Obama Admin 'Divorces' Contractor CGI Federal, Puts Trust in Accenture

Months after the disastrous launch of the "Obamacare" website, the federal government has tapped the consulting giant Accenture to continue fixing Ties with the original contractor, CGI Federal, have been severed.

The Centers for Medicaid and Medicare Services has announced that Accenture has been selected to become the lead contractor for and to prepare for next year's open enrollment period.

"Accenture will bring deep healthcare industry insight as well as proven experience building large-scale, public-facing websites to continue improving," David Moskovitz, chief executive of Accenture Federal Services, said in a statement.

CMS has selected Accenture for a one-year, $45 million contract for the project's initial phase, which includes 24/7 customer support, eligibility and enrollment functions, and transmitting the personal data in enrollment forms, according to CNN.

"We are pleased that more than 1.1 million consumers already have enrolled in a private plan in the federal Marketplace thanks to existing efforts and look forward to working with all of our contract partners to ensure a smooth transition of this work," CMS said.

The announcement of Accenture's selection came Saturday, the day after CGI Federal said the Obama administration chose not to renew its contract, which was up at the end of February. The original contract of the company, which built the healthcare portal, was for two years and valued at nearly $100 million. CGI Federal, hired Sept. 30, 2011, as the main contractor, will continue to perform other work for CMS.

The administration's move follows trading of blame by CGI Federal and the government after serious flaws emerged in the operation of the healthcare portal soon after its launch on Oct. 1, 2013.

"They are at odds over who is at fault so it's not a surprise there's a divorce," Robert Laszewski, president of Health Policy and Strategy Associates LLC, an Alexandria, Va.-based policy and marketplace consulting firm, tells Wall Street Journal. "Accenture's reputation is mixed, like all major government contractors. The question is, can they do a better job? I think it's telling they weren't the first choice. It's when you get a divorce you go to the second and third choice."

The Obama administration claimed early December that they had achieved the goal of getting running smoothly apart from the need for a few more fixes. "While we strive to innovate and improve our outreach and systems for reaching consumers, we believe we have met the goal of having a system that will work smoothly for the vast majority of users," said a progress report by the Health and Human Services Department.

Flaws persist. The portal still cannot automatically enroll those eligible for Medicaid in states' programs, and nor can it calculate exact amounts for customers' federal subsidies. It can't even tell the number of consumers who have paid their premiums, among other failings.

The criticism of Obama's Affordable Care Act also continues. "A change in contractors does not change the sad state of this law," Rep. Fred Upton, a Republican from Michigan and House Energy and Commerce Committee Chairman, said in a statement.

Given the March 31 deadline for signing up for 2014 health insurance under the Obamacare, it will be challenging for Accenture to deal with an expected surge of last-minute sign-ups.

Accenture signed a high-profile legal settlement with the Justice Department less than three years ago over its contracting practices, according to The Washington Post. The dispute ended with the firm agreeing in September 2011 to pay $63 million to settle a lawsuit alleging that it improperly benefited from recommending specific hardware and software as part of government contracts, and also by inflating prices on contracts and distorting the federal bidding process.

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