better place but quite frankly at times how could you take this when the turkish pregnant mr. is a guiding israel to being the '90s and put that forward to the cabinet not even to consult egypt who is a real player in this that is a mistake that we all make mistakes. the question is have we heard from it. we are back on track now but this latest episode, look what we do when our soldiers are captured. we want to get them all back and there's got to be a balance. israel will clean out a jail and

released a thousand people to get a soldier back they will do more, too than they go the other way this time. my point is yesterday or this morning was a turning point in the war and america needs to be in their camp and john kerry, president obama and every member of congress needs to knock off urging israel to be more cautious when their entire state of the nation is at risk. they are cautious. hamas is not a. u.s. employers extended the high hearing search into july by adding a solid 209,000 jobs. even so the unemployment rate

ticked up to 6.2% from 6.1 as more americans started looking for work. the jobless are not counted as unemployed unless they are seeking employment. over the last six months it reached 244,000 in july at the best average in eight years

>> the house energy and commerce subcommittee on oversight held a hearing yesterday examining the implementation of the nation's health-care law. the next open of all the period for purchasing a plan on the exchanges starts on november 15. this is about two and a half hours. >> good morning. i convened the hearing of the subcommittee on oversight and investigations to review the implementation of the patient's protection and affordable care act. the first witnessed this morning, the principal deputy administrator at the center for medicare and dedicated services. this is the first testimony as a

cms employee but not the first appearance for the subcommittee. some of you may recall that he appeared before us last october to testify on behalf of one of the contractors who built the healthcare .gov site. the ongoing concern about healthcare .gov is one of the reasons we are holding this hearing today. exactly one year ago this week, the members of this committee will remember that we heard from cms administrators who told us that healthcare .gov would be ready october 1. we were told that it would work him everything would be fine and later we found out that that wasn't quite the same thing. in fact the contractors told us the that it would be working pretty damn for reviews of the website were brushed aside the know how our fears were well-founded. the rollout of the affordable care act was an unmitigated disaster and i think everyone agrees. so we want to hear honestly and candidly how things are progressing and hopefully be here with the same candor as the

administration official that we heard from last fall when you testified on behalf of the q. ssi the company that built up for healthcare.gov. the hub for healthcare.gov. the new role also comes into the opportune time. they've released the launch of healthcare.gov confirming what this committee learned during its own review of the website and the administration didn't have the expertise and couldn't meet the deadlines or have the leadership organization skills to manage this massive undertaking. and the gal also has given a price tag for this boondoggle. the website president promised would be easy to use and cost the taxpayer nearly $1 billion. it took a lot of taxpayers money from and their hard-earned paychecks to come up with the 1 billion many are not happy

about that. the walls add here that the costs are still going up, so my colleagues may whine and complain we are spending too much time examining the launch and i'm not surprised. the reality of the problems are still playing out and the impact this follows on the open enrollment period. we still didn't know if the administration had a system in place capable of handling the subsidies, web security or the cms would ever put in place a functioning payment system. i was asked today about the healthcare.gov contracts and the gal report, but as we head into the open enrollment, the families need to know how this will affect them because they are making the healthcare system more expensive, fragmented and restricted. early this summer, the insurers were required to notify the administration plans for premium rate in 2015 and we hope that today they will provide the rates that have been submitted from the public will know them come enough time to plan for the

purchasing of whether the public will ever see $2,500 in savings the president promised. speaking of promises we also want to know if americans will be able to keep their doctor and if they could keep their plan if elected. earlier the committee heard testimony from representatives of the insurance industry that noted that the requirements of the healthcare law required the cancellation of millions of policies. we hope to hear whether the administration predicts widespread cancellations and uncertainty again this fall. and it is not only individual plans that we are concerned about. last week the irs finally released information related to the enforcement of the employer mandate. this may be surprising to many. the administration has after all belabored this several times but it certainly raises questions about what will happen when one of the most controversial pieces finally goes into effect. finally, i remain concerned about the overall impact of the wall. millions of americans have their health insurance canceled because of the law only to find the plans they are forced to play are much more expensive and

the premiums, copayments and deductibles or all of the above. the massive cost and the destructive impact on the economy will continue to be filled for years. and i think both of the witnesses were testifying and recognize the ranking member for five minutes. >> thank you so much mr. chairman. i've got to say i don't think that we can go on the august recess without having another hearing on the affordable care act because this is the 12th one that we have had in the last ten years. as i said the aca oversight is an important topic that i would feel a lot better if we were actually doing oversight on what's happening now with the aca instead of hashing out older she was over and over again. we will ste stick purely to the rollout of the aca has an unmitigated disaster but i guess i would like to know how much we are going to keep beating this

drum because when you look at what has happened since the unmitigated disaster of the rollout, things are actually improving. and just about every prediction that was made about the law has turned out to be wrong once we got going. surprisingly should spend our time trying to figure out how to make the law work even better for the millions of americans who are now enrolling into getting health insurance. so, in the last year we had hearings where the majority insisted that americans would be hit by insurance shops. they are paying less than $100 a month and the majority insisted the broker healthcare.gov website would never be fake but think that it was and millions of americans used it to sign up for coverage. they insisted that many would not pay for coverage once they signed up but the insurers told us that wasn't correct and people in fact worth taking. they insisted that the 2015

premiums would skyrocket again that is proving not to be true. in fact, in many cases, d. n. roll please would be able to produce the premiums next year. they insisted that americans did not want or need health insurance coverage. but over 20 million americans have received coverage under the aca and the insurance rate, the insurance rate has dropped precipitously since january. the vast majority of the enrollees are happy with their plans and the important fact is in the interes interest of makee hearing is at least i want to talk about the fact sheet released by the energy commerce democratic staff on the benefits of the affordable care act and every congressional district in the country. i would like to enter a fact sheet into the record mr. chairman. >> i want to talk about the benefits of my law in the home state of colorado. and, rather, there are 142,000

state residents who were previously uninsured but now have quality affordable health coverage was of the affordable care act. in colorado the uninsured state residents has declined by about a third. almost 2.1 million people in colorado, including 460,000 children and 860,000 have insurance that covered the preventative services without any copayments or deductibles. 50,000 young adults in colorado had health coverage through their parents plan. more than 40,000 seniors have received medicare part drug discounts or $118 million. 1.8 people in colorado are protected by aca provisions that prevent the insurance companies from spending more than 20% of their premiums on the profits and administrative overhead

because of the protections over 210,000 individuals received approximately $41.7 million in insurance company rebate. up to 290,000 children in colorado with pre-existing health conditions can no longer be denied coverage by insurers. its even if you disagree with the law, it is important to note that they are helping our constituents. i hope that we could end these attacks and help more of team coverage over the law. we should look at the example for medicare. i can attest to it because i was here. manny didn't vote for the law and had concerns about how it was implemented. but we still have a town hall meetings and other events so that the seniors got coverage that cut their drug costs. i hope that we can work as we look into the next year in a bipartisan way to make the aca

better instead of trying to find ways to undermine and appeal it. i appreciate the us is coming here today and i know that we have important insights into the contracting for healthcare.gov and anything we can do to improve the contracting is good for me. i hope they've learned from website and i want to know the plan to make sure they do better moving forward. and i want to welcome you, mr. slavitt. you are new to cms and have primary responsibility for the website so i hope you can tell us you plan to do in 2015. >> i now recognize doctor burgess for five minutes. >> thank you for the recognition and for joining us here again in the subcommittee. throughout the development in the rollout of healthcare.gov, the committee t, the subcommitte has repeated assurances that the systems were and would be ready

to go if the implementation was on track. here in september literally days before the october 1 launch of healthcare.gov. we have repeated assurances from the then director of the center for consumer information insurance oversight. they would be able to go online and seek the premium subsidy and would be able to sign up. we know that they were challenged. without the development or its oversight of this has led to hundreds of millions of dollars of taxpayer dollars being wasted. again, the other hhs officials told us time and time again that the website was working. that was factually incorrect.

it was not working and it still may not be working because the back end of the systems that are responsible for actually paying the providers and consumers can believe the website is fixed because some of the front end problems have been addressed. but there is no way to verify the inaccuracies about things like citizenship and income level or insurance to show the correct subsidies are being paid for insurance premiums. thanks to this investigation we now have definitive proof that the department of health and human services was aware and the contracting documents show that they only expected 65% of the federal exchange to be ready on october 1. and then of course we are continuously reminded that the promises made by the

administration simply couldn't be kept because the groundwork hadn't been done in the website and they were not prepared. we are all still wondering what happened to the promised $2,500 in premium savings that every family in america could look forward to. we are all wondering what happened to be ability for people to keep their doctors. we are all wondering what happened to the ability for people to be able to keep their insurance plan. mr. coburn was also asked that his last appearance in january about the issue on their risk corridors and sharing and the question came up about what if there is not enough money in their risk corridor to actually cover the premium shortfalls that the insurance companies are experiencing? and what he looked to -- that

was mr. curran. what he looked to supplementing the funds from the general revenue at the treasury of the united states? he couldn't answer the questions. i asked him if he could provide a legal memorandum upon which he relied to obtain the ability to get the funding from other sources if it wasn't enough to cover the cost of the risk corridors. that was january. i'm still waiting. i would like to know if i'm going to receive an answer to that question. and if so, when that answer might be forthcoming. the fact of the matter is both departments of health and human services and the white house failed to heed internal and external warnings about the lack of readiness on the exchanges. it is -- now we have the general accountability office report, and it is astonishing to see that after all of the money has been spent, not all of it

wisely, the agency continues to ignore recommendations and continues to pump money into what may be a futile effort. we are well on track to sink over $1 billion into the development of the website and we have very little to show for the money and i will yield back the time. >> at the ranking member of the full committee mr. waxman for five minutes. >> thank you esther tremendous this is the 12th hearing this committee has held on the affordable care act since the end romans began in octobe october 2013. these hearings if you look at it then they all have one purpose, to undermine the affordable care act regardless of the facts of the hearings that misled the public to squander taxpayers dollars. in fact, the affordable care act is a historical success.

it's made comprehensive health care reform a reality for the american people. more than 8 million people have signed up for private health insurance plans for the federal and state marketplaces exceeding the annual mint estimates by over a million people. additionally, 6.7 million individuals have enrolled in medicaid or the sj program in may of this year and 3 million young adults under the age of 26 have enrolled in their parents health-insurance plans and the fact sheets that were put out from the staff revealed that in my district alone if i can be parochial, 17,000 residents who were previously uninsured now have quality affordable health coverage because of the affordable care act. so i'm getting some perspective that the law has been a success and it's a publishing with the congress and president obama

intended. instead, we have another hearing at this committee or other subcommittee of the full committee trying to say how the affordable care act has problems and has things wrong and presumably should lead to the conclusion it should be repealed. in the lawsuit there is a vertical to stipulate. we can stipulate what the gal is reporting and they've reported some things for which we ought to be concerned because despite the success of the law, the initial rollout of healthcare.gov has serious flaws and the government accountability office under the investigation of healthcare.gov contracting, we should always try to learn from the mistakes, not too low on them but to learn from them and i'm glad that

mr. slavitt is telling us what has been changed as a result. result. i'd had experience in the contracts and i was a tremendously oversight committee. and we released a report that identified nearly 200 contracts with over a trillion dollars that involved significant waste, fraud, abuse and mismanagement. the fbi had a contract to create a virtual case file system that had to be canceled after spending over $100 million. the department of homeland security contractor built up high-tech borders and its sophisticated always immigrants and we are still having problems. that said it's canceled after wasting a billion dollars. the coast guard on a multibillion-dollar deepwater contract built bunkers that wouldn't float. my point is not to excuse the healthcare.gov problems, but to put them in context with the

exception of tom davis congressional republican showed little interest in these enormous ways in a taxpayer dollars when george w. bush was president. i think we should care about waste, fraud and abuse and i'm proud that healthcare.gov was fixed quickly. not as quickly as i would have liked but fixed nevertheless in the time to help millions of americans enroll in insurance coverage. we told you there would be problems. okay. then the conclusion is to repeal it so they can replace it. but they've never given us a replacement. people like getting insurance who couldn't get it in the past because they have pre-existing conditions.

they find their insurance can't be canceled and women are discriminated against. people could now get insurance because we give them tax breaks in order to pay for it. so we are able to learn that the agency is doing anything involvement in 2015 goes more smoothly. we have the proof that health care reform is a success and we now need to make the 2015 and roman period as smooth as possible so that we can build on the success. let's try not to dwell on things that were wrong especially if you learned the lessons to fix the problems. >> the gentle means time is expired. just a message to the members and to the folks giving testimony today. we are expecting those around him:30, 10:40 i should say. i have a quick gavel and i will

ask members to stick to their five minutes. >> and then we will move forward if we need to be interrupted by goats we will come back after. so to introduce the witness on the first panel for today's hearing, the printable deputy administrator for the centers for medicare and medicaid services. and in the role he will be responsible for the agencywide policy program coordination is part of the new management structure that comes in response to the lessons learned from the rollout of healthcare.gov in organizations before. i will now swear in the witness. you are aware the committee is holding a hearing when doing so has the practice of taking testimony under oath do you have any objections? stomach no i don't. >> th. >> the chair advises under the rules of the house you are entitled to be advised by counsel.

do you swear the testimony you're about to give is the truth, the whole truth and nothing but the truth? >> i do. >> the witness answered in the affirmative. you are subject to such force. you may now give a five minute summary of your written statement mr. healthcare.go sla. >> members of the subcommittee i am and he slavitt of cms. i joined three weeks ago from the private sector or i spent the last 20 years since a plea working with physicians, hospitals, health plans and employers on solutions to the problems of health care costs, quality and access. in the private sector i started my own healthcare technology business and from larger scale self-service organizations of more than 30,000 employees. in october of last year i began my involvement with the

affordable care act implementation when i joined a group of people helping the cms team on the turnaround effort of the health-insurance marketplace. i'm very pleased to appear before you today and before answering your questions i will briefly walk you through some of the progress of the affordable care act to date in to talk about our priorities in the coming period. there is growing evidence that suggests the affordable care act is making a difference in the lives of millions of americans. in the first year millions of americans selected a private insurance plan through the state or federal health exchange marketplace and millions more have retained coverage on their parents policies or have qualified for a decade. in addition, we are seeing historically low growth in overall health spending which is continued into 2014. this is good news for consumers but the policy purchased in the marketplace under $100. the good news for taxpayers as the recent trust fund report

shows. importantly, this success is not being achieved by government policy alone or in partnership dissector as insurers grow by competing to provide better access to quality affordable services. now as we move into the second year of the marketplace implementation, we must build on the progress that's under way and he did the lessons of the last year. let me outline for you the highest priorities. first, we are focused on increasing the value consumers get when they come to the marketplace this is to improve the implementation of a plan options in the portability of the shopping experience. second, we have critical, technical and operations rarities. we must continually add automation that has begun with the critical release this summer and we will continue this year and following years.

on the consumer facing side of the technology improvements will be more continuous and incremental. we are managing the deliverables daily. but they managed to the execution. as part of the turnaround team i experienced firsthand the challenges of marketplace implementation. and at cms i hope to oversee the series of changes to improve the management of the marketplace. as the secretary announced in june we have created the top-down accountability. we've also improved the management of and communication with a working contractor with better defined requirements, metrics driven contract reviews

and requirements for skin in the game. we have expanded our particles into the more testing into the schedule. the management structure and the team asked surface of the issues and disciplined manner just as we did in the turnaround. this will be one of the continued improvement but not production. we are in the early stages of the program newly serving the millions of consumers and are still learning about the best ways and we ar are setting up io testing the neandtesting the ned the new technologies along the way. for my experience at this stage the businesses begin to see how closely the design matches the battle tested needs of the market. good organizations focused and continuously improve the

operations of the services they provide. they have the open enrollment and continue to deliver on the promise of the affordable care act to improve the cost and quality of all americans. thanks and i look forward to your questions. >> my very first job when i was a young man was cleaning out horse stalls and i felt like the difference between what i got to do is i got to ride the horses and it was nice. the difference between that job and this job is i don't get to ride the horses anymore so i appreciate your honesty and candor and one to ask questions. they were told repeatedly that it healthcare.gov website was fine and ready. months, days and weeks leading up to it everything is ready to go and the president said that

it would mirror the experience of other websites, so we have to ask well healthcare .gov be fully ready this fall? >> it does sound like from the report i seen that a couple of things happened. first the technology build was bigger and more complicated than people expected and i think the scope expanded because of that and the second as they pointed out there was significant issues in the management of the project. are there going to be some hiccups in the website implementation this fall? >> this year we can expect a different situation. we have a website that is already up and running and we've added continuous improvement in a much riskier fashion and frequently over the course of

the summer putting things into production we have built a big testing window, so everybody will remain on their toes and nervous and everybody knows what they need to do that we are expecting a good open enrollment. >> that they said there are still significant risks for the next open enrollment period and you say everything is good to be fine and ready to be a spinnaker job is to manage and understand the risks -- >> i just want to know if there's going to be problems that you will tell the committee that we anticipate that views the actions we are taking to move forward i think the whole committee would appreciate that so we don't have to get caught up in this guessing game. is that i expect it won't be perfect serving millions of people there are difficult situations. people many of whom are enrolling in the insurance for the first time it is a bumpy process at times and i think we have to commit a team of people that by and large are doing a good thing but there will be bumps. >> how many more people will you be enrolling in the fall or how many will be for the first time?

do you know in terms of your review on this so far of those that have enrolled how many have enrolled for the first time? a >> i've only seen the media reports which i can't hold a number on but it seems far greater than half that i've only seen that in the media. >> when the secretary was here i asked a question and have her repeat of those but how many were new. how many were eligible because of medicaid. the website has no way of knowing any of those things. would you agree that true? >> the data isn't yet known by us. we ar are getting a bead on what premiums people are paying so that's good. we have a sense that there is a good affordable the offered to them.

we don't know how many are served new by this. they call this the prettiest picture in the graph of the uninsured rate over time and it shows that dropped to 13%. >> that is reviewed by your office at the people that are uninjured before because you told me to really determine that and the secretary told me that there is no way to note that. >> we do know the uninsured rate from the recent gallup report is done to 13%. >> did you try to sign up for one of the plans on the site? >> have you also reviewed with people with a try to access

other positions into the plan allows for that initial visit and some other care. have you served the persons to find out if they've been able to see the positions for the cost is an example to review the cost of the payment levels that have reviewed any of those things? >> i have to get back to you. we don't have any hard data that we can follow up. >> you are recognized for five minutes. >> thank you mr. chairman. i agree that it's important to make the federal exchange website and also the state work as well for people and i ensure that you agree with that, don't you? >> yes i do. >> we want to make it as easy as we can for people to enroll and especially as we roll into 2015 is that correct?

>> that's correct. >> up until now despite the problems in the website, 8 million people enrolled in the marketplaces, is that correct? in about 6.7 million enrolled in the medicaid expansion is that right? so obviously people are able to utilize the website to get health insurance is that right? i was looking at part of the report and they made five recommendations in the report. are you aware of that? >> yes i am. >> what is your opinion of those recommendations? >> we agree with most of the recommendations. >> which ones don't you agree with? >> the only thing in the report but i think needs a little further clarification and it's not that i don't necessarily agree that it's the characterization of the contract, and i think it was

characterized as ballooning and cost, when in fact i think that the eccentric contract was there's an initial contract before the work was completely stoked. >> that was one of the findings but it wasn't one of the recommendations. the recommendations p6 >> i agree with all of the recommendations. >> what steps are you taking to implement those recommendations? >> we are doing a number of things. on the contracting front it's very clear who can give work to the center, how it gets managed and importantly they have skin in the game to make sure they deliver. i wasn't here last year so i can't speak to how it was managed, but i can tell you that now there is daily intensive

management of the project and risks and issues and concerns that are surfaced and dealt with and we have built early warning indicators that there is an account of the difference that is very significant. significant. a spinnaker you looking at the interoperability issues as well that is one of the problems we had before. >> as you pointed out, congresswoman, many different pieces in order to go out coordinations and systems integration is something that was missing last year and is in place this year. >> are you doing anything that was begun at the recommendations in the report? >> fortunately or unfortunately it wasn't news to the people and i think they worked awfully hard that they worked through the nightmare and they don't want to go through that nightmare again so i think actions were under way well before seeing this report, and i think they fall into the categories that i talked about contracting the reform and the technical

managerial oversight, focused and disciplined process management. >> we keep hearing about how expensive the cost overruns and everything else is setting up healthcare.gov were. i would like to know how much of a lawsuit against is going to cost with b. that as it may, i want to ask you are going to be attacked in the cost overrun. one was the inability for anybody interested in the private sector to estimate how big the project is and how complexities. we have a better handle on that now and i don't expect the overruns. second the contractor wasn't

damaged tightly with the deliverables an of the requirems of that has been put to bed as well are you aware that this dropped 25% after the implementation of healthcare.gov into the fold of commendation? >> that sounds right. >> i now recognize mr. harper for five minutes. >> thank you for being here today and i have a couple questions i would like to ask. first who is performing the role of the systems integrator? >> it's my prior company. >> who has that role now?

