Raimondo team faces lawmakers over ‘botched’ benefits system launch

Company hired to handle $364M project, Deloitte, blamed for 'a swath of destruction'

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PROVIDENCE, R.I. (WPRI) – Rhode Island lawmakers sharply scolded the Raimondo administration Thursday for what they’re calling a “botched” rollout of a new $364-million computer system for benefits, pressing for faster action to improve how it works.

The rare out-of-session hearing – held, perhaps not coincidentally, barely two weeks before lawmakers face voters in the November election – was a joint meeting of the House Finance and Oversight Committees. It lasted about four hours and was attended by nearly one in three House members.

House Oversight Chairwoman Rep. Patricia Serpa, D-West Warwick, began and ended the hearing with harsh words for Gov. Gina Raimondo’s track record. Without saying the governor’s name, Serpa criticized “millions of mismanaged dollars” not only tied to the new computer system but also to the infamous tourism campaign rollout earlier this year and the investment of pension money into hedge funds when Raimondo was treasurer.

“We’re tired of missteps, mismanagement, misspending. Our constituents are tired of it,” Serpa said. “How many more times is this going to happen?”

The three administration officials who testified – Secretary of Health and Human Services Elizabeth Roberts, Department of Administration Director Michael DiBiase, and Department of Human Services Director Melba Depeña Affigne – acknowledged the Sept. 13 launch of the new benefits system, known as the Unified Health Infrastructure Project (UHIP), hasn’t been smooth for everyone.

At the same time, they insisted the system is working for “the vast majority” of the roughly 318,000 Rhode Islanders who use it, and urged the legislators to contrast UHIP’s wobbly but non-catastrophic launch with those of other health-related IT projects that failed disastrously, including in Massachusetts. They also said manual “workarounds” have been put in place to deal with many problems for now.

“Every issue that has delayed or hindered the delivery of benefits on time has real-life consequences for Rhode Island families who are already struggling to get by,” Roberts said. “Where we have failed to take care of these families, it is our responsibility and we are working as hard as possible to get it right.”

UHIP was begun under former Gov. Lincoln Chafee for two reasons: to build the state’s Obamacare insurance portal, HealthSource RI; and to replace the state’s Reagan-era computer system for other benefit programs, such as food stamps, Supplemental Security Income, child-care assistance and Medicaid.

At the hearing lawmakers offered a litany of anecdotes from unhappy constituents who’ve experienced problems since last month’s launch, including those who’ve been stuck waiting for hours in person or on the phone to get help. At one point Rep. Anthony Giarrusso, R-East Greenwich, compared administration officials’ positive spin on the situation to the infamous Iraqi official “Baghdad Bob” who delivered Saddam Hussein’s propaganda during the first Gulf War.

The backlog of applications for UHIP’s various programs has grown from around 500 before the new system launched to roughly 8,000 as of Wednesday, according to the administration.

One issue that came up repeatedly was the decision not to heed a federal official’s warning letters, first revealed by Target 12 earlier this month, that UHIP was not ready to launch Sept. 13. DiBiase said the state decided to launch the system anyway because delaying it for further testing, as the official recommended, could have added costs and caused problems for HealthSource RI open enrollment, which starts Nov. 1.

Under questioning from Rep. Kenneth Marshall, DiBiase also tacitly acknowledged that a Sept. 9 letter from the other federal agency closely involved with UHIP, the U.S. Centers for Medicare and Medicaid Services, did not provide authorization to launch the system in the way Raimondo has claimed it did.

“This was not authorization to go live,” said Marshall, D-Bristol. “This was authorization to transfer data.”

“You’re right that it’s not an endorsement of our ability or decision to go live,” DiBiase replied.

According to the House Fiscal Office, the total cost of the UHIP project as currently defined has grown from $191 million to $364 million since 2013, with the bulk of the project paid for by the federal government. The contractor hired to build the system, Deloitte, is in line to receive an estimated $267 million.

Source: R.I. Executive Office of Health and Human Services
Source: R.I. Executive Office of Health and Human Services

DiBiase said he could not rule out that the administration will need to ask lawmakers to revise the current year’s budget to add more money for UHIP, but said they are “trying our best to avoid that.” He also skirted around questions about whether Deloitte would have to pay penalties for its performance.

Rep. Mike Chippendale, R-Foster, lambasted Deloitte for its work not only on UHIP but on various other problematic government tech projects around the country, saying the global consulting firm has left “a swath of destruction” coast to coast.

“I am not sure how anyone with a straight face could look at Deloitte and see them as a viable vendor for a project of this magnitude, with the history they have of failure,” Chippendale said.

Chippendale also pointed to an independent report on UHIP that officials received shortly before launch, calling it “a scathing indictment” of Deloitte and state officials. He noted one section of the report that showed 46% of the roughly 1,200 defects found during late testing were due to incorrect coding by Deloitte.

Another major concern discussed at the hearing was wait times, which the state estimates at more than two hours in some cases, and which lawmakers said would be much higher if they were actually being calculated accurately. Depeña Affigne acknowledged to Serpa that DHS workers are now only handling four to 10 clients a day, down from as many as 30 before UHIP, because of technical problems and unfamiliarity with the new system.

A group of those workers, including the president of their union, made their voices heard during the hearing by occasionally heckling the three administration officials and shouting out their own answers to some of the questions asked by legislators.

DiBiase said he hopes the various problems tied to UHIP will stabilize “over the next month or two.” The system is supposed to save $16 million in the current budget year, and more in the future, by policing benefit eligibility better.

Serpa indicated lawmakers will keep a spotlight on UHIP in the coming months.

“This isn’t a one and done,” she said. “We are not going away.” She added: “Get ready.”

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes The Saturday Morning Post and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram