healthcare.gov. those inconsistents are for citizenship status or income. the failure to calculate these property could mean that millions of americans could have to pay back incorrectly calculated subsidies. so earlier this summer it was reported that there were millions of these, first of all, how did this happen? and can't the website check for accura accuracy. >> sure. so appreciate the question. inconsistencies occur because of the changes that occur in people's lives. and people that end up having more current information than government databases, so we have run last year during open enrollment hundreds of millions of checks against government databases to check on income and citizenship status and so forth. and some occasions where people particularly are in low wage jobs, in seasonal work, and other kinds of circumstance, their income is unpredictable, or in other cases they haven't filed taxes before because they

haven't made enough money. what happens when that happens, just to give you a perspective on this, for a typical family of four there are 21 records searched through automated process. if one of those records turns there are 21 records searched through our automated process. if anyone of those records turns out to be a match because of income or some other thing, we have to pursue documentation and we do pursue documentation to try to ensure that these people are in fact telling the truth. >> how could a person be a citizen or not be a citizen? is that something you can verify? >> there is documentation status. whether it's a naturalization status and so forth, those are sometimes as current in a government database as what the individual resident has an effect on their life.

>> so an application or one application could have multiple inconsistencies? >> that is correct. >> do you have a number of how many americans were affected by this problem? >> so i think they were a couple of million people who had inconsistent information that needed to be matched of some form or another. i would say roughly half of those are income changes so these are people who will have to have, come back to the web site and we urge people to do that. make some adjustment because it will spell out on their tax form. the other half we have cleared as at july 1, 425,000 inconsistencies and greater than 90% of those are in favor of individual consumer who had more information than we did. >> this is obviously something we want to make sure doesn't continue so what assurances can you give us today that we won't see these problems in the next enrollment period?

>> i think what we are learning is a certain amount of these data discrepancy problems are going to be a fact of life because of the fact that we have people who do have high variations of their income levels so that's going to occur. it's going to be different next year. we have just now released software that allows us to get at those consistencies much more quickly. what's important though now is people we reach out to the need additional documentation from get in touch with us. >> thank you sir and i yield back. >> mr. tonko for five minutes. >> thank you mr. chair. mr. slavitt welcome and you earlier with true national stats and i received information. we have been waiting to get information and in the 20th congressional district in new york 11,000 residents who were previously uninsured now have

quality affordable health coverage because of aca. a number of uninsured residents in my district has declined by 23%. 214,000 individuals in the district including 437,000 women and 54,000 children now have health insurance that covers preventative services without any co-pays, coinsurance or deductible and 260,000 in -- now have insurance that cannot place annual lifetime limits on their coverage and up to 37,000, 37,000 children my district with pre-existing conditions can no longer be denied coverage for health insurance purposes. i think that's a tremendous bit of improvement. we obviously want to continue to grow those numbers but it's comforting to know that kind of success is coming by the way of our district. and so mr. slavitt part of the promise of creating a one-stop

marketplace is the ability to shop for health plans side-by-side and apply an apples-to-apples comparison. while federal healthcare.gov site has done a good job in this regard in displaying the premiums or deductibles of various plants and it's been more difficult to assess differences in the health plan that works on whether a particular doctor is in a network for a given plan. could you tell us what cms is doing to make it easier for consumers to access this information in advance of the upcoming open enrollment period? >> thank you congressman. you are indeed correct and in fact in the last year i believe the typical consumer had several dozen options to choose from in health insurance and our job is to try to continue to grow that but as you point out we have to make the information people are looking for more readily available or apparent or easy to see so we are asking the

insurance companies this year to put direct links to the provider directory that fits the individual plan that i would also ask consumers to do and i would ask if you talk to people in your district is that those directories the insurance companies keep are not always up-to-date. they try to keep them up today but so is good to call the insurance company or to check if there's a physician you want to see to make sure they are in a network because this is really important information for them to choose from. >> in terms of allowing poor example to search only for plants in which their doctor is covert? >> with that have that ability. that's the kind of thing that might come in future years. >> what kind of obstacles stand in a way that happening? >> you know i think one of the lessons learned from this project is to take discipline incremental steps to me can progress and not try to do too much and our schedule is pretty

much filled with things that are important to make sure we are executing well and i think those are the kinds of innovations that i could really see us getting excited about adding but it didn't make the cut this year. >> if. >> if i could just ask you a quick question about the medicare trust fund. the trustees report as you know came out on monday and talking about the friends being secured through 2013, years longer than was projected in 2009 when the aca was passed. the report noted that these changes may be due to the cost-saving provisions of the aca. do you believe that to be correct? >> i'm not going to hold myself out as an expert but it sounds logical. >> and in fact since the passage of the aca the medicare costs have grown at or near record

lows. is that correct? >> that is correct. >> so would you anticipate any continuing or additional benefits coming through medicare? >> yes, i would. >> we appreciate the leadership that you have given the aca and we thank you for the improvements and on behalf of the district that i represent the numbers are very encouragi encouraging. i share them with you this morning and we will continue to work to further improve so that one of these fundamental rights that is affordable and accessible quality health care for all with continued. with that i yield back and thank you mr. chairman. >> the gentleman's time has expired and the chair now recognizes mr. griffith for five minutes. >> thank you mr. slavitt for being here this morning and you testified you were previously employed by optim q. ssi.

is that correct and i think i heard you say in your opening statement that you left their employee three weeks ago. is that also correct? >> a little bit longer. that's correct. >> how long? >> i can get you the exact date. >> i don't need the exact date. here's the question. you now work for cms and from i understand you are a very talented individual and it's a good thing for cms by the finders did your testimony as well you indicated your previous employer is managing the web site as systems integrator. is that correct? >> that is correct. >> been a natural question is an oversight committee is how were you able to manage your former employer and doesn't this create a conflict of interest? >> thank you for the question. congressman as you know there's an ethics pledge that i signed and along with that disposed of

all of my stock basically that i had in the company. >> to be clear you disposed of all your stock? you said basically. >> all of it, yes. i wasn't trying to qualify that. >> i didn't think you were but i want to make sure on the record you got rid of all your stock. >> i got rid of all of the stock and all my ties and as was appropriate so now as a public servant i have a clear set of rules to follow. i have this ethics pledge and within that ethics pledge i have a limited waiver which allows me for the purposes of health reform implementation only on the web site to be able to interact with all be -- including optim as it fits the

implementation of the project and so i do that and exercise that very carefully and very prudently. that is publicly available waiver that i can be sure to continue if you would like. >> if you would. >> if you would that would be great and i'd like to talk about the waiver process because normally my experience when you move from the private sector to the public sector there's usually some kind of a period not dealing with your former employer, it's usually a year or more entity could explain that process how they came to this and he said it was a limited waiver. if you can explain that process i would appreciate it. >> i think it's a 15 page document and i can get you the details. >> i would appreciate that. >> two years is the waiver and i think they i think the -- i'm sorry two years is the agreement not to make it with my old employer and there's this narrow exception for interaction relative to implementation process.

>> i appreciate that. but me ask you some questions about your former employer because optim q. ssi is a subdivision or subsidiary of unitedhealth group, isn't that correct? >> that's correct and in there 417 of this year earnings call the united health care president and ceo steven j. helmsley recognized employees and said we try to move our employees around into different divisions of the company and so i'm a little concerned about how much of a firewall is built between optim qssi and unitedhealth group because unitedhealth group is participating in some of the exchanges and the federal exchange and so we have a situation where again there is an appearance of a conflict or impropriety because if you are shifting folks around as i said to one of my staffers this

morning do they have a machine like they did on men in black and they zap their memories so they remember nothing that they saw because it would appear the folks at qssi to then report to unitedhealth group and in fact larry renfro has an office, a title or hat in both companies and if that's the case aren't they able then to gain information on competitors by participating in the process in all these meetings and then get an advantage over their competitors in the health care web sites? >> let me web sites? >> let me kerfye two things. first, nobody on healthcare.gov project is permitted to go back, to go outside of the project and transfer to united health care. that's expressly prohibited. secondly just a point of clarification because it was a little confusing united health care and unitedhealth group are two different things. united health care's apparent company and has two divisions. one is called optim and what is

