|Budget Issue:||OSI performing project management for CalHEERS project|
|Program:||Office of Systems Integration (OSI)|
|Finding or Recommendation:||Approve Governor’s request to increase OSI’s reimbursement authority by $115.4 million to perform project management services for the Cal Healthcare Eligibility, Enrollment and Retention System project. OSI has indicated it will share its “lessons learned” document upon completion of project which will provide insight into how to make IT project management processes more efficient and successful.|
Patient Protection and Affordable Care Act (ACA) Establishes Exchanges. In order to make health care coverage more accessible and affordable, the ACA, known as federal health care reform, establishes entities called Health Benefit Exchanges. (Please see our report, The Patient Protection and Affordable Care Act: An Overview of Its Potential Impact on State Health Programs, for more information on ACA implementation issues.) Through these exchanges, individuals and small businesses will be able to obtain information about health coverage and purchase it. The California Health Benefit Exchange (also known as the Exchange or Covered California) funds the California Healthcare Eligibility, Enrollment and Retention System (CalHEERS) project—primarily through federal grants—to build a web-based portal designed to be a streamlined resource from which individuals and small businesses will be able to research, compare, check their eligibility for, and purchase health coverage. CalHEERS must be operational by the federal deadline of January 1, 2014 to meet the goals and requirements of the ACA. (The Exchange plans for CalHEERS to be operational for pre-enrollment on September 28, 2013.)
Legislature Approves Streamlined Approach to Expedite CalHEERS Implementation. The Legislature recognized the need to design and implement CalHEERS within a short time frame. To facilitate its completion by the federal deadline of January 1, 2014, the Legislature approved a streamlined approach that expedited the implementation of the project, as opposed to requiring the project to comply to the typical information technology (IT) reporting requirements. As discussed below, OSI has significant experience managing complex IT projects such as CalHEERS.
The OSI Was Established to Manage IT Projects Such as CalHEERS. The OSI was established in 2005 to manage a portfolio of large, complex health and human services IT projects and has developed a track record of successfully managing large-scale mission critical systems. The OSI project management services offer the following benefits:
The Governor proposes an increase to OSI reimbursement authority in 2013-14 of $115.4 million to provide project management services during the development and implementation (D&I) and maintenance and operation (M&O) phases of the CalHEERS project.
Rejecting Proposal Could Significantly Compromise Project. In order to provide project management for the CalHEERS project, OSI requires reimbursement from the Exchange for the costs associated with these project management services in fiscal year 2013-14. Failure to authorize OSI reimbursement authority could compromise the successful implementation of the CalHEERS project by the federally mandated implementation date of January 1, 2014.
The federally mandated ACA implementation date of January 1, 2014 requires an aggressive schedule which, thereby increases the risk of missing deadlines and successfully completing the project. The short timeframe and associated risks with the CalHEERS project creates a need for the services of an organization with a proven track record for effective project management. The Exchange does not have significant IT project management experience since IT infrastructure development is not a core function of the organization. It would be difficult for the Exchange to form a project management team in the short timeframe required by the federal government. The Exchange would increase the likelihood of successfully completing CalHEERS implementation on time by leveraging OSI’s project management expertise and management services during the D&I and M&O phases of the CalHEERS project.
Potentially Valuable Lessons From Streamlined Approach to CalHEERS Project. The CalHEERS project creates a valuable opportunity to learn lessons about the advantages and disadvantages of a streamlined approach. Lessons from the CalHEERS project can inform the state regarding best practices for future IT projects that must manage the tension between operating within a constrained time frame and mitigating project risk. Lessons from the CalHEERS project can also provide valuable insight into how to make current and future IT project management processes more efficient and successful. The OSI’s practice is to document lessons learned upon the completion of a project.
We recommend approval of the Governor’s proposal to increase OSI reimbursement authority by $115.3 million to provide project management services for the CalHEERS project. This approach best facilitates the need to complete the project by January 1, 2014, and provides the required project management services to mitigate project risk. We believe OSI’s lessons learned document would have value as a resource for the Legislature to inform decisions about current and future IT projects. Through discussion with OSI we learned they plan to share the document with the Legislature upon completion on the CalHEERS project.