PATIENT 

PROTECTION AND 

AFFORDABLE CARE 

ACT

Status of CMS Efforts 

to Establish Federally 

Facilitated Health 

Insurance Exchanges

Report to Congressional Requesters

June 2013

GAO-13-601

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-601, a report to 

congressional requesters

June 2013

PATIENT PROTECTION AND AFFORDABLE 

CARE ACT

Status of CMS Efforts to Establish Federally 

Facilitated Health Insurance Exchanges

Why GAO Did This Study

The Patient Protection and Affordable 

Care Act required the establishment in 

all states of exchanges—marketplaces 

where eligible individuals can compare 

and select health insurance plans. 

CMS must oversee the establishment 

of exchanges, including approving 

states to operate one or establishing 

and operating one itself in states that 

will not do so. CMS will approve states 

to assist it in carrying out certain FFE 

functions. CMS will also operate an 

electronic data hub to provide eligibility 

information to the exchanges and state 

agencies. Enrollment begins on 

October 1, 2013, with coverage

effective January 1, 2014. GAO was 

asked to examine CMS’s role and 

preparedness to establish FFEs and 

the data hub. In this report, GAO 

describes (1) the federal government’s 

role in establishing FFEs for operation 

in 2014 and state participation in that 

effort; and (2) the status of federal and 

state actions taken and planned for 

FFEs and the data hub.

GAO reviewed regulations and 

guidance issued by CMS and 

documents indicating the activities that 

the federal government and states are 

expected to carry out for these 

exchanges. GAO also reviewed 

planning documents CMS used to 

track the implementation of federal and 

state activities, including documents 

describing the development and 

implementation of the data hub. GAO 

also interviewed CMS officials 

responsible for establishment of the 

exchanges. GAO relied largely on 

documentation provided by CMS—

including information CMS developed 

based on its contacts with the states—

regarding the status of the exchanges 

and did not interview or collect 

information directly from states.

What GAO Found

The Centers for Medicare & Medicaid Services (CMS) will operate a health 

insurance exchange in the 34 states that will not operate a state-based exchange 

for 2014. Of these 34 federally facilitated exchanges (FFE), 15 are in states 

expected to assist CMS in carrying out certain FFE functions. However, the 

activities that CMS plans to carry out in these 15 exchanges, as well as in the 

state-based exchanges, have evolved and may continue to change. For 

example, CMS approved states’ exchange arrangements on the condition that 

they ultimately complete activities necessary for exchange implementation. CMS 

indicated that it would carry out more exchange functions if any state did not 

adequately progress towards implementation of all required activities.

CMS completed many activities necessary to establish FFEs by October 1, 2013, 

although many remain to be completed and some were behind schedule. CMS 

issued numerous regulations and guidance and took steps to establish 

processes and data systems necessary to operate the exchanges. The activities 

remaining cross the core exchange functional areas of eligibility and enrollment, 

plan management, and consumer assistance. To support consumer-eligibility 

determinations, for example, CMS is developing a data hub that will provide 

electronic, near real-time access to federal data, as well as provide access to 

state and third party data sources needed to verify consumer-eligibility 

information. While CMS has met project schedules, several critical tasks, such as 

final testing with federal and state partners, remain to be completed. For plan 

management, CMS must review and certify the qualified health plans (QHP) that 

will be offered in the FFEs. Though the system used to submit applications for 

QHP certification was operational during the anticipated time frame, several key 

tasks regarding plan management, including certification of QHPs and inclusion 

of QHP information on the exchange websites, remain to be completed. In the 

case of consumer assistance, for example, funding awards for Navigators—a key 

consumer assistance program—have been delayed by about 2 months, which 

has delayed training and other activities. CMS is also depending on the states to 

implement specific FFE exchange functions, and CMS data show that many state 

activities remained to be completed and some were behind schedule.

Much progress has been made, but much remains to be accomplished within a 

relatively short amount of time. CMS’s timelines provide a roadmap to 

completion; however, factors such as the still-evolving scope of CMS’s required 

activities in each state and the many activities yet to be performed—some close 

to the start of enrollment—suggest a potential for challenges going forward. And 

while the missed interim deadlines may not affect implementation, additional 

missed deadlines closer to the start of enrollment could do so. CMS recently 

completed risk assessments and plans for mitigating risks associated with the 

data hub, and is also working on strategies to address state preparedness 

contingencies. Whether these efforts will assure the timely and smooth 

implementation of the exchanges by October 2013 cannot yet be determined.

In commenting on a draft of this report, the Department of Health and Human 

Services emphasized the progress it has made in establishing exchanges, and 

expressed its confidence that exchanges will be open and functioning in every 

state by October 1, 2013.