united health care so i don't want anybody to have the impression that optim is a part of this insurance company. it's actually a sister company is separately run and a day. >> but it's a wholly-owned subsidiary. >> correct. >> the time of the gentleman has expired. i now recognize ms. castor for five minutes. >> good morning. throughout the country everyone is seeing the benefits of the affordable air act and as of today americans are interested can access new fact sheets that provide statistics based upon each congressional district so i encourage you to go to the democratic web site and the energy and commerce committee or call your member and we can provide those. i want to share some facts about the benefits of along my florida district in the tampa bay area. there were over 24,000 individuals in my district who were previously uninsured but now have quality affordable

health coverage because of the affordable care act. the number of uninsured has declined by 15%. that could have been higher if the republica republican-controd legislature and their governor would have expanded medicaid in florida and in fact almost a million additional residents floridians could have health insurance. that's 43,000 of my neighbors in the tampa bay area who could have been covered but they remained uninsured. over 40,000 people in my district were able to purchase coverage through the new health insurance marketplace and nearly 10,000 young adults were able to retain coverage through their parents plans. 43,000 by older neighbors received medicare part d prescription drug discounts worth $8.2 million and that's a great shot in the arm and a

terrific money back into their pockets. so as we planned for the second year of opening moments we all want to make sure that we don't have the computer problems that we had last go-round so i want to ask you some questions about premiums, especially for the 2015 period. open enrollment begins in november. is that correct? >> correct. >> 15. >> november 15 so folks need to let some point, when will the web site be ready to compare plans? >> we will be sending out notices to people starting in october to come back to the web site, update their information and letting them know that on november 15 they will be able to either if they choose come back to the web site and shop for plan compare premiums and choose the plan they want or are as happens with medicare part d medicare dinner to most employers if they choose to do

nothing they will be able to automatically reenroll if their existing plan is offered. >> the deadline is in february? >> february 15. >> every 15 of 2015. republicans -- that we can now test those numbers because the new rates are rolling out across the country. are there any signs of the out-of-control rate increases that the republicans have predicted? >> so far the rate increases have been publicly available from rhode island, washington, delaware have all been in the mid-single digits. california believe has come is going to come out with their numbers today so i think that will be closely watched because of the size of the state in colorado i believe has been studied by and large. while this isn't going to beach who for every single individual and county in america by and large the early results look

very positive. >> great, and is it accurate to say there are more choices in the marketplace this go-round or will it depend upon the state? >> there will be more choices this year than last year. >> so what does competition tend to do when consumers have more choices? >> better prices, better value, better services. >> does that mean that if you have greater competition that puts pressure on the insurance companies to keep their premiums low? >> i think is one of those win-win situations where the private sector can grow by providing more value to consumers and that appears to be what's happening. >> what else, what else helps keep premiums low under the affordable care act? >> well certainly the preventive visits, the ability for people to qualify for tax credits. i think there's a whole host of

things. >> one of my favorite ones what we did in the affordable care act as the 80/20 rule the medical loss ratio that says when a consumer purchases a policy they have to get something meaningful and insurance companies can't spend too much on profits and administrative costs and when they do they have to rebate the money back to consumers and because they represent the state of florida we are really happy that our consumers are going to see $42 million back this summer. i've already heard from many of my neighbors and sometimes those rebates go back to the employers so you do need to keep an eye on it, is that right? >> i expect the numbers of a scene or something like $9 billion has been saved by consumers in the process. >> that's very important. thank you very much. >> the gentlelady's time has expired. the chair recognizes mr. johnson for five minutes.

>> thank you mr. chairman mr. slavitt it's good to see you today. umi that chances to interact before and i appreciate you being with us. i agree with mr. griffith based on your background it looks like cms is going to be the beneficiary of your experience and background. he talked about your many years in the private sector. could you give a quick summary of your years of experience and expertise in what you primarily focused on? >> sure. i started my own health information technology company back in the 90s. it was a small-business dad ended up serving consumers and i ended up selling that business. i worked with optimum for a number of years and oversaw the health information technology business and grew that, worked closely on building lots of and she wed capabilities around things like population health

management and work closely with hospitals with physician groups, with health insurance plans, state government all focused on quality issues and cost issues. >> and to summarize i think when you responded to mr. griffith's westin's view led the team that basically made healthcare.gov usable in october, correct? >> correct. >> i want to ask you, you have all of those years of experience and expertise in information technology specifically and health care arena. how much should healthcare.gov cost? >> that's a really good question and i'm not sure now being answered to it. it is not unusual for large scale projects, for example i can think of a big project for kaiser permanente when they

installed medical records cost a couple billion dollars to put in place. it's hard to know what the benchmark is to build a consumer web site and backend system that connects 250 states to medicaid plans to insurance companies so i'm not quite sure. >> let me help you little bit because i don't know if you remember not but my background is a 30-year information technology professional so i have been through the lessons learned and the trial by error of trying to project costs of complex i.t. systems like this. the gao says we spent nearly a million dollars on this -- billion dollars on this with the cost of climate. you believe taxpayers have received a good return on their investment busbar? >> congressman i think two things happened and it's hard to know which fit into each category. this is clearly needed a lot

more work than people expected. >> and so that goes back to the genesis of some of the questions we got into the last time you and i were here. if you have a firm set of requirements and if you have a systematic lifecycle design process is much easier to project those costs. i know when i was doing large-scale program management on large i.t. systems the industry general rule was in the lifecycle of a complex system that the implementation part, the design, the building, the implementation part is only about 25% of the costs, the lifecycle cost of the system. the rest of the cost is in a dense, operations and further on down the road so if this thing has are to cost the taxpayers a billion dollars or more to get to where we are today, we can reasonably expect that this is

going to cost billions more over the lifecycle, right? >> i couldn't put an estimate on that. >> but you do agree with the concept in general that maintenance and operation costs a heck of a lot more overtime than the implementation. >> i do think there will be an ongoing implementation cost. i'm off it will be greater. i will have to look at the budget request which i don't have with me. >> the budget request has nothing to do with how much it's going to cost. you understand how the industry works and you understand cycle software development. you understand that but i do appreciate -- i appreciate you don't really want to answer. gao says ultimately more money was spent to get less capability. do you agree with that? >> i think there were clear and efficiencies. >> a lot of it is still not working. >> i think they were cleared

inefficiencies and in the real world it's not always possible to know your scope going in. it's only in an ideal world where you can do think the estimates have proof they needed to do more. >> thank you mr. chairman and i agree it's not always possible to know the scope but it's possible to advance the scope and therefore knowing what you are going to pay-fors what you're going to get which is clearly know what happened here. >> please keep in the timeframe because we are expecting votes in a few minutes. >> thank you very much mr. chairman and mr. slavitt think you protest mining your work. i want to talk about some of the things that happen in kentucky since we are doing an update on very proud of the experience we have had so far in my state but there was actually some astounding news earlier this week regarding the trustees of medicare coming from the mobile prospects or viability of the medicare chosun.

are you familiar with that information? >> yes, him. >> could you tell us what happened because as i recall when we pass the affordable care act in 2010 at that time trustees were expecting the trust fund to be solvent by 2015. >> i believe if i'm not mistaken in summary the trust fund life expectancy extended to 2030. >> that's pretty astounding astounding that the end for years it extended the life of viability of 13 years and there was fascinating impressive data about if when historically they have been running somewhere between five and 10% annually. is that correct? >> that's correct. >> thank you. one of the things i know what we spent a lot of time talking about people who have signed up for insurance and private insurance under the affordable

care act but this is data that has calm about from a commissioner of medicaid and i think this is so impressive. if you look at the top map that is the 120 counties of kentucky color-coded by the amount of the percentage of uninsured citizens in those counties prior to the aca. red and orange which are most of the counties in kentucky, think although probably a dozen were rates of 17 to 20% and more than 20%. this is the bottom map the current situation and it's staggering to me that because the grain is under 11% and blues five to 8% in the dark blue less than 5%, we have counties in appalachia and southeastern kentucky they went from having the highest uninsured rate in

the state over 20% to the lowest uninsured rate under 5%. that to me is a staggering accomplishment. in kentucky we essentially have insured about half of the previously uninsured population of the commonwealth and a state that has very poor health historically and currently and people who are in desperate need of health care. what is even more important i think them out is that the report of the commissioner again medicating kentucky talked about how preventive service utilization has increased dramatically to almost 16% in annual dental visit which they were doing before, adult preventive services increasing by 7% of breast cancer screening by 20% colorectal cancer screening -- screening up by 68%. very very important health

