HealthCare.gov: Case Study of CMS Management of the Federal Marketplace

WHY WE DID THIS STUDY

As required by the Affordable Care Act (ACA), HealthCare.gov is the Federal website that facilitates purchase of private health insurance for consumers who reside in States that did not establish health insurance marketplaces. At its launch on October 1, 2013, and for some time after, HealthCare.gov users were met with website outages and technical malfunctions. After corrective action by CMS and contractors, HealthCare.gov performance improved and facilitated health plan enrollment for millions of consumers. The problems at launch raised concerns about the effectiveness of CMS management of the Federal Marketplace. The objective of this case study was to gain insight into CMS implementation of the Federal Marketplace, focusing primarily on HealthCare.gov.

HOW WE DID THIS STUDY

Our review spans 5 years, providing a chronology of events and identifying factors that contributed to the website's breakdown at launch, its recovery following corrective action, and implementation of the Federal Marketplace through the second open enrollment period. We interviewed 86 current and former Health and Human Services (HHS) and CMS officials, staff, and contractors involved with the website. We also reviewed thousands of HHS and CMS documents, including management reports, internal correspondence, and website development contracts.

WHAT WE FOUND

We found that HHS and CMS made many missteps throughout development and implementation that led to the poor launch of HealthCare.gov. Most critical was the absence of clear leadership, which caused delays in decisionmaking and a lack of clarity in project tasks. Additional missteps included devoting too much time to developing policy, which left too little time for developing the website, and failing to properly manage its key website development contract. CMS's organizational structure and culture also hampered progress, including poor coordination between policy and technical work. CMS continued on a failing path despite signs of trouble, making rushed corrections that proved insufficient. Following the launch, CMS and contractors pivoted quickly to corrective action, reorganizing the work to improve execution. Key factors that contributed to recovery of the website included adopting a "badgeless" culture for the project, wherein all CMS staff and contractors worked together as a team, and a practice of "ruthless prioritization" that aligned work efforts with the most important and achievable goals. CMS recovered the website for high consumer use within 2 months, and adopted more effective organizational practices.

CALL FOR CONTINUED PROGRESS

CMS continues to face challenges in implementing the Federal Marketplace, and in improving operations and services provided through HealthCare.gov. OIG calls on CMS to continue progress in applying lessons learned from HealthCare.gov to avoid future problems and to maintain improvement across the agency. These lessons comprise core management principles that could apply to other organizations. CMS concurred with OIG's call for continued progress, stating that it will continue to employ the lessons learned and that since OIG's review, it has implemented several initiatives to further improve its management.