View GAO-13-601. For more information, 

contact John Dicken at (202) 512-7114 or 

dickenj@gao.gov.
Page i GAO-13-601 Federally Facilitated Health Insurance Exchanges

Letter 1 

Background 5

CMS Expects to Operate an Exchange in Most States, but Planned 

CMS and State Exchange Activities Continue to Evolve 14

CMS Completed Many Activities to Establish FFEs and the Data 

Hub by the Beginning of Open Enrollment, Although Completion 

of Some Activities Was Behind Schedule 19

CMS Spent Almost $394 Million through Contracts to Support 

Establishment of the FFEs and Data Hub and to Carry Out 

Certain Other Exchange-Related Activities as of March 2013 30

Concluding Observations 33

Agency Comments 34

Appendix I Contractors Supporting the Federally Facilitated 

Exchanges and Data Hub and Amounts Obligated 35

Appendix II Comments from the Department of Health and Human 

Services 45

Appendix III GAO Contact and Staff Acknowledgments 47

Tables

Table 1: Examples of Activities Completed by CMS to Establish 

Federally Facilitated Exchanges (FFE), Including 

Partnership Exchanges 20

Table 2: Other CMS and State Consumer Assistance and Outreach 

Activities to be Completed Prior to Initial Enrollment in 

the Federally Facilitated Exchanges (FFE), as of May 2013 29

Table 3: CMS Obligations for Contracts That Support the 

Establishment of Federally Facilitated Exchanges (FFE) 

and the Data Hub by Largest Project Type, through 

March 31, 2013 32

Table 4: CMS Obligations for Contracts That Support Federally 

Facilitated Exchanges (FFE) and Data Hub Establishment 

by Largest Contractor, through March 31, 2013 33

Contents 
Page ii GAO-13-601 Federally Facilitated Health Insurance Exchanges

Table 5: Contractors Supporting Establishment of the Federally 

Facilitated Exchanges (FFE) and Data Hub and Amounts 

Obligated, Fiscal Year 2010 through March 31, 2013 35

Figures

Figure 1: Health Insurance Exchange Arrangements for 2014, as of 

May 10, 2013 15

Figure 2: Timeline for CMS Data Hub Activities to Be Completed 

Prior to Initial Enrollment, as of May 2013 24

Figure 3: Timeline for Plan Management Activities to Be Completed 

by CMS and States for Federally Facilitated Exchanges 

(FFE) Prior to Initial Enrollment, as of May 2013 26

Figure 4: Timeline for Navigator and In-Person Consumer 

Assistance Activities to Be Completed by CMS and States 

Prior to Initial Enrollment, as of May 2013 28

Figure 5: CMS Obligations for Contracts That Support the 

Establishment of Federally Facilitated Exchanges (FFE) 

and the Data Hub, by Appropriation Account, through 

March 31, 2013 31
Page iii GAO-13-601 Federally Facilitated Health Insurance Exchanges

Abbreviations

BSD Business Service Definitions

CHIP State Children’s Health Insurance Program

CMS Centers for Medicare & Medicaid Services

data hub federal data services hub

DHS Department of Homeland Security

DOD Department of Defense

FFE federally facilitated exchange

HCERA Health Care and Education Reconciliation Act

 of 2010

HHS Department of Health and Human Services

IRS Internal Revenue Service

OPM Office of Personnel Management

PPACA Patient Protection and Affordable Care Act

QHP qualified health plan

SHOP Small Business Health Options Program

SLA Service Level Agreements

SSA Social Security Administration

VHA Veterans Health Administration

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Page 1 GAO-13-601 Federally Facilitated Health Insurance Exchanges

441 G St. N.W.

Washington, DC 20548

June 19, 2013

The Honorable Orrin G. Hatch

Ranking Member

Committee on Finance

United States Senate

The Honorable Fred Upton

Chairman

Committee on Energy and Commerce

House of Representatives

The Honorable Darrell Issa

Chairman

Committee on Oversight and Government Reform

House of Representatives

The Patient Protection and Affordable Care Act (PPACA) requires the 

establishment in all states1 of health insurance exchanges—marketplaces 

where eligible individuals can compare and select among insurance plans 

offered by participating private issuers of health coverage.2

 

1

In this report, the term “state” includes the District of Columbia.

The 

Department of Health and Human Services’ (HHS) Centers for Medicare 

& Medicaid Services (CMS) is responsible for overseeing the 

establishment of these exchanges. Enrollment in the exchanges is to 

begin on October 1, 2013, and the exchanges are to become operational 

and offer health coverage starting on January 1, 2014. The Congressional 

2

Pub. L. No. 111-148, §§ 1311(b), 1321(c), 124 Stat. 119, 173, 186 (Mar. 23, 2010) 

(hereafter, “PPACA”), as amended by the Health Care and Education Reconciliation Act of 

2010, Pub. L. No. 111-52, 124 Stat. 1029 (Mar. 30, 2010) (hereafter, “HCERA”). In this 

report, references to PPACA include any amendments made by HCERA.

PPACA also requires the creation of similar exchanges, called Small Business Health 

Options Program (SHOP) exchanges, where small employers can shop for and purchase 

health coverage for their employees. We are separately reporting on the implementation 

of SHOP exchanges. See GAO, Patient Protection and Affordable Care Act: Status of 

Federal and State Efforts to Establish Health Insurance Exchanges for Small Businesses, 

GAO-13-614 (Washington, D.C.: June 19, 2013).