measures that i think will pay off for the commonwealth economically but also for the life of the citizens going forward. also what is very important to note is how much reimbursements went up for providers in the commonwealth. reimbursements for those now covered under medicare expansion went up by $284 million in just the first six months of many of those hospitals and doctors and other providers who work provided with uncompensated care for kentucky residents are now being compensated and that also is a great benefit to the taxpayers and the treasure of the commonwealth so i just mentioned those because it's very clear to me that states that embrace the affordable care act and are committed to making it work are having very positive experiences. the adverse experiences are

coming in states where the administrations of those states have decided in some cases just not to participate and in another case is to try to sabotage the law so i thank you for your reporting the information brought to us today. i yield back. >> the gentlelady yields back. >> mr. slavitt earlier he made the comment because of the medical loss ratio and i think we were talking about the state of florida how much money was returned to the consumer of health insurance through the plans. let me start out by specifically asking you this because this is also been reported. if an individual and of the preceding and incorrect subsidy that they were not entitled to, what would be done to rectify this issue, specifically will they be sent additional funding if the subsidy was too low or will they need to pay back the money of the subsidy is too high

and when will consumers know if they have a government more money? >> thank you for the question congressman. and individuals have changes in there and come the best advice is they should come back to the web site and update that information so their tax credit and premium can be updated. for those adjustments that are not made when it comes to tax time they will either receive a refund or they will have additional. >> i think we need to get some specific answers on questions like that because this pay and chase model as we know in the past absolutely in regard to pay medicare claims are fraudulent and trying to get them back. are you aware that this report that came out i guess today and it states in january cms awarded a new company a contract to

continue working with federal marketplace but $91 million. gilway says the report that the cost now has ballooned to more than $175 million. is that correct? >> that is what the report says. >> in the investigation which ended a few months ago do you know if the cost, the estimated cost of 91 million that is now 175 million in the report has it gone up even further since the report? >> i think the estimate of the total contract and again this is what is being budgeted is about 170 million. >> you know that's a pretty big error, 91 million versus 175 million. how was that you can offer contract for $91 million and have it -- that much over short perry of time?

>> the proper characterization is the scope of the contract was completed after the initial contract was awarded. i wouldn't characterize the cost is ballooning. i would actually characterize it as the proper scope with the contractor determined after they got going. the reason for that if you don't mind me saying is because it essentially needed to be brought in and an urgent situation to take over for contractor that was leaving and so they agree to an initial amount and this was before my time. they agree to come back after they got started, started transition from cei and they would come to terms with how much does go but to be. >> mr. slavitt in our remaining time let me ask you to ask you you have been with cms now for three weeks? you are the number two guy, right? >> correct. >> back in 2009, 2010 timeframe when we marked up this bill a lot of us on this side of the aisle felt if the american

people were going to have this affordable care act, on affordable care act forced down their throat that members of congress and members of the the president cabinet members political appointees like yourself and career bureaucrat coming into this important position we felt pens many of the steel feel that you ought to eat your own dog food and members of congress i think it's appropriate we argue that. we had to come off the federal health plan a get on the d.c. health link and get you members of the and the president and his family really ought to be doing the same thing. i know you worked in i.t. but let's say if you work for ford motor company. would you drive a chevrolet? i kind of doubt it. i think you would probably drive a ford.

what do you think about that in these remaining few seconds? do think it would be appropriate as this show good faith to the american people that you guys and gals get a run in the show and forced to the promise would be in the same plan that the american people have to be in? >> my understanding is the president and his family are on the exchange. i don't know this for effect but that's my understanding and if it's determined the rest of the should be on exchange i would happily do that. >> if that is true please let me know and i know we are out of time and i yield back. >> the chair recognizes mr. green for five minutes. >> thank you mr. chairman to my good friend and colleague fro from -- i know calmly drive chevys but i'm also in the plant. i want to thank the chairman and ranking member and our witness for testifying. for decades the united states has had the highest rate of

uninsured in the industrial world. this puts families everest of bankruptcy when they get sick. the main reason we have a health sick system rather than a health care system because millions of americans get their needs in the emergency room. in our district before the characters in april 20000 people previously uninsured to get quality affordable coverage. overall the insurance rate in our district has fallen by 8%. 52,000 people in the district will have access to coverage if texas expanded medicaid and hopefully we will still get to that. earlier this month "new england journal of medicine" not "fox news" and left to right-wing internet site that "the new england journal of medicine" released two reports on the coverage of the aca. with continuing enrollment the numbers of americans gaining insurance for the first time are more affordable than their previous totaling tens of

billions in mr. chairman i would like to ask unanimous consent to place the article in the record. thank you. mr. slavitt are you familiar with these reports? >> yes. >> earlier this week the gallup poll released their own latest numbers on americans having insurance. are you and me with that survey? >> sim congressman. >> similar to there've been instituted in commonwealth fund conducted surveys. can you discuss that also? >> i'm familiar with the stu. >> would you agree that the findings of the gallup and "new england journal of medicine" are consistent with millions of americans signing up for health care? >> they are consistent and very encouraging. >> in keeping millions more americans from signing up for coverage in state legislators to expand medicaid. they did another 5 million americans would be eligible for insurance. mr. chairman i think the affordable care act obviously coming out of the chute it was a

problem but it's been fixed and hopefully we will see renewals but it is working although a lot of a lot of us had tough times in october in mid-november who supported it. mr. slavitt what is cms doing to address the execution of the technology lessons learned from the first enrollment? >> congressman i got to this project when it was beginning to turn around at the end of october and i think what we are doing now is essentially carrying over just as we did in the turnaround. there is no magic to it. it's basic blocking and tackling and good communication or recommendations that come out of the gao reporter making sure we have precise requirements daily management senior-level accountability that goes all the way up to the secretary he. >> i served a lot of years in

the state legislature. we should've had a texas plan that we could have done. some states had good examples of their plan and some not. could you talk about that? i know the state of maryland and some other states have problems in the welfare fixed or not but were they similar to what we had on a national scale for stacy didn't have a state plan? >> in terms of the challenges? >> yeah today on a smaller scale have the same challenges that we were? >> i think it's safe to conclude at this point towards the end of 2015 that there was the rare state and maybe kentucky is one of them that didn't underestimate how difficult this would be given all of the complexities of tying it to medicaid, tying into insurance companies offering consumer web site and the first year of any program in my experience whether it's public or private sector sometimes is bumpy. the same is going to be churned

the second year but those problems become more minor and get better all the time. >> to the best of your knowledge for example the state wanted to create their own plan now there's nothing that would prohibit them from approaching cms or hh as either that or expanding medicaid coverage? >> that's correct. >> thank you mr. chairman and i yield back my time. >> the gentleman yields back and that the chair recognizes mr. burgess for five minutes. >> thank you mr. slavitt for being here and you heard my comments about the memorandum that mr. collins suggests i might happen again i want to underscore that that's important to me and even though mr. cohen is no longer a cms i would very much like to see that. >> it's my understanding we recently sent it so if you don't receive it i will follow-up with your office and make sure that you have it. >> very well and i was just thinking a year ago really right now that your boss maryland

taffeta was here and we talked about the upcoming launch of healthcare.gov. of course it was a little less than a month after the unilateral decision by the president to delay the employer mandate. i remember asking her about what she involved in that decision and she asserted wished -- she was not a master how she felt -- found out about it and she said her chief of staff told her which i found astonishing. and if my chief of staff gave me information like that i would be curious as to where that came from but she seemed to lack curiosity about how the decision was reached. let me ask you this. we are a year later and the employer mandate was supposed to kick in a week after election day day in november. is it your understanding that the employer mandate will in fact be enacted in november or can we expect a further delay of that?

>> i'm still working my way around the federal government. my understanding and please correct me if i'm wrong is that as an irs and treasury area of responsibility so i have not been exposed to that so much yet. >> my personal belief is we will never see the employer mandate. i have no inside information obviously and i am not speaking for the committee. i'm just speaking for myself. when you look at the disruption caused in the individual market october november december of last year, and remind yourself that was only 15% of the insurance market that had that convulsion, had that happen to the large group market and small group market and individual market all at once it would have been pretty disruptive. you heard mr. gingrey talk about members of congress and members of the frustration. i agree with that in fact i did

not take the pc exchange offered to congress and staff. i said i will do what other people in my district have to do. i want to help care.governor bob of bronze plan off of the web site. the biggest mess i've been involved in my life but i finally got through and it took three and a half months to do so. now i'm wondering what my rate is going to be next year. i've got the most expensive insurance, health insurance policy i've ever had an enormous to death about what what can i look forward to in the next insurance year? you talked about you wanted a successful open in rome it. is it going to be successful? what are the rates going to look like? >> i think we are at a stage now and indeed this is one of our measurements of success is to make make sure there are enough choices in affordability and of course each state is going to their own processing going to rate reviews. we have seen some states publicly come out with their

rates. i believe rhode island, washington, california today is making an announcement on what their rates are. i couldn't tell you congressman about taxes because i don't know but generally speaking what we are seeing our rates that are not in double-digit increase levels but in the mid-single digit levels. that isn't necessarily going to be the case in every county in america but that seems to be what is happening on average. >> but still you mentioned three or 44 states and we have a long way to go before renewal rates across the country are in evidence. you are the principle deputy administrator. you have any responsibility or involvement in the renewal or their rate filings? >> i think these rate filings get reviewed and approved at the state level. there is a process and i think we are in mid-process i believe right now.

>> my time is running out out. you receive interim reports or updates on what the state filings are? >> i think there has been an initial submission and a high-level report. this is not yet final information. >> is your office going to make those rate filings public information will he have the availability to access that? >> when they become final absolutely. >> again as a healthcare.gov member from the state of texas i would very like -- very much like to know what my renewal rates are for next year. >> the time of the gentleman has expired and the chair now recognizes mrs. -- michigan house gave for five minutes. >> thank you mr. chairman. just wanted to tell you this or slavitt i don't know if your office and your position is actually in charge but we have gotten tremendous cooperation from cms when we have had constituent issues and clearly

it comes up that consumers get confused and have a lot of questions, have some problems. i get irritated sometimes on the other side. i feel like there's an embracing of these problems rather than ex-constituent service attitude to fix the problems and when we have tried we have had good success. so i just wanted to tell you i appreciate that. i also just wanted to say that the minority staff has done a district by district the benefits of the health care reform and all the districts in the country and it's just wonderful to see how the number of people in my district, 283,000 people in our district including 120,000 women now have health insurance that covers

preventive insurance without co-pays go insurance or deductibles and needless to say that is huge. up to 36 barrels and children can no longer be denied coverage by health insurers. it's just lots and lots of good news including the new medicaid enrollees. that are now being covered. i did have a question. we were talking about the states that have expanded medicaid. 26 states and the district of columbia have expanded medicaid coverage under the affordable care act and in those states medicaid is seeing great success. enrollment has increased substantially in the percentage of the population without insurance has declined dramatically. i'm asking you mr. slavitt if you have seen studies that compared the decline in the number of uninsured in the

states that did and did not expand medicaid? >> yes i have. >> can you tell me what you found? >> the states that expanded medicaid and i can get back to you on the exact figure have seen lower rates of uninsured than those states that did not expand medicaid. >> but we have seen a decline in any case. >> at decline in any case and a bigger decline in states that expanded medicaid. >> did you see the number of americans that would would receive health care coverage if all 50 states expanded medicaid? >> i believe it's an additional 5 million if i'm not mistaken. >> thank you. and if that is the case and i agree with you that it is, this is really an appalling number. 5 million americans who would receive health care coverage if republican governors and state legislators took a simple step of expanding medicaid.

mr. slavitt what about health care providers? how does the medicaid expansion helped them? >> my information is anecdotal but comparing that with the dramatic reduction or significant reduction in uncompensated care it appears that this has been a good thing for providers. >> this committee has spent the last three years looking for some affordable care act related to the scandal and despite their concerns they have systematically ignored the ongoing health care tragedy. the dereliction of duty by republican governors who refuse to expand medicaid. those who have not been following this closely the affordable care act provides 100% federal funding for the first three years to states to expand medicaid coverage to millions of low-income america

americans, right? >> that's correct. >> yet for some recent republican governors in dozens of states have refused to expand coverage to low-income individuals, correct? >> correct. >> this to me is a real scandal. expansion doesn't cost states a dime. it provides quality affordable coverage for millions of americans working hard just to get by. yet some republican governors and state legislators are deliberately refusing to provide coverage to millions of uninsured americans. mr. chairman that it seems to me is something the subcommittee really should look into and i yield back. >> the gentlelady yields that and the chair recognizes mr mr. blackburn for five minutes. >> thank you mr. chairman and thank you for being with us today. overseeing this implementation in getting to the bottom of a lot of the questions is very important and continuing to do our due diligence. i know that several people have

mentioned "the new england journal of medicine" article from last week, the health reform and changes in health insurance coverage. my friends across the aisle have been willing to tell that is something to prove their point. it's important to go and look at how the authors came to the conclusion that 5.2% more had insurance and there was a decline in those without insurance from september 2013 to january 2014 and then the authors mention the limitations of their study. they said that the study did not distinguish between persons enrolling for the first time and those who were changing their enrollment and i really wonder how many of those that had to buy more expensive policies, new policies that were obamacare compliant, how did that affect

that number and the authors measured improvement in access to care by asking two questions. first, did the survey participants identify a personal and report difficulty paying medical bills? it seems to me and more important outcome measure would be whether a person was actually able to see the doctor because in our district we hear from people who can't get access to the doctor. they have access to the queue because they have a card but they can't get access to the doctor. while my colleagues across the aisle talk about how many people have insurance i would like to remind everyone that having insurance card is not the same as having medical care. i continue to hear from people in tennessee who lost their health plan. they can't keep it. i hear from people who have not been able to keep their doctor

because of the narrow networks in obamacare. i hear from people who go to the doctor doctor and need doctor and needed test but can't get the tests because of their co-pays and their co-insurance are too high. they can't afford it. this stuff is too expensive to afford and finally we are hearing from some of our tennessee insurance carriers they are going to a 19% increase in the health insurance premiums in 2015. it's kind of like adding insult to injury. you've got this stuff. you can't use it because it's too expensive to afford. the co-pays are too high. you have an insurance card but you can't get into see the doctor and i don't understand why my colleagues across the aisle continue to defend this thing. today we are shifting our focus to oversight and away taxpayer dollars and i remind everyone taxpayer dollars are paying for this and the people don't like it. on january 1, 2014 hhs certified

to congress the american health benefit exchanges in the marketplace for verifying their their applicants were dance payments of the tax credits cost-sharing reductions were eligible however the gao secret shopper investigation found 11 out of 12 secret shoppers were able to obtain health insurance and qualify for premium tax using fictitious identities and fraudulent -- for the benefit of my college for me talk about what the secret shopper program does. when i had my marketing business we would run secret shopper programs at malls and shopping centers and chambers of commerce. you identify where your problems are and then you get in there and clean them up. the problem is the system allows fraud. if you have god 11 out of 12 that something is wrong

mr. slavitt that is a failing grade. there have been over 30 delays in implementation. the president has made multiple unilateral changes and you know we are here to learn about the contracting practices that took place at cms with a botched implementation of this law. we are looking at the gao study. this thing is not much better. let's talk about this contract. january cms reported a contract to a new company to continue work on the federal marketplace. it was a 91 million-dollar contract, correct? >> correct. >> now gao says the cost has ballooned to more than $175 million. is that correct? >> that is what the report says. i don't agree with that characterization but that is what the report says. >> thank you. i will submit the resume questions and i yield back.

