Lawmakers Question IT Contract for Federal Health Plan Exchange


On Monday, two Republican lawmakers sent letters inquiring about a potential conflict of interest in a health insurance exchange contract for technology services, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 12/10).

Sen. Chuck Grassley (R-Iowa) and Rep. Fred Upton (R-Michigan) sent a letter to UnitedHealth Group and a letter to Quality Software Services, or QSSI, a UnitedHealth Group subsidiary contracted to build a database hub for a federally run health insurance exchange (Snowbeck, St. Paul Pioneer Press, 12/10).


Under the federal health reform law, states by January 2014 must create health insurance exchanges to provide coverage options for individuals and small businesses.  The insurance exchanges will rely on a solid IT foundation to connect with advanced eligibility systems for Medicaid and other state-administered health programs.

Experts predict that as few as 15 states will establish their own health insurance exchanges by the 2014 deadline. Therefore, many states will rely on the federally operated insurance exchange.

About the QSSI Contract

In January, QSSI received a large contract to build a federal data services hub that would be used to operate the federal health insurance exchange (iHealthBeat, 11/5). In September, UnitedHealth Group's Optum division acquired QSSI (St. Paul Pioneer Press, 12/10).

The acquisition of QSSI was not disclosed to the Securities and Exchange Commission, spurring concerns that UnitedHealth Group's insurance subsidiary, UnitedHealthcare, might benefit from the transaction.

Although QSSI's contract is not publicly available, a draft statement of work used during the bidding process suggests that the contractor will finalize technical requirements for creating and delivering plan management services (iHealthBeat, 11/5).

About the Letters

In their letters, the lawmakers wrote that the federal contract "creates a situation whereby the exchange's ultimate designer, QSSI, is in a position to tailor the system to favor the interests of its parent company, UnitedHealth Group, and further maintain a monopoly over information that is unavailable to competitors."

Grassley and Upton asked UnitedHealth Group and QSSI whether they had taken steps to mitigate potential conflicts of interest and ensure QSSI's independence from UnitedHealthcare.

Response to the Letters

In response to the letters, UnitedHealth Group spokesperson Matt Stearns said, "Putting our customers' secure and proprietary interests first is a hallmark of our service and has earned us the strong confidence and trust of those we serve every day."

Stearns added, "We look forward to responding to (lawmakers') questions" ("Healthwatch," The Hill, 12/10).
Marchel Burgess
This would not be the first time that UnitedHealthGroup was guilty of this type of concealed subsidary relationship. They should be disqualified from this contract on that basis alone. Barring that, they need to be watched like a hawk to ensure that they do not treat their own company more fairly than others. Not to be trusted.

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