>> opt him. as >> some questions on the report we learned there were 4 million consistencies in the applications needed through healthcare.gov. of those inconsistencies are for citizenship status or income. the failure to calculate these could mean millions of americans could have to pay back incorrectly calculated subsidies. saw earlieso earlier it was repe were millions of these. first how did this happen and can't the website checked for accuracy? >> i appreciate the question. and consistencies ocher echoes of the changes that occur in people's lives and people end up having more current information in databases so we run last year hundreds of billions of checks against government databases to check on the income and a

citizenship status. the income is unpredictable and in other cases they haven't filed taxes before to make enough money. to give you a perspective on this for a typical family there are 21 records searched in the automated process and if even one of those records turned up not to be a match because of income or some other thing we have to pursue documentation and we do in the present documentation to try to ensure that these people are in fact telling the truth and as we have done that -- >> how could a person -- is that something that you can verify? >> there is documentation status whether it is a naturalization status and so forth those are sometimes not as current and the

government database as what the individual resident has in fact done in their life. >> so in an application, one could have multiple inconsistencies? >> that's correct. >> do you have the number of how many americans were affected by this problem? >> i think there were a couple million people but had inconsistent information that needed to be matched in some form or another about roughly half of those are income changes so these are people who will have to have two conducted a website and we urge people to do that to make adjustments because it will spell out of course on their tax forms. the other half we have cleared as of july 1425000 inconsistencies and rater than 90% of those are indeed in favor of the individual consumer who had more up to date information than we did.

>> this is something we want to make sure does not continue so what assurances can you give us today that we won't see these problems during the next enrollment period? >> i think we are learning that a certain amount of these data discrepancy problems are going to be a fact of life because of the fact that we have people that do have very nations in their income levels and so that's going to occur in the coming years. it's going to be different next year is we've now just released software that allows us to get to those inconsistencies much more quickly. what's important though is people that we reach out to that need additional documentation get in touch with us and back to us. >> thank you sir and i will you. >> mr. tonko for five minutes. >> thank you mr. chairman. you earlier went through some national statistics and i have

received information in my district. we have been waiting to get information and in the 20th congressional district in new york in 1,000 residents that were previously uninsured now have quality affordable health coverage because of a ca. the number of uninsured residents in my district has declined by some 23%. 214,000 individuals in the district including 137,000 women and 54,000 children now have health insurance. it covers preventative services without any copayments; germans or deductibles. 262,000 individuals in my district now have insurance but cannot place annual or lifetime limits on their coverage and up to 37,000 children in my district with pre-existing conditions can no longer be the night 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 the way of our district. so mr. slavit slavitt purdah for promising creating a one-stop marketplace was the ability to shop for health plans side-by-side and apply it in an apples to apples comparison. while the federal healthcare.gov site has done a good job in this regard in displaying the premiums and deductibles of the various plans it's been more difficult to assess the differences and health plan that works or whether a particular doctor is in the network for a given plan. can 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. if so, you are indeed correct. effect of last year i believe the typical consumer had dozens of several dozens of options to choose from in health insurance

and our job is to try to continue to grow that but as you pointed out, he have to make the information people are looking for more readily apparent and 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 also ask if you talk to people in your district that those territories that the insurance companies keep are not always up to date. they try to keep them up-to-date but it's always good to call the insurance company or to check if there's a physician that you want to see to make sure that they are in the network because this is important information for people to choose from. >> and in terms of allowing the consumer for example to search only for plans in which their doctor is covered? >> we don't have that ability. that's the kind of thing that might come in future years. >> what kind of obstacles are in

the way of that happening? >> i think one of the lessons learned from this project is to take disciplined incremental steps to making progress, not trying to do too much. and our schedule is pretty much filled with things that are important to make sure that we are executing well and i think those are the kinds of innovations that i could really see us getting excited about adding that didn't make the cut this year. >> if i could ask you a quick question about the medicare trust fund, the trustees report as even though came out on monday and we are talking about the funds being set for. that is 13 years longer than it was projected in 2009 when the aca was passed. the report noted that the changes made to the due to the socket a cost-saving provisions of the aca. do you believe that to be

correct? >> that sounds logical. and in effect since the passage, the medicare costs have grown at or near record of those. is that correct? >> that is correct. >> would you anticipate any continuing or additional benefits coming through medicare? >> yes i would. >> we appreciate the leadership that you have with the aca and we thank you for the improvement and i know that on behalf of the district that i represent, the numbers are very encouraging. i share them here this morning and we are going to continue to work to further improve so that one of these fundamental rights that the affordable and accessible quality healthcare fohealth carefor all is continu. so, and strengthened. with that i yield back. >> mr. griffin for five minutes.

>> thank you mr. chairman. i do appreciate that and thank you for being here this morning. you've indicated and testified that you were previously employed. is that correct? and i think i heard you say in your opening statement that you've left approximately three weeks ago was that also correct? >> a little longer. >> how long? >> i can get you the exact date. >> between three to four weeks tax >> something in nature, yes. >> here's the question. you now work for cms and what i understand you are a very talented individual and that is a good thing for cms. but if i understood your estimating as well, you indicated that the previous employer is managing the website as a systems integrator is that correct? >> that's correct. >> said in the question as an oversight committee is how our you able to manage your former r employee are anemployer and doee

a conflict of interest? >> thank you for the question. >> that there is as you know a pledge that i signed, and along with that disposed of all of my stock basically that i had in the company. >> you disposed of all of your stock? you said basically. >> all of, yes i'm not trying to qualify that. >> i didn't think you were but i want to make sure on the record -- >> got rid of my stock as appropriate. i signed that as appropriate commands it was appropriate. so now as a public servant, i have a very clear set of rules to follow. i have this ethics pledge and within that pledge, i have a limited waiver that allows me to

purpose of health reform implementation only on the website to be able to interact with all of the contractors as it benefits the implementation of the project. and so, i do that and exercise that very carefully. and very prudently but that is publicly available and i can make sure to get to you if you like. >> if you would, that would be great. >> and i would like to talk about that process because normally, in my experience when you move from the private sector to the public sector there's usually some kind of a period of not dealing with your former employee. it's usually a year or more and if you can explain the process how you came to this and you said it was a limited waiver but if you could explain the process i would appreciate that. >> it is i think a 15 page document and i can get you the details -- >> i would appreciate that. >> is two years and i think the only exception, i'm sorry i'm a

two years is the agreement not to communicate with my employer and there is a narrow exception for interaction relative to the implementation process. >> all right. and i appreciate that. but we ask you some westerns about your former employer because qs si is a subsidiary of united healthcare isn't that correct? >> that's correct. >> and in the 417 quarter one of this year earnings call, the united healthcare president and ceo stephen helms believed to recognize employees and that we try to move our employees are bound in different divisions of the country. and so i'm a little concerned about how much of a firewall is built between the qs si and united health group, because united is participating in some of the exchanges and in the

federal exchange, and so we had a situation where, again, there's an appearance of a conflict or impropriety because if you are shifting folks around and i said to one of my stuff this morning if they had a machine like they did on men in black and they zap their memories and remember nothing because it would appear that the folks at qssi the report united health group and larry renfro has a title or have to both companies come if that's the case, aren't they able then to gain information based on competitors about resonating in the process and all these meetings and then get an advantage over the competitors in the healthcare website? >> let me clarify two things. first, nobody on the healthcare.gov project is permitted to go back and to go outside of the project and to transfer into united healthcare. that is expressly prohibited.

second, just an important clarification because it's a little bit confusing, united healthcare and united health group are two different things. he united health group as a parent company with two different divisions. one is united healthcare and so, i don't want anybody to have the impression that optim is part of the insurance company when it's a sister company that is rod -- >> that it is a subsidiary -- >> correct. >> you all have questions that you will present for answers after the meeting. thank you. >> and i recognize mr. castor for five minutes. >> throughout the country come everyone is seeing the benefit of the affordable care act. and as of today, americans who are interested in the late code can access new fact sheets that provide statistics is the pond each congressional district is why encourage you to go to the democratic website of the energy commerce committee and call your member and we can provide those. i want to share some facts about

the benefit of the law in my florida district is 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 in my district has declined by 15%. that could have been higher if the republican-controlled repubd legislature and thlegislature ar would have expanded medicaid in florida 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 remain uninsured because florida is on medicaid. but over 40,000 people in my district were able to purchase coverage through the health insurance marketplace and nearly 10,000 were able to obtain coverage through their plans. 43,000 of my older neighbors

received medicare part d. prescription drug discount for a $22 million. that's a great shot in the arm and traffic money back in their pockets. so when we planned for the second year of open enrollment, we all want to make sure we don't have the computer problems that we had the last go around so i want to ask you some questions about premiums especially for the 2015 period. now, open enrollment begins in november is that correct? >> november 15. so folks need to at some point when will the website of the ready for the plans? >> we are going to be sending out notices to people starting in october to come back to the website, update their information and let them know that on november 15 they will be able to if they choose come back

to the website, shop for a plan, compete premiums and it happens with medicare part d., medicare advantage and most employers if they choose to do nothing he will be able to automatically enroll and the deadline is in february 15 of 2015. >> republicans predicted to premiums would skyrocket for the next go around increasing as much as 50% but 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 blacks >> so further rate increases have been publicly available from rhode island and washington and delaware have all been in the mid-single digits. california id leave is going to come out with their numbers today so i think that will be closely watched because colorado

has been very steady, so this isn't going to be true for every single individual in the county in america by and large the early results are very positive. >> .. and is it accurate to say that 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 you have -- 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 this is one of those win-win situations where the pre by actually providing more value to consumers, and that appears to be what is happening. >> and what else helps keep premiums low under the affordable care act?

>> certainly the preventive visits to. the ability to people -- for people to qualify for tax credits. >> one of my favorite ones, what we did in the affordable care act, that 8020 greuel, the medical loss ratio that says when a consumer purchase is a policy they have to get something meaningful. they can spend too much on profits and administrative costs. when they do they have to rebate the money back to consumers. because i represent the state of florida, we are happy that our consumers are going to receive $42 million back. i already heard from many of my neighbors. sometimes those rebates go back to the employer. you do need to keep an eye. >> safety numbers i have seen, something like $9 billion has been saved to consumers in the

process. >> that is very important. thanks. >> now recognize mr. johnson for five minutes. >> thank you, mr. chairman. it is good to see today. you and i have had a chance to interact before. 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. you talked about your many years in the private sector. could you give a quick summary of your years of experience and expertise? >> sure. i started my own health information technology company back in the 90's. was a small business that ended up serving consumers. how worked for a number of years the health of permission technology business.

worked closely on building industry wide capabilities around things like revenue cycle management. i worked closely with hospitals, a physician groups, health insurance plans, state governments all really focused on quality, cost, and access issues. >> and to summarize, when you were responding to mr. griffiths questions you led the team that basically made health care usable in october. >> correct. >> okay. i want to ask you, you have all of those years of experience and expertise and information technology specifically in the health care arena. how much should the website have cost? >> that is a really good question. it is a -- it is not unusual for

large-scale health projects, for example, i can think of a project from kaiser permanente when they installed electronic medicare records, it costs to will billion to put in place. it's hard to know the benchmark. consumer websites instead of back end systems connecting 50 states, medicaid plans, insurance companies. so i'm not quite sure. >> let me help you a little bit because i don't know if you remember or not, but my background is information technology professional. i have been through the lessons learned and the trial by error of trying to project cost of complex high tea systems like this. the gao says that we spent nearly a billion dollars on this with the costs climbing. do you believe that taxpayers have received a good return on their investment as far?

>> congressman, i think two things happened, and it's hard to know how much fits into each category. one thing is clearly this was a more complex project and a lot more work and people expected. >> and that goes back to the genesis of some of the questions that 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 plan cycle design process, it is much easier to project those costs. i know when i was doing large-scale program management on large itunes systems the industry's general rule was that in the life cycle of a complex system that the implementation part, the design, the building, the implementation part is only about 25 percent of the life cycle cost of a system. the rest of the cost is in maintenance, operations, and

further on down the road. so if this thing has already cost the taxpayers a billion a more to get to where we are today, we can reasonably expect that this is going to cost billions, billions or more over the life cycle of this thing. >> i could not 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 over time than the initial implementation does. >> i do think there will be an ongoing operating costs. i don't know that it will be greater. i would have to look at the budget request which i don't have with me. >> well, the budget request does nothing to do with how much it's going to cost. you understand how the industry works. but i appreciate. gao says ultimately more money