>> now we will go through ms. ellmers questions and then take a break and come back for the second part. ms. ellmers you are recognized for five minutes. >> thank you mr. chairman and thank you for being with us mr. slavitt. i would like to go back a little bit of the discussion you had with my colleague from ohio mr. johnson. i know you made comments there at the end for you pointed out that in the real world and things are much more realistic and ideologically many times things seem like they are going to bid -- be better than they are. i would say to you sir that is exactly why i am running for office and being a nurse because i did see in my husband as the doctor saw that the plan that was going forward was not going to be realistic. i think we have learned over time that is the case. there were many promises made

that have not been kept. well-intended, but not true for the american people. so i do again, i share with you that same sentiment and realize too but that is why we feel so strongly about this issue that the american people do need to see what can be realistic and achieved in good health care in this country and good health care coverage. you did also have an exchange with mr. johnson on the cost of healthcare.gov. and what it should have caused. you reluctantly did not answer the question of the costs being as billion dollars. it's a billion dollars too much for the implementation thus far? >> thank you, sherman. i've not seen the study yet which looks at what the appropriate cost for building the entire healthcare.gov system would be but i know it's that her colleagues at the gao pointed out there were

absolutely and efficiencies in the way the contract was managed with the very least we know there were some. i would hesitate to say though that it's entirely a waste because there was a really significant set of systems built and i think those systems have significant long-term value for the country. >> you know there again it gets back to that same issue of what is realistic and what is achievable and simply throwing money at it and then looking back in hindsight to determine what did work and didn't i think we are all learning from experience so that of course has value. i don't know how you measure it by the american taxpayers are still on the hook for this area that is again why we are taking the approach we are which is what is it going to be enough? when are we going to achieve the goals and a cost-effective measure? i want to look into some of the issues with security breaches.

are you aware at this time if any problems on the web site from the building of the web site and there are still concerns? are you aware of any right now? >> there have been no successful malicious attacks and to the best of my knowledge no data has ever been compromised from the healthcare.gov web site. >> to the best of your knowledge and just based on the answer that you gave you are not seeing that there were any related information breaches at healthcare.gov are traveling to the federal exchanges that you would consider security breach? >> we have not seen any malicious attacks that have been successful and we have not seen anybody's personal information in any way compromise. >> what is the definition of a successful breach? >> i'm not trying to be cagey but other than to say that

nobody has successfully penetrated the security system to the best of my knowledge. >> are you aware of any companies building operating or otherwise working on federal exchanges obtaining access to information that they should not have? anyone who is outside of the system or working on it that have? >> not to my knowledge. .. uous monitoring and makes changes and puts in new patches as different security things are found out about in the industry and so forth. it is continuous monitoring. >> can we obtain that information over time, any of the changes and updates that may

have taken place for the committee? >> sure. let me figure out way can share. i don't want all the things our security team does to be well understood by the wrong people, but i want to make sure you get the information you need. >> thank you, mr. chairman. i yield back. >> they called votes. mr. slavitt, thank you for your testimony. members will have days to get questions to you. we appreciate a quick and honest response. >> mr. chairman, can i move to strike the last word briefly? i judge just want to, dr. burgess mentioned earlier hhs didn't respond to the committee's request for an analysis of its legal authority to make payments with the risk program. i've just been told hhs did respond to the request and provided a response to the committee on june 18th, 2014. in the response they also included a legal analysis. i wanted to clarify the record. i wanted to also make sure that if dr. burgess or you or the

committee staff did not receive that, we will get another copy to you. >> dr. burgess? >> in fact, i did not receive it, but would be anxious to look at it as and see if it answers the question as was asked. mr. chairman, if i could have the indulgence of a brief follow-up. >> real brief. >> when this thing went live the back end part of the system was not built. is it built and available and ready to use? the part that pays providers? >> the part that pays the issuers, the issuers are getting paid today. >> doctors and hospitals? >> they get paid by the health plans, not by the marketplace. >> the back end part of the system is up and fully functional? >> no the back end part of the system is going through continuous releases. today we are paying the issuers on an estimated basis that would be a coming release this year where by the end of this year

they'll begin to get paid and a policy level basis and next year continued automation will occur to tie everything to do with the back end of cms' systems. >> have the right people been paid the right amount of money? these are taxpayer dollars. >> we'll follow up with questions. we'll probably reconvene. our vot government accountability office. he provides overall direction for gao's review of contracting

activities at defense and civilian agencies. you are aware the committee is holding an investigative hearing and has the practice of taking testimony under oath. do you have any objections? >> none whatsoever. >> the chair advises you under the rulings of the house, the rules of committee you are entitled to be advised by counsel. do you desire to be advised by counsel during your testimony today? >> no, i do not. >> in that case please rise, raise your right hand. do you swear the testimony you're about to give is the truth, the whole truth and nothing but the truth. >> yes, sir. >> i are under oath and subject to the united states code. you may give a five-minute summary of your written statement. >> thank you, mr. chairman. ranking member toget it's a pleasure to talk to but healthcare.gov and the work we've done looking into that

system. when the website was launched in october of last year, there were, of course, a number of problems. we got a lot of requests from the congress to review what happened and why. those requests came from both the house and the senate, from both sides of the aisle. we got requests from committee chairs, from ranking members congressmen, across the board. and what we decided to do was to combine all of those requests and conduct a body of work that addressed all of the issues that were raised in those various requests. we have a number of engamingments undengamingment engagements under way to address the issues. one we'll be talking about today is contracts but let me mention we have one that is nearing

completion on privacy and security concerns with respect to the website. we also have a report that is on track for issuance later this year on information technology management. that report will look at the use of best practices in the development of this information technology system. but i'm going to be talking today about our first report that was issued, publicly released yesterday, that is on the contracting aspects of healthcare.gov, and i'm going to be talking about our three objectives. the first thing we reviewed was the acquisition planning by cms for the website. secondly, we looked at the oversight of cost, schedule, and performance of that system, and then thirdly, we looked at a range of contractor performance issues with respect to

healthcare.gov. we focused on the largest task orders and contracts that were involved here. our report mentions that cms had spent about $840 million for development of the system, and that was through march. obviously the spending has continued and that number is likely higher today, but as of the time that we completed our work, it was $840 million. and we focused on the largest. we reviewed in-depth two task orders, and one contract. just briefly, those task orders are one two, first to cgi federal for development of the federally if facilitated marketplace. that's basically the website itself as well as some back office systems that support the

enrollment process, the financial management process, planned management, et cetera. we also looked at a task order awarded to qssi, and that's for the data hub. the data hub is a system that interfaces with other agencies. there are roles that other federal agencies need to play to make this system work, the internal revenue service, the department of homeland security to verify immigration status, et cetera, so lots of agencies have a role here, and the hub data system is that system that allows for communication among all of those agencies. and then the third contract that we looked at is one with accenture. that was awarded on a sole source basis in january of this year for continued development of that federally facilitated marketplace.

before i get to our specific findings, i just wanted to make an observation that there really are some common threads that run through all of the work that we did here, and those threads are first of all complexity. this was an enormously complex undertaking. as i said, there were lots of federal agencies involved, a number of states involved, industry partners, health care plans, lots of players. there were also lots of systems that had to interact with each other and that added to the complexity. another thread that runs through and you'll see that when we get to the findings in a moment, is the pressure of deadlines, that the affordable care act itself set january 1st, 2014, as the

date when the enrollment took effect, the department of health and human services backed up from that january deadline, and set an october 1st, 2013, time for when the system needed to be ready to go when they could throw the switch, the goal live date, that sort of thing, they needed to have things in place by october 1st of 2013, and that drove a lot of the decisions that were made by cms. and then the third thread that runs through all of our findings is the changing requirements. things were constantly evolving, which made it difficult not only for cms personnel to keep things on track, but also for the contractors to keep up with those changes. some of those were anticipated changes, things they knew going in. they did not yet know but others

were, they were learning as they went along. let me get into the specific findings in the three areas that i mentioned. in the area of -- >> could you summarize, because you're already a couple minutes over. we want to ask you a number of questions so if you could summarize your final findings. >> sure. in the area of planning, our bottom line assessment is simple yet sobering, and that is that cms began and undertook the development the the healthcare.gov system without adequate planning, despite facing a number of challenges that increased both the level of risk and the need for oversight. in the oversight area, we saw increasing costs across the instruments that we looked at,

both of the task orders experienced, cost increases, and the new contract awarded to accenture also saw cost increases. those cost increases were due to a number of factors, as i said, some requirements were unknown at the time they awarded these instruments, when those costs became known, when those requirements became known, the costs increased. the cost schedule and performance issues were exacerbated by inconsistent and sometimes absent oversight, and then in the third area, about contracting performance, we saw primarily in the cgi federal task order an increasing sense of frustration on the part of cms of the contractor's inability to be able to comply

with contract requirements and meet deliverable schedules. that frustration grew to the point where they decided not to renew the contract with cgi and instead to move to a different solution, which is to award the contract to accenture. so those were our three findings. we have a series of recommendations to address some of the issues and i'd be delighted to get into the specifics of that as the hearing moves forward. >> thank you, mr. woods. we appreciate your thoroughness and your candor in this. as you described things like inconsistent or absent oversight, you said oversight weaknesses, a lack of adherence to planning requirements, compounded by acquisition planning challenges, and when mr. slavitis testified earlier, fortunately or unfortunately the ga report wasn't news.

as you're going through this, with regard to the oversight, did people within cms know these problems were brewing? >> we saw some indication that the problems were known, particularly with the cgi issue that i mentioned earlier. that was well documented what their concerns were. other aspects, though, mr. chairman, were not quite as visible, and let me point out one area. we found a number of instances and our accoucount was about 40 where changes were being made to the contract requirements at the direction of people that did not have the authority to do that. >> within cms? >> within cms. these were largely -- >> when you say did not have the authority, did you mean they had not discussed with mr. cohen or miss tavener?

>> well the only person within cms has that the authority to change the can are the in a manner that increases the government's obligations is the contracting officer. >> who was? >> i'm sorry? >> and who was that? >> i don't have the name right at my fingertips. >> what i'm wondering here is, do you know if -- so the problems with the website, it took longer to develop it, the security was under question, people had problems signing up, and with inconsistent or absent oversight so i'm wondering in some cases you're saying there was actions taken without authorization, several dozen of these i believe that's documented. so people were making change orders and that was leading to some problems, but there was also absent oversight, so some people in charge were not meeting, were not paying attention, were not monitoring this contract, or they were monitoring some things and making the wrong decisions. was it both or one or the other? >> a combination of things. there are a number of people

with different roles to play, as i mentioned there's the contracting officer, but there was also on the program side a governance board review process, and that process was designed to provide high level management oversight, and what we found there was that that process simply did not work as intended. >> now we also had heard that there was a mckenzie report commissioned by then secretary sebelius which made it pretty clear they weren't going to meet their deadlines. did they know within cms these deadlines couldn't be met and that under the pressures which you had listed such as the january 1 deadline or the complexity of this, did they know this really wasn't ready for prime time? >> we found some indication in the files that we reviewed that,

in the springtime frame, the spring of 2013 that estimates were made the federally facilitated marketplace would only be 65% complete by the october 1st deadline. >> so they knew then in the spring. did they know that in august and september? >> there was the state of knowledge continued to progress from the spring through the end of the summer, and they became increasingly concerned that the deadline would not be met. one of the principal oversight functions and processes that we saw and that we were very concerned about is there was supposed to be, according to the original schedule, an operational readiness review conducted in the spring of 2013. that operational readiness review was moved from the spring to the fall, to september of 2013, just weeks before --

>> when they did that review, did they know it wasn't going to work? >> well, as i said, there was some indication in the files that they thought only 65% complete. >> so when -- >> the purpose of that operational readiness review is to either confirm that the system will work or find out what's wrong. so there's enough time to fix it. >> when miss tavener or mr. cohen came before this committee within days of the launch and said everything would be fine by october 1, what you're saying to this committee is, there was ample evidence to say that was not true? >> we saw some indication that there was progressively increasing knowledge that there were problems in meeting that launch date. >> and did mr. cohen know that? >> i don't know that. >> but either through lack of oversight, he should have known it, or he knew it and reported this committee under oath that

everything was fine on august 1, it was going to be ready for launch. what you're telling us is there's ample evidence in what's reviewed that people within hhs knew it was not ready and people under oath told this committee something entirely different. >> i don't know what specific individuals knew or did not know, but we saw evidence in the files that we reviewed that there was knowledge within the agency that the operational readiness was in jeopardy. >> thank you. i'm over time. >> this is an important issue. so you're saying people within the agency knew that the website was not ready, correct? yes or no. >> we saw -- >> you saw it that people -- do you think that people in the agency knew that the website would collapse on october 1st? yes or no. >> i can't speak to that. >> you don't have any, do you

have indication from the files that people in the agency knew that the website would not work on october 1st? >> yes, we saw that, yes. >> can you produce that to this committee, please? >> there was a series -- >> no, can you produce it? >> absolutely ma'am, yes. >> thank you. my next question because miss tavener and mr. cohen did come in and testify under oath several days before as the chairman has said that the website would work. do you have evidence in your files that miss cohen or miss tavener knew this website would not work? yes or no. >> no, i can not speak to the knowledge of any individual. >> in your opening statement you talked about some provisions the gao was coming up with to strengthen the website for some recommendations for privacy and security concerns. is that correct? >> well, this particular report that we're speaking to today, just deals with the contract. >> right, but you talked about -- >> not for security and privacy.

>> okay so you're not looking at privacy and security? >> other teams within gao are looking at and that work -- >> are you aware of any security breaches in the websites? yes or no. >> no, i am not. >> okay. now the gao made five recommendations you referenced in your opening statement, to cms to avoid the mistakes that you had identified. is that correct? >> yes. >> and i just want to go through those recommendations, because you said we should, and i think it's important to know. the recommendations i think are good recommendations, but they're a little vague, and so i'm going to ask you about each one of them, if you have specific details, but then also i'm going to ask you, mr. woods, to supplement your testimony and provide to this committee and to cms specific details on each one of them, because i think it's important for the kcms to actually be able to implement

these recommendations and our last witness said he agreed with the recommendations and he did want to implement them. the first recommendation is that cms should take steps to assess the causes of the increase in costs of the continued development of healthcare.gov, and the delays and functionality of the website, and develop a plan to mitigate those costs and delays. can you briefly give us a little more detail on what steps the gao believes cms should take to make those assessments? >> certainly. we did see cost increases in the accenture contract, the current contract. >> what steps do you think cms can take to rectify these problems? >> we think that they need to step back and identify the causes, the reasons why costs continued to increase in that particular contract. >> okay, and do you have any thoughts what should be included in a mitigation plan?

>> they need to make sure that costs are under control and that the schedule can be met. >> yes, i think those two things are key. now the next thing the gao recommends is that quality assurance surveillance plans and other oversight documents are collected and used to monitor contract performance. how can those documents be effectively used to monitor performance? >> the quality assurance surveillance plan is a standard document that's required in most efforts of this size that provides a road map for how the agency, any agency is going to oversee the contractor's performance. >> right, does the gao have thoughts on how it can be used to do that? >> yes. >> okay, if you can give us that information, that would be great. i want to go through your other recommendations. >> certainly. >> briefly, while i still have time. the gao also recommends that kr

cms formalize existing guidance of responsibilities of personnel assigned oversight duties. the roles and responsibilities were spelled out in some way. how would formalizing existing guidance prevent confusion about the responsibilities and authority going forward? >> this gets to the issue of unauthorized individuals making changes. >> okay, great. >> and when they learned of that, there was internal guidance provided to all of the people, but that has not been institutionalized. it has not been made part of the permanent guidance at -- >> okay so they already have a way they're doing it, that just needs to be formalized. >> it needs to take the next step. >> the next thing you recommend giving staff direction on acquisition strategies, and developing a process to ensure that acquisition strategies are completed on time. can you flesh that out a little bit for us? >> that was a very important deficiency that we identified. >> yes. >> is that there were a number

of steps that cms took to expedite the rollout of this healthcare.gov, but each of those individual steps added risk to the process, and the purpose of the plan or the acquisition strategy is to first of all identify those risks, to be able to come up with a plan to address them, and we found that that acquisition strategy was not prepared. >> so does gao have some ideas what this process could look like if it done appropriately? >> the process is already in place. >> okay. >> the regulations at hhs are very clear. in kt ffact there's a template. it wasn't done in this specific case. >> they need to follow the existing regs. >> exactly. >> perfect. last, you recommended ensuring information technology projects adhere to the requirements for governance board approvals before proceeding with development. what exactly does that mean? what governing board are you referring to?