 
 

Page 2 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Budget Office estimated that about 7 million individuals will enroll in 

exchanges by 2014, increasing to about 24 million by 2022.3

The exchanges are intended to provide a seamless, single point of 

access for individuals to enroll into private health plans, apply for incomebased financial subsidies established under the law, and, as applicable, 

obtain an eligibility determination for other health coverage programs, 

such as Medicaid or the State Children’s Health Insurance Program 

(CHIP).4 In order to enroll in health insurance coverage offered through 

an exchange, individuals must complete an application and meet certain 

eligibility requirements defined by PPACA; for example, they must be 

U.S. citizens or legal immigrants. To support exchanges’ efforts to 

determine applicants’ eligibility to enroll, CMS is building a tool called the 

federal data services hub (data hub). According to CMS officials, the data 

hub is to provide one electronic connection to federal sources for near 

real-time access to data, as well as provide access to state and other 

data sources needed to verify consumer exchange application 

information.5

PPACA directed states to establish state-based exchanges by January 1, 

2014.6 In states electing not to establish and operate such an exchange, 

PPACA requires the federal government to establish and operate an 

exchange in the state, referred to as a federally facilitated exchange 

(FFE).7

 

3

Congressional Budget Office, Effects on Health Insurance and the Federal Budget for the 

Insurance Coverage Provisions in the Affordable Care Act—May 2013 Baseline

(Washington, D.C.: May 14, 2013).

As a result, the federal government’s role with respect to an 

exchange for any given state—in particular, whether it will establish an 

exchange or oversee a state-based exchange in the state—is dependent 

4

Medicaid is a joint federal-state program that finances health care coverage for certain 

low-income individuals. CHIP is a federal-state program that provides health care 

coverage to children 18 years of age and younger living in low-income families whose 

incomes exceed the eligibility requirements for Medicaid.

5

Near real-time refers to a system capability to deliver data in response to transactions 

one at a time, as they occur.

6

PPACA, § 1311(b)(1), 124 Stat. at 173. We recently reported on the preparatory actions 

of selected state-based exchanges. See GAO, Health Insurance: Seven States’ Actions to 

Establish Exchanges Under the Patient Protection and Affordable Care Act, GAO-13-486

(Washington, D.C.: Apr. 30, 2013).

7

PPACA, § 1321(c), 124 Stat. at 186.
 

Page 3 GAO-13-601 Federally Facilitated Health Insurance Exchanges

on state decisions. As directed by PPACA, FFEs must carry out the same 

functions as exchanges established and operated by a state. The federal 

government bears responsibility for establishing and operating FFEs; 

however, in establishing the framework within which an FFE in a

particular state will be established and operated, CMS has provided 

states the option to assist with certain FFE operations. CMS refers to 

FFEs in these states as partnership exchanges. States seeking to 

operate a state-based exchange were required to submit an application to 

CMS containing attestations regarding when the state would complete 

specific required activities CMS deemed essential to operating an 

exchange. States electing not to establish a state-based exchange, but 

seeking to participate in a partnership exchange were required to 

complete an abbreviated version of that application tailored to the 

particular activities that the state would assist the FFE to carry out. On the 

basis of this documentation, CMS conditionally approved states to 

establish a state-based exchange or to participate in a partnership 

exchange on the basis that they complete the required activities by 

certain dates, among other steps necessary for the operation of an 

exchange. States electing not to establish a state-based exchange or 

participate in a partnership exchange were not required to submit an 

application to CMS.

As the required start of health plan enrollment draws near, an important 

question is whether CMS will have FFEs ready to begin accepting 

applications by October 1, 2013, and fully operational by January 1, 2014. 

You asked us to examine the federal government’s role and 

preparedness to establish FFEs and the data hub, and the sources and 

amounts of funding used by the federal government to carry out 

preparatory activities. In this report, we describe

1. the federal government’s role in establishing FFEs for operation in 

2014 and state participation in that effort,

2. the status of federal and state actions taken and planned for FFEs 

and the data hub, and

3. CMS spending to support establishment of FFEs and the data hub.

To describe the federal government’s role in establishing FFEs for 

operation in 2014 and state participation in that effort, we reviewed 

regulations and guidance issued by CMS in preparation for establishing 

the FFEs. We examined documentation from CMS indicating the activities 

that the federal government and states are expected to carry out for these 

exchanges. We also interviewed CMS officials to clarify these documents 
 

Page 4 GAO-13-601 Federally Facilitated Health Insurance Exchanges

and obtain updated information on the evolving decisions related to 

federal and state activities in specific areas.

To describe the status of federal and state actions taken and planned for 

FFEs and the data hub, we examined planning documents used by CMS 

to track the implementation of key activities to be conducted by the 

federal government to establish FFEs and the data hub. In particular, we 

reviewed a February 22, 2013, timeline used by CMS to track the 

activities that remained to be completed before the implementation of the 

exchanges. In addition, we developed a data collection instrument for 

CMS to complete about its key activities underway or planned for 

establishing the FFEs. The instrument asked CMS to provide information 

on the percent of each activity that it had completed, the expected or 

actual completion date, and a description of key activities completed and 

remaining to be completed. For those FFEs where states chose to 

participate in a partnership exchange, we examined the activities they 

agreed to perform as a requirement of their conditional approval from 

CMS. We examined those activities and targeted completion dates that 

were reported in the conditional approval letters issued from December 

2012 through March 2013. CMS later provided us with an update on the 

status of certain of these activities as of April 24, 2013. We also 

interviewed CMS officials to understand CMS’s plans for establishing 

FFEs and, in early May, obtained updated information on the status of 

key federal activities. We discussed with CMS other activities generally 

related to exchanges that the agency may have to perform if states 

planning to operate a state-based exchange or participate in a 

partnership exchange decide not to or are unable to perform as planned. 

To provide an overview of the status of CMS’s development and 

implementation of the data hub, we reviewed project management 

documentation, such as plans, schedules, and technical documentation 

describing the data hub’s functionality. We also assessed project 

management documents that described the extent to which CMS had 

completed steps towards implementing the data hub, such as evidence of 

test results and project milestone reviews. When examining the actions 

taken by the federal government and states, we relied largely on 

information and documents provided to us by CMS regarding the status of 

the exchanges—including information CMS developed based on its 

contacts and information exchanges with states—and did not interview or 

collect information directly from states.

To describe CMS spending to support establishment of FFEs and the 

data hub, we requested data from CMS on the sources of funding for 

activities conducted for the purpose of establishing the FFEs and the data 
 

Page 5 GAO-13-601 Federally Facilitated Health Insurance Exchanges

hub, including activities carried out by contractors, and the total amount of 

such funding obligated or expected to be obligated through fiscal year 

2013. We received data from CMS on obligations for contracts and 

interagency agreements from fiscal year 2010 through March 31, 2013, to 

assist in the development and operation of the FFEs and the data hub

and carry out certain other exchange-related activities.

8

We conducted this performance audit from February 2013 through June 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

CMS provided 

the total amounts obligated, the appropriations account to which the 

obligations were charged, a brief description of the projects, and the 

contractors or other recipients of funds. CMS officials said the data do not 

include CMS staff salaries and other administrative expenses, which are 

not tracked specifically for the FFEs and the data hub. In addition, the 

data do not include obligations for grants CMS awarded to states to assist 

in the establishment of FFEs. We performed data reliability checks, such 

as checking the data for obvious errors and examining the actions taken 

by CMS to ensure its reliability. We determined that these data were 

sufficiently reliable for the purpose of this report.

Exchanges are intended to allow eligible individuals to obtain health 

insurance, and all exchanges, whether state-based or established and 

operated by the federal government, will be required to perform certain 

functions. The federal government’s role with respect to an exchange for 

any given state is dependent on the decisions of that state.

PPACA required that exchanges be established in each state to allow 

consumers to compare health insurance options available in that state 

and enroll in coverage. Once exchanges are established, individual 

consumers will be able to access the exchange through a website, toll-

 

8

CMS indicated that certain of these obligations supported activities, such as state 

oversight, financial management, and risk adjustment model development, in which CMS 

would have engaged in even if all states planned to operate their own exchange in 2014. 

Background 

Overview of Exchanges
 

Page 6 GAO-13-601 Federally Facilitated Health Insurance Exchanges

free call centers, or in person. The exchanges will present qualified health 

plans (QHP) approved by the exchange and offered in the state by the 

participating issuers of coverage.9 The benefits, cost-sharing features, 

and premiums of each QHP are to be presented in a manner that 

facilitates comparison shopping of plans by individuals. Once individuals 

wish to select a QHP, they will complete an application—through the 

exchange website, over the phone, in person, or by mailing a paper 

form—that collects the information necessary to determine their eligibility 

to enroll in a QHP.10 On the basis of the application, the exchange will 

determine individuals’ eligibility for enrollment in a QHP, and also 

determine their eligibility for income-based financial subsidies—advance 

payment of premium tax credits and cost-sharing subsidies11

To undertake these functions, all exchanges, including those established 

and operated by the federal government, will be required to perform 

—to help pay 

for that coverage. Also at the time of the application, the exchange will 

determine individuals’ eligibility for Medicaid and CHIP. After an individual 

has been determined to be eligible for enrollment in a QHP, the individual 

will be able to use tools on the exchange website to compare plans and 

make a selection. For individuals applying for enrollment in a QHP and for 

income-based financial subsidies, eligibility determinations and 

enrollment should generally occur on a near real-time basis, to be 

accomplished through the electronic transfer of eligibility information 

between the exchange and federal and state agencies, and through the 

electronic transfer of enrollment data between the exchange and QHP 

issuers. Assistance with the enrollment process will be provided to 

individuals either through the website, an established telephone call 

center, or in person.

 

9

The QHPs offered through the exchanges are required to meet certain benefit design, 

consumer protection, and other standards.

10To be eligible to enroll in a QHP through an exchange, an individual must be a U.S. 

citizen or a legal immigrant who is not incarcerated and must reside in the state in which 

the exchange operates.

11Premium tax credits and cost-sharing subsidies were authorized by PPACA to help 

certain individuals and families with incomes between 100 percent and 400 percent of the 

federal poverty level pay for exchange coverage. To qualify for these income-based 

financial subsidies, individuals must also meet the criteria for eligibility for enrollment in a 

QHP and not be eligible for other health insurance coverage that meets certain standards.

PPACA, § 1401(a), 124 Stat. at 213; 26 C.F.R. § 1.36(B)-2(a)(1). 
 

Page 7 GAO-13-601 Federally Facilitated Health Insurance Exchanges

certain activities, many of which fall within the core functions of eligibility 

and enrollment, plan management, and consumer assistance.

• Eligibility and enrollment: All exchanges will be required to 

determine an individual’s eligibility for QHP enrollment, income-based 

financial subsidies, and enrollment in Medicaid and CHIP.12

 

12Rather than make an official eligibility determination for Medicaid and CHIP, an 

exchange may transmit the information to the appropriate state agency for a final eligibility 

determination and, if applicable, enrollment into Medicaid or CHIP. Exchanges are also 

required to redetermine the eligibility of an enrollee in a QHP on an annual basis. For 

example, the exchange is to reexamine information about income and family size for 

enrollees who apply for insurance affordability programs, such as Medicaid, CHIP, and 

income-based financial subsidies.

Exchanges will be required to enroll eligible individuals into the 

selected QHP or transmit information for individuals eligible for 

Medicaid or CHIP to the appropriate state agency to facilitate 

enrollment in those programs. The exchange is to use a single, 

streamlined enrollment eligibility system to collect information from an 

application and verify that information. CMS is building the data hub to 

support these efforts. The data hub is intended to provide data 

needed by the exchanges’ enrollment eligibility systems to determine 

each applicant’s eligibility. Specifically, the data hub will provide one 

electronic connection and near real-time access to the common 

federal data, as well as provide access to state and third party data 

sources needed to verify consumer application information. For 

example, the data hub is to verify an applicant’s Social Security 

number with the Social Security Administration (SSA), and to access 

the data from the Internal Revenue Service (IRS) and the Department 

of Homeland Security (DHS) that are needed to assess the applicant’s 

income, citizenship, and immigration status. The data hub is also 

expected to access information from the Veterans Health 

Administration (VHA), Department of Defense (DOD), Office of 

Personnel Management (OPM), and Peace Corps to enable 

exchanges to determine if an applicant is eligible for insurance 

coverage from other federal programs that would make them ineligible 

for income-based financial subsidies. In states in which an FFE will 

operate, the hub is also expected to access information from state 

Medicaid and CHIP agencies to identify whether FFE applicants are 

already enrolled in those programs.
 

Page 8 GAO-13-601 Federally Facilitated Health Insurance Exchanges

• Plan management: Exchanges will be required to develop and 

implement processes and standards to certify health plans for 

inclusion as QHPs and recertify or decertify them, as needed.13

• Consumer assistance: All exchanges will be required to provide a 

call center, website, and in-person assistance to support consumers 

in filing an application, obtaining an eligibility determination, 

comparing coverage options, and enrolling in a QHP.

As 

part of these processes, the exchange must develop an application for 

issuers of health coverage that seek to offer a QHP. The exchange 

must review a particular plan’s data to ensure it meets certification 

standards for inclusion in the exchange as a QHP. The exchange 

must also conduct ongoing oversight and monitoring to ensure that 

the plans comply with all applicable regulations.

14 Other 

consumer assistance function activities that exchanges must conduct 

are outreach and education to raise awareness of and promote 

enrollment in QHPs and income-based financial subsidies. One such 

form of consumer assistance required by PPACA is the establishment 

of Navigators—entities, such as community and consumer-focused 

nonprofit groups, to which exchanges award grants to provide fair and 

impartial public education regarding QHPs, facilitate selection of

QHPs, and refer consumers as appropriate for further assistance.15

The role of the federal government with respect to an exchange for a 

state is dependent on whether that state seeks to operate a state-based 

exchange. States can choose to establish exchanges as directed by 

PPACA and seek approval from CMS to do so. States electing to 

establish and operate a state-based exchange in 2014 were required to 

 

13An exchange may initially certify a plan as a QHP if the plan meets the required 

minimum criteria and if the exchange determines that it is in the best interest of qualified 

individuals to have such a plan available. The annual recertification process, at a 

minimum, must include a review of the general certification criteria and must be completed 

on or before September 15 of the applicable calendar year. The exchange must also have 

the ability to decertify a plan at any time if the exchange determines that the QHP no 

longer meets the certification requirements.

14In general, exchanges are required to provide in-person assistance only for the purpose 

of assisting individuals to complete an application. However, exchanges operating as part 

of a partnership exchange will be required to offer more robust in-person assistance 

programs.

15PPACA, §1311(i), 124 Stat. at 180.

Federal and State Roles in 

Exchanges
 

Page 9 GAO-13-601 Federally Facilitated Health Insurance Exchanges

submit to CMS, by December 14, 2012, a declaration of intent and the 

“Blueprint for Approval of Affordable State-based and State Partnership 

Insurance Exchange.” Through this Blueprint, the state attests to how its 

exchange meets, or will meet, all legal and operational requirements 

associated with a state-based exchange. For example, the state must 

demonstrate that it will establish the necessary legal authority and 

governance, oversight, financial-management processes, and the core 

exchange functions of eligibility and enrollment, plan management, and 

consumer assistance.16 Although a state assumes responsibility for the 

exchange when it elects to operate a state-based exchange, it can 

choose to rely on the federal government for certain exchange-related 

activities, including determining individuals’ eligibility for income-based 

financial subsidies and activities related to reinsurance and risk 

adjustment.

17

Under PPACA, if a state did not elect to establish a state-based exchange 

or is not approved by CMS to operate its own exchange, then CMS is 

required to establish and operate an FFE in that state. Although the 

federal government retains responsibility to establish and operate each 

FFE, CMS has identified possible ways that states may assist it in the 

day-to-day operation of these exchanges:

In addition, CMS will make financial subsidy payments to 

issuers on behalf of enrollees in all exchanges.

• CMS indicated that a state can choose to participate in an FFE 

through a partnership exchange by assisting CMS with the plan 

 

16For each activity in the Blueprint, the state must attest to either the completion of the 

activity or its expected completion and provide a timeline and work plan. Depending on the 

activity, the state may also be required to provide supporting documentation. 

17The regulations implementing PPACA allow state-based exchanges meeting certain 

requirements to rely on HHS’s determinations of eligibility for income-based subsidies. 

