Health Connector to Pay $1.1 Million to fix File Transfers

Transferring patient information to health insurance providers is one of the core functions of a Health Exchange. It is also one of the pieces not working in the new Massachusetts Exchange, and it will cost $1.1M to enable – about 1/3 the cost of the original Health Connector site.

In a presentation to the board, Jason Hetherington – the Director of IT for the Connector – explained the critical nature of the file transfers.

Due to the critical nature of communicating enrollment information to carriers the Health Connector officially de-scoped the 834 from the HIX/IES project under CGI and is seeking to enter into an agreement with Dell Services to complete this work effort.

The changes to the file transfer protocol are mandated by Obamacare, and are described in a memorandum from Roy Mansur, the COO of the Health Connector, “In addition, new Affordable Care Act (ACA) requirements entail transmission of enrollment information to the Centers for Medicare and Medicaid Services (CMS) for the purposes of

enrollment reporting, payment of Advanced Premium Tax Credit (APTC) to QHP Issuers, and Cost Sharing Reduction (CSR) reconciliation”

The total cost for the development of this component of the exchange will be $1,100,000 initially with a $0.20 per enrollee per month ongoing maintenance fee.

Payments will be made on a milestone basis for the development phase. Payments will not be made unless the criteria for that particular invoice are met. The anticipated schedule and associated payments are as follows:

 February 15, 2014: Completion of design document and approval of project plan – $300,000

 April 1, 2014: Successful deployment of the 834 solution in production – $400,000

 May 1, 2014: Successful exchange of 834 and related files for the period of one month after

deployment – $400,000

There will be a holdback of fifteen percent (15%) from the first two milestone payments until the

successful exchange of 834 and related files for the period of one month after deployment.

There is also a penalty of $20,000 per day if the file transfer protocol is not functioning by March 31, 2014.

The total cost of this fix is about 1/3 of the entire development cost of the original RomneyCare exchange.  

The board voted to enter into this contract with Dell.

About Rob "EaBo Clipper" Eno