what are the requirements, and why did the board approval process fail the first time around with healthcare.gov? >> the agency had a system in place that provided for an oversight board to review the progress of the system. the problem that we found is that those governance board meetings were held with incomplete information and that decisions were not made as we would have expected to either approve, disapprove or make modifications. >> so what you're saying is once again, this was a failure to follow the existing rules that they had. >> there was a process in place that did not follow. >> thanks for your indulgence. >> north carolina for five minutes. >> thank you, mr. chairman. thank you, mr. woods, for being with us today. as i'm sitting here listening to your report findings, i am incredibly amazed by the

inefficiency that went forward with a plan of action that was in place, and i keep coming up with the same question of why. why were these steps taken? why was action taken the way that it was? why were there unauthorized individuals making decisions. i think one of the most glaring questions that i have based on your findings is that, and you use the word, that they expedite, they took measures to expedite the rollout, that that added risk, obviously, and it was a failed strategy essentially. why, in your opinion, based on your findings, did they stay with that october 1st rollout date, when they knew based on what i'm listening to, that it was not going to be accurate and

successful and that it would be a failure? >> well, the law itself, the affordable care act set a hard deadline of january 1st, 2014, and they needed to have some period where consumers could determine their eligibility, look at plan availability, and make decisions about what plans they wanted to choose by that january 1st date. >> so they stuck with the october 1st date, knowing that their time was running out, and that they -- so now this is me just again trying to process why they would go forward with something that obviously was not put together well and steps were taken, it wasn't an efficient system and yet they were moving forward, so based on your knowledge, they had to go forward with that october 1st date, so that they could have the enrollee numbers that they were looking for by january 1st.

regardless of the fact that it wasn't going to work? >> that's been cms's position is they needed to stick with that october 1st. >> they had to stick to that date because they needed those numbers of individuals signing up essentially. yes? >> well, they needed to comply, to have a system in place by october 1st, by january 1st in order to comply with the affordable care act. >> okay. so i'm going to go back to some of the questions also on the tech surge, when the tech surge was implemented. to the best of our knowledge and based on the report findings, we understand there was a tech surge in october to fix the site after healthcare.gov's failed october 1st launch. based on your investigation, what actions did cms take in october to fix the site?

>> in october, they continued to work with cgi federal, but the level of frustration reached the point in november of 2013, where they sent yet another letter detailing the shortcomings of the contractor, asking for corrective action plan. cgi responded to that and clearly disagreed with cms's assessment at that point. >> okay, so they were disagreeing with it. there were other contractors involved, too, is that correct? >> there were many other contractors involved, right. >> but particularly it was cgi that, where the frustration was, where the disconnect was. >> they were responsible for the heart of the system, if you will. >> okay. >> and that's where most of the dollars were in terms of contract expenditures.

>> so to that point based on the fact that cgi was the main contractor for that, were there other contracts, was their contract extended? were there any new issued contracts based on the frustration that cms had? >> the cgi contract had been extended earlier until february of 2014. >> and that was before october 1st? >> i believe that was before. >> it was already extended before october 1 as soon as. >> that's correct. >> okay, so then to that point, were there any other, again, getting back to this, were there any other contractors that were selected knowing cgi was not doing necessarily what was necessary for the repair of the website? >> the only contract that i'm aware of is the new one to

accenture to continue with development of the federally facilitated marketplace. >> and can you refresh my memory on when that actually took place, when the new contract went forward? >> that was january of 2014. >> that was january, okay. okay. well, mr. speaker or excuse me, sorry, mr. chairman, i have gone over on my time and i apologize. thank you, thank you mr. woods. >> thank you. now going to recognize the gentleman from virginia, mr. griffith, for five minutes. >> thank you so much for being here today. i appreciate it very much. the report indicates that cms did not engage in effective planning or oversight. what do you recommend they do in the future to make sure they have proper planning jeempb sight? because they apparently dropped the ball. >> they have the tools in place. >> okay.

>> one of the primary tools is a strategic plan, an acquisition strategy is what it's called. there's actually a template in the hhs regulations for each of the areas that needs to be addressed, and fundamentally, it's a tool designed to identify the risks that the agency is undertaking and to be able to come up with a plan to be able to mitigate those risks, but they did not follow it. so the tools are there, they did not use the tools that were there. >> i want to ask you an open-ended question because i think it's important that we get this perspective from time to time, and that would be out of the report what have with he not asked you about that we probably should have asked you about or the people watching this at home, something they ought to know about your report that you haven't already covered in your testimony here today? >> one thing that comes to mind is the next enrollment period. i think people are wondering are

we going to experience similar problems or are we in better shape. that's why we have one of our recommendations that's focused on the current contract with accenture, where we've seen some cost growth, and we think the agency needs to make an assessment of why that cost growth has occurred, whether they are in fact on schedule and whether there are any risks to the 2015 enrollment period. >> my hearing is not as good as it should be. you're talking about the cost growth? what was that phrase you used? >> cost increases. >> okay. >> and we have somewhat of a disagreement with the agency about the term cost growth, and that's why i'm reluctant to use it. their position is that any cost increase since about april of this year is totally based on new requirements. so it's unfair to call that cost growth. our position is that when you

look before that, when they initially awarded that contract at an estimated value of $91 million, and now it's at 175, that the agency needs to make an assessment about why that, why those costs increased from the 91 to 9the 175, and that is not the end of it. there are, that contract continues in place today. our numbers are dated in terms of, you know, we completed our audit work a couple of months ago, so costs on that particular contract are almost certainly higher today than they were at the time that we completed our audit work. we think the agency needs to make an assessment about why costs continue to grow. >> well i think they do as well, and i appreciate you raising that point, and it's kind of interesting that it would seem to me some of those new

requirements are probably because it didn't work the first time around. wouldn't you agree? >> there are enhancements to this system. they're constantly changing and trying to make improvements to the system. the ones early on i think you're right, that those are related to the inability of the system to function as intended originally, but the agency tells us that the more recent cost increases are due to enhancements. >> all right. well i appreciate that, and i appreciate your testimony here today, and i'm happy to yield my last 55 seconds to whomever might want it. >> i will, thank you. thank you. i do have one follow-up question, and it has to do with the conversation you were just having with my colleague. when we're talking about the cost increases, you had mentioned the enhancements are what has been cited as the

reasoning. my question for you is did cms get congressional approval for the additional funding or spending i guess i should say? >> i'm not aware of what that process was at all. >> so to your knowledge, based on the report, you did not see any effort put forward to come to congress for additional funding for spending? >> i can't speak to that. we didn't see it, but that wasn't part of our review. >> okay. thank you, mr. woods, and thank you to my colleague for yielding. >> thank you. i'm going to do a second round with ms. dagett and i. follow-up here. are you saying that cms is not analyzing why the contract with accenture is growing in cost? >> we don't think that they have done that fully yet. >> this original contract which was a cost plus contract, who signed that contract? who is responsible for that? >> those contracts are signed by

the contracting officer, and as i said, i don't have that name. >> those have to be approved by mr. cohen or miss tavener in the chain? >> i don't know. >> is that something your study encompassed to find that paper trail or look at that? >> we did not review that, no. >> let me ask you, too, you talk about the pressure of deadlines, january 1, 2014, but a number of delays were put into place, employer mandate, or the retirement issue, enforcement of canceled plans, individual mandate to the shop plan. should the rollout have been delayed as well? >> i'm not sure about that but your observation about delays is accurate, when they realize that they would not be able to be fully functional by october 1st, they did make some tradeoffs, and pushed projects that they thought they were initially going to be able to complete by

october 1st, pushed that off into the future, and the small business program that you mentioned is one of them. the financial management module was also pushed off until a later date. >> but none of those delays caused a delay on the website. none of those -- many of those things i mentioned, they didn't cause a delay in the website readiness. these several dozen other changes internally which were one of the factors in the delay, in the website readiness, though, am i correct? >> well, the website was launched, i'm not sure -- >> but you had said a number of decisions made during i guess it was 2013 to 2012 were part of the complexity. one there wasn't proper oversight of the contract and second a number of internal changes were made by someone who didn't have the authority to make those changes. >> that's correct. >> so do you know or can you find out for us in terms of someone making these changes, who approved the decision for

