Sen. Sam Slom, minority leader (photo by Mel Ah Ching)
Sen. Sam Slom, minority leader (photo by Mel Ah Ching)

HONOLULU – Just under a week before Hawaii Health Connector interim Executive Director Tom Matsuda will testify before a Congressional sub committee in Washington, D.C. about Hawaii’s troubled Obamacare system, a state senator has filed a complaint with the Government Accountability Office, asking for an investigation into the Connector’s spending of a $204 million federal grant.

KITV reports on Thursday, April 3, 2014, the Joint Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs chaired by Jim Jordan (R-OH) and the Energy Policy, Health Care and Entitlements chaired by James Lankford (R-OK) will hold a hearing on “Examining ObamaCare’s Problem-Filled State Exchanges.” In addition to Hawaii, representatives from Oregon, Maryland, California, Minnesota, and Massachusetts also were asked to appear.

Senate Minority Leader Sam Slom also has called for an independent investigation by the Government Accountability Office.

In a March 27 letter to the GAO, Slom said he is concerned about the possible waste and abuse of federal funds.

See the letter here: Letter to GAO (JS) 3_27_14 (v#2)

“Hawaii received $204 million in federal grants to build its healthcare insurance exchange. Despite this funding, as of February 1, 2014 our state has the lowest enrollment rate in the country,” Slom said.

Hawaii contracted with CGI Corp. to development of the Hawaii Health Connector website but the site has experienced a number of technical problems and delays.

“Because of similar problems, the federal government and other states who had also contracted with CGI Corp. cut ties with the vendor. To date, Hawaii has spent over $80 million on information technology contracts, though the site still does not function properly. … Over five months later, technical problems continue to plague the Connector,” Slom said.

One of the major problems is the Connector is not integrated with the Medicaid system, even though Hawaii’s enrollment process requires consumers to be screened for Medicaid eligibility before seeking coverage, Slom said.

As of March 17, just 5,400 people enrolled for healthcare insurance in Hawaii, despite predictions by Gov. Neil Abercrombie that “hundreds of thousands of people” would enroll, and the Connector’s plan for at least 50,000 people to enroll.

The Connector also contracted with 30 community organizations to help with public outreach, which Slom said is a waste of funds.

“As part of this last-ditch enrollment effort, the connector sent representatives to Planned Parenthood, grocery stores, and other public places to separately walk individuals through enrollment. This one-on-one enrollment process is extremely inefficient, and the creation of an online enrollment portal was supposed to avoid this wastefulness,” Slom said.

Lawmakers and media have complained about a lack of transparency by the Hawaii Health Connector, which is an independent non-profit agency set up by the legislature to run the exchange. Slom was the only legislator of 76 to vote against the establishment of the Connector.

“Even more disturbing is the lack of transparency regarding requirements attached to federal grant money and Connector’s expenditure reports. Since the Connector is operated by the state as a non-profit organization, and is governed by a board of directors, it has been nearly impossible for legislators or the general public to get any specific information regarding HHC’s budget and expenditures. Requests for details have been either denied or ignored,” Slom said.

Hawaii will not receive additional federal grants, Matsuda told Hawaii lawmakers in a recent Senate briefing. That means Hawaii taxpayers will likely fund the exchange in future years, unless enrollment, and fees, increase substantially.

“The Interim Director of the Hawaii Health Connector admits that even if the enrollment goal is reached, the premium fee will not produce enough money to fund the Connector when federal funding ceases at the end of 2014xiii. There have been several suggestions regarding funding after 2014, including the possibility of allocating state funds and/or making the HHC a state agency. However, without complete disclosure regarding the financial status and viability of the Connector, legislators cannot and should not saddle the taxpayers with this indefinite burden,” Slom said.

Among Slom’s requests for the GAO investigation:

  • How the $204 million Hawaii received in ACA grants has been dispersed;
  • Whether the payment of a large portion of the federal grant monies to CGI Corp. for a product that continually fails to fulfill the requirements for a state health exchange website be considered an abuse of federal funds;
  • If the Connector’s failure to address concerns relating to CGI Corp. and the health exchange website in timely or appropriate fashion, is an abuse of federal funds;
  • Whether CGI Corp. fulfilled the provisions of its contract with HHC and the state;
  • Why the Connector has failed to publicly disclose all copies of Hawaii’s grant applications related to the establishment of State-Operated Health Insurance Exchanges;
  • Why the Connector has failed to publicly disclose Hawaii’s contingency plan, which was due January 15, 2013, and was required by the Centers for Medicare & Medicaid Services.
  • And what additional costs were incurred as a result of the failure to plan for the integration of Hawaii’s Medicaid system into the Hawaii Health Connector and CGI Corp.’s failure to anticipate or incorporate this issue into HHC’s exchange website.

Slom also has sent his GAO inquiry to the Congressional committee that will hear from Matsuda on Thursday, beginning at 4 a.m. Hawaii time. The hearing will be livestreamed oversight.house.gov.

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