PPACA and implementing regulations provide for states, regardless of whether they are 

establishing an exchange, to create a transitional reinsurance program for 2014 through 

2016 to help stabilize premiums for coverage in the individual market. HHS will establish a 

reinsurance program for any state that fails to establish this program. PPACA and 

implementing regulations also provide that, beginning with the 2014 benefit year, states 

electing to operate a state-based exchange may establish a permanent risk adjustment 

program for all nongrandfathered plans in the individual and small-group markets both 

inside and outside of the exchanges. HHS will establish this risk adjustment program for 

any state that will have an FFE, including a partnership exchange, or for states operating 

a state-based exchange but that do not elect to administer the risk adjustment program. 

These risk-spreading mechanisms are designed to mitigate the potential effect of adverse 

selection and provide stability for health insurance issuers in the individual and smallgroup markets.
 

Page 10 GAO-13-601 Federally Facilitated Health Insurance Exchanges

management function, consumer assistance function, or both. 

According to CMS, the overall goal of a partnership exchange is to 

enable the FFE to benefit from efficiencies to the extent states have 

regulatory authority and capability to assist with these functions, help 

tailor the FFE to that state, and provide a seamless experience for 

consumers. The agency also noted that a partnership exchange can 

serve as a path for states toward future implementation of a statebased exchange.18

• CMS indicated in guidance issued on February 20, 2013, that an FFE 

state choosing not to submit a Blueprint application for a partnership 

exchange by the February 15, 2013, deadline could still choose to 

assist it in carrying out the plan management function on a day-to-day 

basis.

Although the states would assist in carrying out 

the plan management function, consumer assistance function, or both 

on a day-to-day basis, CMS would retain responsibility for these and 

all other FFE functions. For example, for plan management, states 

would recommend QHPs for certification, and CMS would decide 

whether to approve the states’ recommendations and, if so, 

implement them. In the case of consumer assistance, states would 

manage an in-person assistance program and Navigators and may 

choose to conduct outreach and education activities. However, CMS 

would be responsible for awarding Navigator grants and training 

Navigators, and would operate the exchange’s call center and 

website. By February 15, 2013, states seeking to participate in a 

partnership exchange had to submit a declaration letter and Blueprint 

to CMS regarding expected completion dates for key activities related 

to their participation.

19

 

18Through regulation, CMS has outlined a process for states, regardless of whether they 

participate in a partnership exchange, to seek approval to establish a state-based 

exchange after 2014. See 45 C.F.R. § 155-106.

CMS officials said that, operationally, the plan management 

functions performed by these states will be no different than the 

functions performed by partnership exchange states. Instead of a 

Blueprint application, states interested in participating in this 

alternative type of arrangement had to submit letters attesting that the 

19For the purposes of this report, we only refer to partnership states as those that have 

been conditionally approved to participate in partnership exchanges.
 

Page 11 GAO-13-601 Federally Facilitated Health Insurance Exchanges

state would perform all plan management activities in the Blueprint 

application.20

• Even in states in which CMS will operate an FFE without a state’s 

assistance, CMS plans to rely on states for certain information. For 

example, it expects to rely on state licensure of health plans as one 

element of its certification of a QHP.

21

After a state submits an application to operate a state-based exchange or 

participate in a partnership exchange, CMS may approve or conditionally 

approve the state for that status. Conditional approval indicates that the 

state had not yet completed all steps necessary to carry out its 

responsibilities in a state-based exchange or partnership exchange, but 

its exchange is expected to be ready to accept enrollment on October 1, 

2013. To measure progress towards completing these steps, CMS 

officials indicated that the agency created a set of typical dates for when 

specific activities would need to be completed in order for the exchanges 

to be ready for the initial enrollment period. The agency then adapted 

those dates for each state establishing a state-based exchange or 

participating in a partnership exchange. The agency officials said that if 

the state indicated in its Blueprint that it planned to complete an activity 

earlier than CMS’s typical targeted completion date, CMS accepted the 

state’s earlier date. If the state proposed a date that was later than CMS’s 

typical targeted completion date, the state had to explain the difference 

and CMS determined whether that date would allow the exchange to be 

ready for the initial enrollment period. The agency indicated that a state’s 

conditional approval continues as long as it conducts the activities by the 

target dates agreed to with the individual state and demonstrates its 

ability to perform all required exchange activities.

 

20CMS officials said that they considered whether to offer FFE states this type of 

arrangement for other functions. However, they noted that there are differences between 

plan management and consumer assistance that made the plan management function a 

better candidate for such an arrangement. In particular, they said that many elements of 

the plan management function are similar to those activities that states traditionally 

engage in as part of their role as an insurance regulator. Therefore, according to these 

officials, these states would not have to take many additional steps or incur large financial 

obligations to assist with an FFE’s plan management function. They said that, in contrast, 

consumer assistance is more resource-intensive for the state.

21CMS indicated that it is coordinating with FFE states to ensure that CMS oversight 

efforts do not duplicate state efforts.
 

Page 12 GAO-13-601 Federally Facilitated Health Insurance Exchanges

CMS’s role in operating an exchange in a particular state may change for 

future years if states reassess and alter the roles they play in establishing 

and operating exchanges. For example, a state may be approved to 

participate in a partnership exchange in 2014 and then apply, and receive 

approval, to run a state-based exchange in 2015. Although the federal 

government would retain some oversight over the state-based exchange, 

the responsibility for operating the exchange would shift from the federal 

government to the state.

HHS indicated that it has drawn from several different appropriations to 

fund CMS activities to establish and operate FFEs and the data hub. 

These include the Health Insurance Reform Implementation Fund,22

HHS’s General Departmental Management Account, and CMS’s Program 

Management Account.23 HHS also indicated that it plans to use funds 

from the Prevention and Public Health Fund and the agency’s 

Nonrecurring Expenses Fund to pay for certain exchange activities in 

2013.24

 

22Congress established the $1 billion Health Insurance Reform Implementation Fund for 

administrative expenses associated with carrying out PPACA. HCERA, § 1005, 124 Stat. 

at 1036.

Specifically, the agency plans to use these funds for activities that 

will assist with eligibility determinations and activities to make people 

23The HHS General Departmental Management Account supports those activities 

associated with the Secretary’s roles as chief policy officer and general manager of HHS 

in administering and overseeing the organization, programs, and activities of HHS. The 

CMS Program Management Account supports the agency’s administration of programs 

under its management.

24PPACA established the Prevention and Public Health Fund to fund programs authorized 

by the Public Health Service Act, for prevention, wellness, and public health activities 

including prevention research, health screenings, and initiatives, such as the Community 

Transformation grant program, the Education and Outreach Campaign Regarding 

Preventative Benefits, and immunization programs. PPACA, § 4002, 124 Stat. at 541. See 

GAO, Prevention and Public Health Fund: Activities Funded in Fiscal Years 2010 and 

2011, GAO-12-788 (Washington, D.C.: Sept. 13, 2012).

HHS’s Nonrecurring Expenses Fund is a no-year account that captures expired 

unobligated balances from discretionary accounts prior to cancellation. HHS may use the 

fund for nonrecurring expenses such as facilities infrastructure, information technology 

infrastructure, or other department-wide secretarial priorities. Amounts in the fund may be 

obligated only after the Committees on Appropriations of the House of Representatives 

and the Senate are notified of the planned use of funds. Pub. L. No. 110-161, § 223, 

121 Stat. 1844, 2188 (Dec. 26, 2007).

Funding for FFEs and the 

Data Hub
 

Page 13 GAO-13-601 Federally Facilitated Health Insurance Exchanges

aware of insurance options and enrollment assistance available to them.25

For fiscal year 2014, CMS has estimated that it will need almost $2 billion 

to establish and operate the FFEs. Specifically, the President’s fiscal year 

2014 budget requests $1.5 billion in appropriations for CMS’s Program 

Management Account for the implementation and operation of the 

exchanges. In addition to this amount, it estimated that $450 million in 

user fees will be collected from issuers of health coverage participating in 

the exchanges in fiscal year 2014 and credited to the Program 

Management Account.26

In addition to these sources of funding, the agency also awarded grants 

with funds appropriated under section 1311 of PPACA to states in which 

an FFE will operate for activities related to the FFE. These include the 

plan management and consumer assistance activities that certain states 

will undertake on behalf of the FFE, as well as the development of state 

data systems to coordinate with the FFE.

According to the agency, these funds will be 

used for activities related to operation of the exchanges, including 

eligibility and enrollment, consumer outreach, plan oversight, SHOP and 

employer support, information-technology systems, and financial 

management.

27

 

25This report does not discuss spending by other agencies to support the exchanges. For 

example, HHS announced on May 9, 2013, that the Health Resources and Services 

Administration would award approximately $150 million to community health centers to 

provide in-person assistance to enroll uninsured individuals into health insurance 

coverage through an exchange, Medicaid, or CHIP. In addition, in June 2012, we reported 

that IRS planned to spend $881 million through fiscal year 2013 to help implement the 

exchanges and other PPACA provisions, of which $521 million was to come from HHS’s 

Health Insurance Reform Implementation Fund. See GAO, Patient Protection and 

Affordable Care Act: IRS Managing Implementation Risks, but Its Approach Could be 

Refined, GAO-12-690 (Washington, D.C.: June 13, 2012). 

26CMS indicated that it will collect user fees from issuers participating in FFE and 

partnership exchanges beginning in January 2014 to support exchange operations. 

PPACA requires that exchanges be self-sustaining by 2015, and allows exchanges to 

charge assessments, collect user fees, or to otherwise generate funding to support 

ongoing operations. PPACA, § 1311(d)(5), 124 Stat. at 177-78.

27Section 1311 appropriates an amount necessary to enable HHS to make awards to 

states for activities related to establishing exchanges. For more information on the 

amounts awarded to each state and their use, see GAO, Patient Protection and Affordable 

Care Act: HHS’s Process for Awarding and Overseeing Exchange and Rate Review 

Grants to States, GAO-13-543 (Washington, D.C.: May 31, 2013). 
 

Page 14 GAO-13-601 Federally Facilitated Health Insurance Exchanges

CMS expects to operate an FFE in 34 states in 2014. States are expected 

to assist with certain day-to-day functions in 15 of these FFEs. However, 

the precise activities that CMS and the states will perform have not been 

finalized and may continue to evolve.

