Hawaii Senator Slom to file complaint with GAO to investigate Hawaii Health Connector

News Release from Office of Sen. Sam Slom March 20, 2014

HONOLULU— Senator Sam Slom has released his letter to Linda Rosen, Director of Hawaii State Department of Health requesting information on the 204 million dollars Hawaii has received from the federal government in Affordable Care Act grants. To date Hawaii has failed or refused to release information pertaining to the grants citing “”a potential threat” by making public ideas that could put the state exchange at a competitive disadvantage with the private sector.”[1]

In his letter Senator Slom writes: “Hawaii has received over 200 million dollars in federal grants to build a health insurance exchange to meet the requirements of the Affordable Care Act. Despite this funding, Hawaii has the lowest enrollment rate in the country. [see aspe.hhs.gov - February enrollment.pdf*] In addition, the website, run by CGI, has experienced numerous technical problems mirroring the problems of the federal CGI-run website. Many people have been unable to enroll via the website, contradicting assurances that the Hawaii Health Connector was meeting its deadlines and would be ready to serve the public. The lack of transparency regarding the grant expenditure requirements prompts this request for information and documentation.

Please provide the following:

• A copy of Hawaii’s Exchange Blueprint Application Submission, including the attestations made in connection with same.
• A copy of Hawaii’s contingency plan that was due January 15, 2013, as required by the Centers for Medicare & Medicaid Services (CMS).
• A copy of the detailed and integrated timeline mapping policy and technical decisions as well as readiness dates for review and testing of all Federal artifacts.
• A copy of the grant application for award number HBEIE120155 titled “Cooperative Agreement to Support Establishment of State Operated health Insurance Exchanges” in the amount of $14,440,144 granted on November 29, 2011, for Level One funding.
• A copy of the grant application for award number HBEIE120126 titled “Cooperative Agreement to Support Establishment of State-
• Operated Health Insurance Exchanges” in the amount of $61,815,492 granted on August 23, 2012, for Level One funding.
• A copy of the grant application for award number HBEIE130159 titled “Cooperative Agreement to Support Establishment of the State-Operated Hawaii Health Insurance Exchange” in the amount of $128,086,634 granted on April 8, 2013, for Level Two funding.”

On March 17, 2014 Senator Slom attended the Senate info briefing on the Hawaii Health Connector on Monday given by Tom Matsuda, Interim Executive Director of the Hawaii Health Connector.

Senator Slom recounts: “While there were several slides in the power point, there were few specific answers to my questions. Taxpayers should be very alarmed. The Connector now boasts 5,400 people “signed up” but that does not equate to actual policy holders and is far short of the 100,000 person estimate made by the Connector last year. The registration period ends March 31 of this year. This means Hawaii resident taxpayers will make up any losses of the Connector.”

Senator Slom states that during the briefing:

• “I asked for the total number of paid employees, part and full time, and total cost. It was not available.
• I confirmed that the Connector still has an ongoing contract with the failed national and Hawaii contractor, CGI, Inc. at a cost of more than $53 million.
• Of the Federal grant of $204 million, the Connector has spent “about half” but I could not get specifics.
• I asked how much was spent on advertising but was not given a total, only that advertising has expanded.
• It is unlikely the Federal Government will extend or expand grants to the Hawaii Connector thus placing the burden on Hawaii taxpayers to make up additional costs.
• Mr. Matsuda kept talking of the “complexities of the process,” but it is the Connector and added bureaucracy that makes it complex.
• Mr. Matsuda said the Connector is changing to the “Kayak model” referring to the on line travel booking website. I told him I use that website which is easy and reliable and there is no complexity, no delay and no added cost.
• I commented on the Small Business Health Options Program (SHOP) for small business and related how inefficient and dysfunctional it is and how small businesses are frustrated.
• Mr. Matsuda noted changes in the law and application and I indicated that those changes and exceptions and waivers are from the Obama Administration and only help unions, big business and special interests, not small business or individuals.
• Finally, I asked Mr. Matsuda what he felt about certain Legislators who are now proposing a state takeover of the non-profit Hawaii Connector. He was non-committal in response.”

Senator Slom says: “My conclusion is that this Connector was flawed fatally from the beginning, with an unrealistic business plan, and no change of personnel, tweaking or additional subsidies will solve its failures.

Because of the continued lack of information, I have sent a formal letter to Linda Rosen, head of the State Department of Health requesting more information.

If this information is not fully revealed, I will file a complaint with the U.S. Government Accounting Office (GAO) calling for a federal investigation of how our money was spent.”

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PDF: Letter to State Dep't of Health

PDF: Accountability in Government Grants

PDF: 2013 HHS Letter to Abercrombie

*Note: in the aspe.hhs.gov March enrollment.pdf it now states on page 22 at (2): “We are no longer showing data on the total number of completed applications and total number of individuals applying for coverage in completed applications in this table because we believe that there is duplication in these metrics.”

[1] See Los Angeles Times article by Maeve Reston dated February 25, 2014: “Health Connector officials refused to provide The Times with the grant applications that Hawaii submitted to the federal government to justify the state’s federal funding, saying that the release of such information would create “a potential threat” by making public ideas that could put the state exchange at a competitive disadvantage with the private sector. (NP) The federal Centers for Medicare & Medicaid Services has also declined to discuss the Hawaii exchange. Despite requests from The Times beginning in early January, it has not released the state’s application for taxpayer dollars or its progress reports.