was spent to get less capability to you agree with that? >> i think there were clear inefficiencies. >> a lot of it is still not working. >> there were clear and efficiencies and how this was managed. would also say in the real world it is not always possible to know your scope going in. in an ideal world you can't, but i think the estimates proved. >> and i agree that it is not always possible to know the scope, but it is possible to sense the scope and therefore knowing the what you are going to pay for is what you're going to get which is clearly not what happened here. >> the journalist time has expired. please keep it in the timeframe because we are expecting votes in a few minutes. you're recognized for five minutes. >> thank you very much, mr. chairman. thank you for your testimony and your work. i want to talk about some of the things that happened in kentucky since we are doing an update and i am proud of the experience we have had so far in my state. but there was actually some

pretty astounding news earlier this week regarding the trustees of medicare coming from them about the prospects for viability of the medicare trust fund. are you familiar with that information? >> says to my and. >> could you tell us what has happened? as i recall, when we pass the four will care act in 2010, at that time the trustees were projecting the trust fund would be insolvent by 2017. >> i believe, if on not mistaken that in summary the projection is the trust fund life expectancy extended to 2030. >> 2030. that is pretty astounding. for years the projection extended the life viability of medicare by 13 years. also some really fascinating and impressive data about beneficiary expenditures that essentially were flat year to year. historically have been running at somewhere between five and 10% annually. is that correct? >> that's correct. >> thank you.

one of the things to spend a lot of time talking about people who signed up for insurance under the affordable care act. these are -- this is something that has come about from the commission of medicating kentucky. i think this so impressive. the 120 counties of kentucky color-coded by the amount and percentage of uninsured citizens in those counties prior to the dca. red and orange, which are most of the county's. i think all but probably a dozen or rates of 17 to 20 percent and then more than 20%. this is -- the current situation it is staggering to me because they dream is under a 11%, 8 to

11%. the dark blue and is less than 5%. we have counties in adolescence and southeastern kentucky that went from having the highest uninsured rate in the state, over 20 percent, to the los uninsured rate, under 5%. that, to me, is a staggering accomplishment. in kentucky we essentially have been shared about half of the previously uninsured population in the commonwealth. a state that has very poor health historically and currently. people who are desperately in need of health care. what is even more important, i think, than that is that to the report of the commissioner, again, of medicating kentucky talked about how preventive service utilization has increased dramatically to almost 16%. an annual dental visit which they were not doing before, preventable services increase to

almost 37%. colorectal cancer screenings by 16%. very, very important health measures that i think will pay off for the commonwealth economically but also for the life of these citizens going forward. economically, but also for the life of these citizens going forward. and also what is very important to note is how much reimbursements went up for providers in the commonwealth. totals of -- let's see, reimbursements for those now covered under medicaid expansion went up by $284 million. manufacture the hospital many of the hospitals and doctor and providers who were providing uncompensated care for kentucky residents are now being compensated and that also is a benefit to the taxpayers and the

treasury of the commonwealth. i just mention those things because it is very clear to me that states that embrace the affordable care act and committed to making it work are having very, very positive experiences. the adverse experiences were coming in states where the administrations of those states, the governments decided in some cases just not to participate in and other cases to try to sabotage the law. i thank you for your work and for the information you brought to us today. i yield back. >> gentleman yields back. mr. gingrey is recognized for five minutes. >> because of the medical loss ratio, i think they 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 ended up receiving an incorrect subsidy,

that they were not entitled to, what will 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 if the subsidy was too high and when will consumers know if they owe the government more money? >> thank you for the question, congressman. so if individuals have changes in their income, the best advice is they should come back to the website and update that information so that their tax credit and premium can be updated. for those adjustments that are not made when it comes to tax time, they'll either receive a refund or they'll have additional that they'll owe. >> well, 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 let's say pay and medicare claims that were fraudulent and then you have to go chase them down and try to get them back,

you never do. you are aware of this gao report that came out, i guess today, and it states that in january, cms awarded a new company, a contract to continue work on the federal marketplace for $91 million, right? >> correct. >> gao says the cost now has ballooned to more than $175 million, is that correct? >> that's what the report says, yes. >> and the investigation, of course, ended a few months ago. do you know if the cost, the estimated cost of $91 million that is now $175 million, that's in the report, has it gone up even further since the report? >> no, i think the estimate of the total contract and, again, not what's been paid, this is what is being budgeted, is about $170 million, that's correct? >> that's pretty big area, $91 million versus 175.

how is it you can offer a contract for $91 million and have it grow that much over such a short period of time? >> so i think the proper characterization of that contract is that the scope of the contract was completed after the initial contract was awarded. so i don't -- i wouldn't characterize the cost as ballooning, i would characterize it as the proper scope with the contractor accenture was determined after they got going. and the reason for that, if you don't mind me saying, is because they needed to be brought in an urgent situation to take over for a contractor that was leaving and so they agreed to an initial amount, and this was before my time, and then agreed they would come back after they got started, started the transition from cgi and then would come to terms with how much the scope ought to be. >> mr. slavitt, in my remaining time, let me ask you this,

you've been with cms for three weeks. and you're the number two guy there, right? >> correct. >> back in 2009-2010 time frame when we marked up this bill, a lot of us on this side of the aisle felt like if the american people were going to have this affordable care act, unaffordable care act forced down their throat, that members of congress and members of the administration, the president, cabinet members, political appointees like yourself, you're not a career bureaucrat -- >> that's correct. >> you've been appointed by the president to come into this important position. we felt, and still feel, many of us still feel that you ought to eat your own dog food. and members of congress, i think it is appropriate, we are doing that. we had to come off the federal employee health benefit plan and get on the d.c. health link, and yet you members of the administration, the president, and his family, really ought to

be doing the same thing. i know you worked in it, but let's say if you worked 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 of that in the few remaining seconds. respond to me. do you think it would be appropriate, a show of good faith to the american people that you guys and gals that are running this show, that forced it upon us, would be in the same plan that the american people have to be in? >> it is my understanding that the president and his family are on the exchange. i don't know this for a fact, but that's my understanding. and if it is determined that the rest of us should be on the exchange, i would happily do that. >> if that is true, please let me know and i know we are limited in time and i yield back to the chairman. >> i thank the gentleman for yielding back. now mr. green for five minutes. >> my good friend and colleague from georgia i'm going to miss. i normally drive chevys and i'm

on the plan. we had to buy ours through the exchange. so -- but i want to thank the chairman and ranking member and our witness for testifying. for decades the united states had highest rate of uninsured in the industrialized world this drives up costs and puts families at risk of bankruptcy when they get sick. the main reason is why we have a health sick system rather than a health care system because millions of americans can't get the care they need outside of the emergency room. and our own district in texas, urban district, affordable care act enabled 20,000 people previously uninsured to get quality affordable coverage. overall, the insurance rate in our district has fallen by 8%. 52,000 in the district will have access to coverage if texas had expanded medicaid. and hopefully we'll still get to that. earlier this month the new england journal of medicine, not fox news, not left or right wing internet site, but the new england journal of medicine released two reports on coverage

under the aca. would like to read a quote for them. with continuing enrollment that numbers of americans gain insurance for the first time or insurance that is better in quality, or more affordable than previous policy will total in the tens of millions. and mr. chairman, i'd like to have unanimous consent to place that article into record. thank you. mr. slavitt, are you familiar with the reports? >> yes, at the high level. >> earlier this week, the gallup poll released their latest numbers. are you familiar with that survey? >> yes, i am, congressman. >> the similarly the urban institute and commonwealth fund conducted surveys. can you discuss that also? >> i'm familiar with those too, yes. >> okay. would you agree that the findings of both gallup and new england journal of medicine are consistent with the millions of americans sign up for health care? >> they're consistent, very encouraging. >> okay. the only thing keeping millions

more americans from signing up for the coverage is the repeals of a republican governor and state legislatures to expand medicaid. if they did, another 5 million americans would be eligible for insurance. mr. chairman, i think the affordable care act coming out of the chute, it was a problem. it has been fixed and hopefully we'll see in the renewals it happened. but it is working. a lot of us had tough times october to mid-november who supported it. mr. slavitt, what is cms doing to address the execution or the technology lessons learned from the first enrollment section? >> well, congressman, i got to this project when it was beginning to turn around at the end of october. i think what we're doing now is essentially carrying over from -- just as we did in the turn around. no magic to it. it is basic blocking and tackling, good communication, it is quite frankly a lot of the

recommendations that had come out of the gao report and making sure that we have precise requirements. it is daily management. it is senior level accountability that goes all the way up to the secretary. >> you know, i advocated in texas having served a lot of years in the state legislatures that we should have had a texas plan that we could have done. some states had good examples of their plan. some not. could you talk about that, that, like, i know the state of maryland and other states had problems. and i don't know if they're fixed or not, but were they similar to what we had on a national scale for our states that didn't have a state plan? >> in terms of the challenges? or just in terms of what they got done in their state? >> yeah, were they on a smaller scale having the same challenges that we were? >> i think it is probably safe to conclude at this point, toward the end of 2014, that it was the rare state, maybe kentucky is one of them, that didn't underestimate how difficult this would be given

all of the complexities of tying into medicaid, tying into insurance companies, offering the consumer website and the first year of any new program, and in my experience, whether public sector or are private sector, sometimes bumpy. same will be true in the second year. but those problems become more and more minor and we get better all the time. >> to the best of your knowledge, for example, if a state wanted to create their own plan now, there is nothing in law that would prohibit them from approaching cms or hhs, that or expanding medicaid coverage. >> that's correct. >> thank you, mr. chairman. i' i'll yield back my time. >> i now recognize mr. burgess. >> i want to underscore the importance to me and even though mr. cohen is no longer at cms, i

would like to see that. >> we sent -- we recently sent it, so if you don't receive it, i'll follow up with your office and make sure that you have it. >> very well. it is kind of -- i was thinking, it was a year ago really right now that your boss, marilyn tavenner was here and we talked about the upcoming launch of healthcare.gov. but, of course, it was just a little less than a month after the unilateral decision by the president to delay the employer mandate. i remember asking mrs. tavenner about was she involved in that destination and she asserted she was not. i asked her how she found out about it, she said her chief of staff told her, which i found rather astonishing, if my chief of staff came and gave me information like that, i would be curious where that came from. she seemed to lack curiosity about how that decision was reached. but let me ask you this. a year later, employer mandate

is supposed to kick in about a week and a half after election 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? >> so i'm still working my way around the federal government, trying to understand how it -- my understanding and you could please correct me if i'm wrong is that that is a irs and treasury area of responsibility. so haven't been exposed to that so much yet. >> my personal belief is that we'll never see the employer mandate. i have no inside information obviously. i'm not speaking for the committee, just myself. when you look at the disruption caused in the individual market, october, november, december of last year, and remind yourself that that was only 15% of the insurance market that had that convulsion, had that happened to the entire, both the large group

market, small group market, individual market, all at once, it would have been pretty disruptive. now, you heard mr. gingrey talk about members of congress and members of the administration should take same thing people have to take. i agree with that. in fact, i did not take the bc exchange that was offer to members of congress and their staff. i said, look, i'll do what other people in my district have to do. i went to healthcare.gov, bought a bronze plan off the website, biggest mess i've ever been involved in in my life. but i finally got through, took about 3 1/2 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 and enormous deductible. but what can i look forward to in the next insurance year? you talked about you wanted asea successful open enrollment? is it going to be successful? what are rates going to look like? >> so i think we're at a stage

now where, and, indeed, this is one of our high measures for success, making sure there is enough choices and enough affordability and, of course, each state is going through their own process and going through rate reviews. we have seen some states publicly now come out with their rates. i believe rhode island, washington, california today is going to have, i think, an announcement with their rates. i couldn't tell you, congressman, about texas because i don't know. but generally speaking, what we have seen are rates that are in not the double digit increase levels, but in the midsingle digit levels. that's not going to necessarily be the case in every county in america, but that seems to be what is happening on average. >> but still, i mean, you've mentioned that three or four states where we have a long way to go before renewal rates across the country are in evidence. >> no question. >> you're the principle deputy administrator. do you have any responsibility or involvement in the renewal or

rate filings? >> i think these -- these rate filings get reviewed and approved at the state level. there is a process and i think it is -- we're in the midprocess. i believe right now that the -- >> let me interrupt you because my time is running out. do you receive interim reports or updates on what those state filings are? >> i think there is an initial submission and i've seen a high level report, but this is not yet final information. >> and are -- is your office going to make those rate filings public information? will we have the availability to access that? >> when they become final, absolutely. >> again, as a healthcare.gov member from the state of texas and the federal fallback, i would like to know what my renewal rates are for next year. thank you, mr. chairman, i yield back. >> i recognize miss schakowsky for five minutes. >> thank you, mr. chairman. i just wanted to tell you, mr.

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, you know, clearly it comes up. consumers get confused, have a lot of questions have some problems. i get irritated sometimes on the other side. i feel like there is an embracing of these problems, rather than a constituent service attitude to fix the problems. and when we have tried, we have had -- we had good success. and 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 law in all the districts in the country, and it is just wonderful to see how the number

of people that in my district, 283,000 people in my district, including 51,000 children and 120,000 women now have health insurance that covers preventive services without any co-pays, co-insurance, or deductibles. needless to say that is huge. >> very good news. >> and up to 36,000 children in my district with pre-existing conditions can no longer be denied coverage by health insurers. it is just lots and lots of good news including the new medicaid enrollees that are now being covered. but i did have a question. so we're talking somewhat about the states that have expanded medicaid and have not. 26 states, district of columbia, expanded medicaid coverage under the affordable care act. and in those states medicaid is seeing great success.

enrollments increased substantially and the percentage of the population without insurance has declined dramatically. and i'm asking, you mr. slavitt, if you've seen studies that compare the decline in the number of uninsured in states that did and did not expand medicaid. >> yes, i have seen those studies. >> can you tell me what you found? >> the states that have expanded medicaid and i'll get back to you on the exact figure, have seen significantly lower rates of uninsured than those states that did not expand medicaid. >> but we have seen a decline in any case, in most -- >> decline in any case and bigger decline in states that have expanded medicaid. >> and have you seen the estimates about the number of americans that would receive health care coverage if all 50 states expanded medicaid? do you know the size of the estimate? >> i believe that it is an additional 5 million if i'm not mistaken. >> thank you. and if that is the case, then i

believe you that it is this is really an appalling number. 5 million americans who would receive health care coverage if republican governors and state legislatures took the simple step of expanding medicaid. it is obviously good for people when more people have health insurance. but mr. slavitt, what about health care providers. how does the medicaid expansion help them? >> so, my information is anecdotal, but it appeared that with the dramatic reduction or significant reduction in uncompensated care, it appears that this is a very good thing for providers. >> and this committee has spent the last three years looking for some affordable care act related scandal and despite all their concern, they have systematically ignored an ongoing health care tragedy. the dereliction of duty by republican governors around the country who refuse to expand

medicaid. for 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 americans, right? >> that's correct. >> and yet for some reason republican governors and dozens of states have refused to expand coverage to low income insured individuals and their states, correct? >> that's correct. >> this, to me, is a real scandal. the expansion doesn't cost states a dime, it provides quality affordable coverage for millions of americans working hard to get by. yet some republican governors and state legislatures are deliberately refusing to provide coverage to millions of uninsured americans. and, mr. chairman, that it seems to me is an issue the subcommittee really should look into. and i yield back. >> gentle lady yields back, now

recognize miss blackburn for five minutes. >> overseeing the implementation, getting to the bottom of the questions is very important. and continuing to do our due diligence, and i know that several people have mentioned the new england journal of medicine article from last week. the health reform changes and health insurance coverage. and my friends across the aisle have wanted to tout that as being something to prove their point. i think that it is important, though, to go in here and look at how the authors came to the conclusion that 5.2% more had insurance, that there was a decline in those without insurance from september 2013 to june of 2014. and then the authors mentioned the limitations of their study. they said that the study did not distinguish between persons enrolling for the first time and

those changing their enrollment and i really wonder how many of those that had to buy more expensive policies, new policies that were obama care 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 doctor and did they report difficulty paying medical bills? well, it seems to me a more important outcome measure would be whether a person was actually able to see the doctor because in our district we hear from people, they can't get access to the doctor. they have got access to the kwo queue because they have the card, but not to the doctor. while my colleagues across the aisle talk about how many people have insurance, i would like to remind everyone that having an insurance card is not the same

as having medical care. and i continue to hear from people in tennessee who lost their health plan, they liked it, they can't keep it, i hear from people that have not been able to keep their doctor because of the narrow networks in obama care. i hear from people who go to the doctor and need a test, but can't get the test because their co-pays and co-insurance are too high. they can't afford it. this stuff is too expensive to afford. finally, we're hearing from some of our tennessee insurance carriers, they are going to have a 19% increase in the health insurance premiums in 2015. so it's kind of like added 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 you're having to wait. i don't understand why my colleagues across the aisle

continue to defend this thing. but today we are shifting our focus to oversight and the way taxpayer dollars -- i remind everyone, taxpayer dollars are paying for this and the people don't like it. january 1, 2014, hhs certified to congress the american health benefit exchanges the marketplace were verifying their applicants for advance payments of the tax credits, cost-sharing reductions were indeed 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 credits usi usi using fictious documents. when i had my marketing business, we would run secret shopper programs for malls, shopping centers, chambers of

commerce. would you identify where your problems are and you get in there and you clean them up. the problem is the system allows fraud. if you've got 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 we're here to learn about the contracting practices that took place at cms with the botched implementation of this law. we are looking at the gao study. this thing is not much better. let's talk about this contract. so january cms awarded a contract to a new company to continue work on the federal marketplace. it was $91 million contract, correct? >> correct. >> okay. now gao says that cost has

ballooned to more than $175 million, is that correct? >> you can answer that question. >> that is what the report says. i don't agree with that characterization. >> thank you. i will smith the rest of my questions. i yield back. >> thank you. though just called a vote. we'll go through ms. elmer's questions. you are recognized five minutes. >> thank you, mr. chairman. i would like to go back to the discussion you had with my colleague from ohio mr. johnson. you made comments where you pointed out in the real world, and you know, that things are much more realistic and that ideologically many times things seem like they are going to be better than they are. i would say to you, sir, that is exactly why i ended up running for office being a nurse because

i did see and my husband as a doctor saw that the plan going forward was not going to be realistic. we have learned over time that that is the case and there were many promises made that have not been kept. well intended, but not true for the american people. so i do share with you that same sentiment, but realize too that that is why we feel so strongly about this issue. you did have an change on the cost of health care.gov and what it should have cost. you reluctantly did not answer the question of the cost being $1 billion. is $1 billion too much for the

implementation thus far? >> thank you, congresswoman. i have not seen a study yet which looks at what the appropriate costs for building the entire health care.gov system should be. of course, i do acknowledge that our colleagues at the jao pointed out that there were absolutely inefficiencies and waste in the way the contract was managed. at the very least we know there was some. i would hesitate to say though that it was entirely waste because there was a really significant set of systems built. 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, what is achievable and you know, simply throwing money at it then looking back in hindsight to determine what did work and didn't, i think we all are learning from this experience. that of course has value. i don't know how you measure it, but the american taxpayers are still on the hook for this.

and that is again why we are taking the approach we are, which is when is it going to be enough? when are we going to achieve the goals at a cost-effective measure? i want to look into some of the issues with security breaches. are you aware at this time of any problems that the website, from the building of the website and that there are still concerns? are you aware of any right now? >> so there have been no successful malicious attacks, and certainly to the best of my knowledge, no one's individual data has ever been compromised from the health care.gov website. >> so to the best of your knowledge, and just based on the answer you gave, you are not seeing that there were any related information breaches in health care.gov or traveling through the federal exchanges that you would consider a security breach? >> we have not seen any

malicious attacks that have been successful, and we've not seen anybody's personal information in any way get compromised. >> what is the definition of a successful breach? >> i'm not trying to be cagey. other than to say that nobody has successfully penetrated the security system, to the best of my knowledge, congresswoman. >> 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 that have? >> not to my knowledge. >> and information on enrollees or applicants, none there, as well? >> not to my knowledge. >> are you aware of any changes to site protocols or standards to address breaches to access information? >> i think it's fair to say that

the security team does continuous 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

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 w the 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 and operational readiness a review conducted in the spring of 2013. that operation readiness review was moved from the spring to the fall to september of 2013 just weeks before. >> to then know it was not going to work? >> well, as i said, there was some indication in the files that they thought all the 65% complete. .. 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