them to make these changes, or who gave that person the authority to be in that position to make those changes? do you have that information? >> there are a number of people working with the contractors on a day-to-day basis, and the 40 instances of changes or direction to the contract was made by multiple individuals. some of these were technical people, as i said, working side by side with the contractor, some of them more and more senior officials. all of the changes, though, ultimately, were ratified by the person with authority to do that, and that is the contracting officer. >> but what did it go to the level of miss tavener or mr. cohen? >> i don't know. >> is that something your records to review? we need to know if your records show or if you can find out for us. you have an excellent investigation but it's very important to know this, if they knew or should have known in

terms of approving these changes or being aware that the website wasn't ready or, well, let me ask that part. do you have any information on those? >> well, as i said, we'll certainly review our materials and provide an answer to that question. >> because it comes to this point, this committee, members of each side of the aisle have different points with issues with regard to health care reform. that's fine, part of what makes our nation great, people have differences of opinion, they move forward on that. there are certain standards within a committee that i think she with you be unified in understanding that if someone comes before the committee under oath and claims that something is ready to roll on october 1, thatter should be able to sign up, knowing full well that it's not, it's either incompetence, it's dereliction of duty, it's sloppiness, it's lack of supervision oversight or it's

perjury to this committee, perjury in terms of making a claim they know is not true or making a claim they have no business of making. the only answers to questions like this is the website ready october 1 is yes, no, or i don't know. anything beyond that, when the claim was made by mr. cohen to this committee under oath that october 1 everybody would be ready to sign up, it's clear from your investigation and your testimony that people within the agencies knew it was not ready. so any information you could provide us that tells us if they knew and made false claims as committee or if they didn't know and made false claims to the committee it's important for the integrity of this committee to let us know, and if you could submit those, that information to this committee, i'd be grateful, your paper and other reviews. miss dagett recognized for five minutes. >> thank you very much mr. chairman and mr. woods, i can understand why the chairman is concerned about this, based on your testimony today, so i want you to think very clearly about what your investigation found, and what you have testified to

this committee today when i ask you these questions. because i don't want the record to be confused, and i don't want a misimpression to be left. are you aware of either miss tavener or mr. cohen coming before this committee and lying about whether they knew the website was not ready. >> no, i cannot speak to that. i don't know. >> you don't know. do you know mr. miss tavener or mr. cohen personally knew the website was not ready? >> i do not know. >> you don't no he that. do you know whether miss tavener or mr. cohen specifically approved those changes? >> no, i do not know. >> you don't no he thknow that ? >> no. >> do you know who within the agency did approve those changes? >> ultimately those changes were ratified and approved by the

contracting officer. >> the contracting officer so you could give us that information through that list? >> absolutely. >> thank you. i just think, and i know the chairman agrees, we don't want to loosely be throwing around allegations of perjury or anything else, when we -- we don't want to put words in your mouth either so i think we're clear on that. there's one more thing i wanted to clarify about your testimony today. your first recommendation that, in your report on this topic, as we discussed, was take immediate steps to assess the causes of continued ffm cost growth and delayed system functionality and develop a mitigation plan designed to ensure timely and successful system performance. is that right? >> that's correct. >> and that's the one you're concerned about cms following as they look at the implementation of the 2015 program, is that

correct? >> the effort that's under way by accenture is to move the development forward to be ready for --? right. >> -- the 2015. >> and that relates to that recommendation? >> yes, it does, we -- >> and huh? >> we think that cms needs to make that assessment in order to ensure itself -- >> right. >> -- it's on track for that enrollment period. >> for next year? >> right. >> now, you were sitting here i believe when we heard the testimony of the previous witness. is that correct? >> yes, i was. >> mr. slavitt. and i specifically asked mr. slavitt if he had reviewed the five recommendations gao had made. do you remember hearing that? >> yes. >> and do you remember hearing mr. slavitt say that cms agrees with all five of the recommendations? do you remember hearing that? >> i remember hearing that, yes. >> so i would just, i would just, you know, sometimes i like to have both the agency witness and the gao, so that they can

answer each other's issues, but i just want the record to be clear that mr. slavitt has said that they recognize this recommendation, they intend to comply with it and i think mr. chairman we should follow up and make sure that happens. thank you, i yield back the balance of my time. >> i recognize dr. burns for five minutes. >> thank you, mr. chair opinion. mr. woods, thank you for being here and i commend the general accountability office on great work. this has not been easy and i appreciate how difficult it's been to be here today and i appreciate your forbearance. along the lines of what miss dagette was just asking you, do you know whether or not the center for medicare and medicaid services is adopting your recommendations right now? >> what they told us is that they fully agreed with four of our recommendations, and they partially concurred with our fifth recommendation. >> have you any evidence that you can point to that shows

that, in fact, they are taking steps to comply with four of those recommendations? >> we've seen some indication. >> you have their assurances but is there anything that you can point to in data, in fact, that they are taking those recommendations? >> what they told us is, what they told us is they are providing additional training in certain areas that they plan to implement those recommendations, we're hopeful that they do. we have a normal regular process for following up with agencies to make sure that if they tell us that they're going to implement recommendations, that they, in fact, do so. so that process will continue at gao. >> i look forward to the follow-up hearing we have about that implementation. now, you know, a lot was written in august of 2012 about the lack -- cns's or hms's lack of production on rule-making as it related to the essential health

benef benefit.s's or hms's lack of production on rule-making as it related to the essential health benefit.ms's or hms's lack of production on rule-making as it related to the essential health benefit. in fact that rule-making was delayed, the rule actually came out about a week after election day that year. i don't know if you recall that. in your work, was there any evidence that that delay was politically motivated or am i just being overly sensitive and overly cynical by the rule coming out a few days after election day 2012? >> we found no indication of that, sir. >> so your inference is i'm being overly cynical? >> we can't -- we found nothing to -- >> let me point out to shayou, s came up several times today. mr. cohen was here i think it was about 10 or 11 days before october 1st, and i asked him a very direct, very specific question. in fact, i tried to do what john dingell said, yes or no, the website will be ready on october 1st. he gave me what i presume to have been a well-rehearsed and studied answer, because he

repeated it verbatim twice, and it essentially said on october 1st, consumers will be able to go online, see premium net of subsidy, and make their purchase. now as we know, that didn't actually turn out to be the case. so it is a valid question to ask. he must have known that ten days before the launch date, because it sounds like from your report that it was pretty clear that things weren't going well. am i wrong about that? >> i simply can't speak to what he knew or didn't know at any particular point in time, but i can say that we found indications in the documents that we reviewed that the system was projected to be only 65% wa only 65% complete by that october 1st deadline.

>> if you had been asked that question and answered it unoath, would you have answered it the same way mr. coen did? >> i can't -- >> you have written in your report october 21st deadline for establishing enrollment through the website, cms identified significant performance issues involving ffm, facilitated federal marketplace contractor but the agency took over only limited steps. can you provide for the committee what correspondence, evidence relied on to make that statement? >> absolutely. we can summarize what led us that conclusion and we'd be happy to do that. >> as a part of making that statement, did you have access to internal e-mails within the center for consumer information and insurance oversight and cms? >> we reviewed lots of do you mean, contract documents, e-mails, memos. so we had very good access to

cms. >> i would ask that be made available to the committee, transcripts, make it available to the subcommittee. >> i believe we already have that information in the subcommittee. >> lets find out. >> it's been produced already. >> again, i would ask we be certain you have the information the committee asked for. >> we'd be happy to work on t t that. >> let me ask you, open enrollment is going to be shorter than last time. in your opinion, are they going to be ready for second open enrollment period? >> i'm not in a position to make that judgment. that's why we had the recommendation we did is that we think cms needs to make that assessment of cost and schedule

to make sure that they are on track. >> we said in the record that's the risk, some impact on the 2015 enrollment period and that's why we had the recommendation we did. >> thank you for you answers. thank you for being here. >> without objection the documents entered in the record. thank you for your thorough and candid report. all this committee requests is honestness, thoroughness and reputation of organization is based on that ability to honor and thoroughly provide to a candid world. we appreciate that members have skefrl questions for follow-up. we ask that you respond to that in a quick manner. we also ask your commitment, majority and machine ort staffs

so they can revee and ge get details. participate in the hearing, remind members 10 business days to submit questions for the record. with that i adjourn this hearing. thank you.