Raimondo apologizes as top aide says RI shouldn’t have launched UHIP

Governor's point man criticizes Deloitte, state officials; more workers to be hired

PROVIDENCE, R.I. (WPRI) – Gov. Gina Raimondo’s administration made a mistake by launching Rhode Island’s troubled new benefits system prematurely, and lead contractor Deloitte failed to provide accurate information about the project, a 30-day review by one of the governor’s top aides has concluded.

Eric Beane, Raimondo’s chief operating officer, was ordered last month to conduct an assessment of the $364-million system – known as the Unified Health Infrastructure Project (UHIP) – following months of problems in the wake of its September launch.

“The bottom line is, the system isn’t working,” Beane told reporters, saying the governor asked for his report after realizing her administration had “lost credibility” in its statements about UHIP after downplaying the problems for months.

“We needed more time, we needed more staff and we needed more training to be ready for the rollout of the system,” he said.

At a news conference Wednesday, Raimondo said: “To all of the employees at DHS who have been struggling with this new system, and to all of the Rhode Islanders who have been struggling with this system and enduring hardships because the system hasn’t worked, I apologize. I apologize. I want you to know you we are going to get this right.”

Raimondo estimated it will take more than a year to make the system fully operational, though Beane said he hopes significant improvements can be made over the next few months.

Fallout from Beane’s report has already been seen at the State House, with R.I. Health and Human Services Secretary Elizabeth Roberts – one of the senior officials overseeing UHIP – resigning on Tuesday. The governor already fired two other officials last month when she ordered Beane’s review.

Raimondo announced she has tapped Anya Rader Wallack, who previously served in her administration as HealthSource RI chief and then Medicaid director, as Roberts’ acting replacement while a search is undertaken for a permanent secretary. Wallack said Roberts’ longtime No. 2, Jennifer Wood, will no longer serve as a deputy secretary but remain on as general counsel.

Five months after UHIP launched, Beane painted a grim picture of the current situation. Benefit backlogs have continued to grow, workers cannot complete tasks without major workarounds, and morale is low. The HealthSource RI insurance portal, which launched three years ago as UHIP’s first phase, isn’t working as well now that the full system is up and running.

“The big difference is people are finally admitting the problem,” Raimondo said.

Another mistake the administration made, according to Beane’s report, was quickly laying off staff members at the Department of Human Services in hopes their work could be done with fewer people using the new system. He said the state now plans to offer jobs to some of the workers who lost their positions, and to hire others.

“It was just misguided to assume that things could switch that quickly,” Beane said. “It’s abundantly clear to me now that we need more, not fewer, staff to cope with the challenges of the rollout of the new system.” He added: “Moving forward, this needs to be an employee-led turnaround.”

Deloitte, the company that built the system, came in for major criticism from Beane. He said the company failed to give the state accurate assessments of UHIP’s progress and launched an “incomplete” system in September. Raimondo said she will continue to withhold payment from Deloitte and wants the company to cover the costs of cleaning up the mess, including the additional staff.

“Deloitte presented much too rosy of a picture to us,” Raimondo said, adding: “If I had known in September what I know today, I would not have let the system go live.” She also said the administration was under “pressure” from “high-ranking General Assembly members” to avoid further delays and higher costs.

A spokesman for Deloitte, Jonathan Gandal, struck a conciliatory note in a statement Wednesday. “We take seriously our commitment to the people of Rhode Island and deeply regret that the new system has caused frustration and hardship for some DHS clients, workers, and service providers,” he said.

Gandal said Deloitte is “working around the clock” and has “invested significant resources” to improve UHIP, including by naming new leadership on the project. “We will continue to enhance the team as needed and work collaboratively with the state to make things right,” he said.

The state has paid roughly $200 million to Deloitte for UHIP so far, and is supposed to pay the company an additional $68 million, the administration estimates. Raimondo stopped payment to the company last month, and has scheduled a meeting with its representatives to discuss renegotiating its contract. She also left open the possibility she could file suit against Deloitte if the company doesn’t cooperate with her proposed fixes.

Beane acknowledged that UHIP is unlikely to achieve the savings targets previously put forward to defend its high cost, saying an analysis of that is currently being conducted and it’s likely to “take longer” to recoup the expense.

Virginia Burke, the top lobbyist for nursing homes in Rhode Island, questioned how Raimondo could have failed to understand the full scale of the problems with UHIP until now. “Child care and LTC [long-term care] providers have been screaming for months,” Burke noted on Twitter.

As acting secretary, Wallack will be overseeing a set of state agencies that spend billions of dollars a year and assist hundreds of thousands of people. She said her top priority beyond fixing UHIP is finding permanent directors for the Department of Human Services, the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, and Medicaid.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram