we were jointly involved in. Because I think we made the right decisions, and I’m extremely proud of all the work that we did across the multiple agencies over a short period of time.”

Todd-Malmlov pointed to an interagency agreement that divvied up responsibility for MNsure’s operations between MNsure officials and the Department of Human Services.

On the question of accountability, Jesson begged to differ. “The Legislature directed that MNsure led this project, and the board delegated a lot of that day-to-day authority, most of it, to April,” she said. “Where I could, I tried to advise her, both as Human Services commissioner and as a board member, but at the end of the day it was the board’s responsibility and the board delegated the day-to-day operations to April.

“I think that’s all I’m going to say about that.”

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