For 2014, CMS will operate the exchange in 34 states, although it expects 

that states will assist in carrying out certain activities in almost half of 

those exchanges. As of May 2013, 17 states were conditionally approved 

by CMS to establish state-based exchanges. CMS granted conditional 

approval to these states in letters issued from December 2012 to January 

2013. CMS is required to operate an FFE in the remaining 34 states. 

While CMS will retain full authority over each of these 34 FFEs, it plans to 

allow 15 of the states to assist it in carrying out certain exchange 

functions. Specifically, as of May 2013, CMS granted 7 FFE states 

conditional approval to participate in a partnership exchange. CMS issued 

these conditional approval letters from December 2012 to March 2013. Of 

the 7 partnership exchange states, 6 (Arkansas, Delaware, Illinois, 

Michigan, New Hampshire, and West Virginia) indicated that they planned 

to assist with both the plan management and consumer assistance 

functions of the exchange and 1 (Iowa) indicated that it would only assist 

with the plan management function. In an alternate arrangement, CMS 

plans to allow the other 8 of these 15 FFE states (Kansas, Maine, 

Montana, Nebraska, Ohio, South Dakota, Utah, and Virginia) to assist 

with the plan management function.28

 

28CMS conditionally approved Utah to operate a state-based exchange in January 2013. 

However, on May 10, 2013, CMS indicated that, in response to Utah’s request to operate 

only its SHOP as a state-based exchange and to have CMS operate its individual 

exchange, the agency would issue a proposed rule that, if finalized, would permit Utah to 

adopt this approach. On June 14, 2013, CMS released this proposed rule, which will be 

published in the Federal Register on June 19, 2013.

In the remaining 19 FFE states, 

CMS plans to operate all functions of an FFE without states’ assistance 

for plan year 2014. (See fig. 1 for a map of exchange arrangements for 

2014.)

CMS Expects to 

Operate an Exchange 

in Most States, but 

Planned CMS and 

State Exchange 

Activities Continue to 

Evolve 

CMS Expects to Operate 

FFEs, including 

Partnership Exchanges, in 

34 States in 2014
 

Page 15 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Figure 1: Health Insurance Exchange Arrangements for 2014, as of May 10, 2013

a

Iowa planned to assist with the plan management function, and not the consumer assistance 

function.

b

On May 10, 2013, CMS indicated that it intended that Utah would operate a state-based Small 

Business Health Options Program (SHOP) exchange, but the individual exchange would be an FFE, 

for which Utah would assist with plan management.
 

Page 16 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Some states also informed CMS of whether or not they chose to carry out 

certain other activities related to the exchanges.29 First, CMS officials said 

that all states with an FFE are to notify CMS whether or not their relevant 

state agencies will determine the Medicaid/CHIP eligibility for individuals 

who submit applications to the FFE or if the states will delegate this 

function to the FFE.

30 As of May 2, 2013, CMS officials indicated that 

none of the 34 FFE states had notified CMS as to whether they would 

conduct Medicaid/CHIP eligibility determinations rather than delegate this 

responsibility to CMS. CMS officials indicated that states do not have a 

deadline for notifying CMS of their decisions on this area, but would have 

to do so before initial enrollment on October 1, 2013. Second, states 

notified CMS as to whether they would operate a transitional reinsurance 

program.31

 

29Although not specifically related to exchange operation, states are also informing CMS 

whether they are enforcing, or plan to enforce, new health insurance market reforms 

enacted under PPACA. Some of these reforms, including a provision prohibiting lifetime 

limits on the dollar value of benefits provided under a group or individual health plan, are 

already in effect; others, including a provision prohibiting issuers of group and individual 

health coverage from denying coverage or charging higher premiums because of 

preexisting conditions, do not take effect until 2014. These provisions apply whether a 

plan is offered on an exchange or outside of an exchange. States were asked to notify 

CMS whether they would enforce PPACA’s health insurance market reforms. As required 

under a 1999 rule implementing the Health Insurance Portability and Accountability Act of 

1996, CMS is required to enforce these and other health insurance market regulations 

under the Public Health Service Act in states that do not have authority to enforce them or 

otherwise fail to enforce them. CMS indicated that, as of April 8, 2013, 11 states notified 

CMS that they do not have the authority to enforce or are not otherwise enforcing PPACA 

insurance market provisions, leaving CMS to assume an enforcement role. CMS officials 

indicated that there is no deadline for this notification, but a notification is required of all 

states.

CMS indicated that for plan year 2014, two state-based 

exchange states—Connecticut and Maryland—notified CMS that they 

would each operate a transitional reinsurance program, leaving CMS to 

operate programs in the remaining 49 states.

30Even in those states in which the relevant state agencies will retain responsibility for 

determining QHP applicant eligibility for Medicaid and CHIP, the exchanges must have the 

capacity to screen QHP applicants for potential Medicaid and CHIP eligibility.

31PPACA and implementing regulations provide for states, regardless of whether they are 

establishing an exchange, to create a transitional reinsurance program for 2014 through 

2016 to help stabilize premiums for coverage in the individual market. HHS will establish a 

reinsurance program for any state that fails to establish this program.
 

Page 17 GAO-13-601 Federally Facilitated Health Insurance Exchanges

The activities that CMS and the states each plan to carry out to establish 

the exchanges have evolved recently. CMS was required to certify or 

conditionally approve any 2014 state-based exchanges by January 1, 

2013.32

The specific activities CMS will undertake in each of the state-based and 

partnership exchanges may continue to change if states do not make 

adequate progress toward completion of their required activities. When 

CMS granted conditional approval to states, it was contingent on states 

meeting several conditions, such as obtaining authority to undertake 

exchange activities and completing several required activities by specified 

target dates. For example, in April 2013, CMS officials indicated that 

Michigan—a state that had been conditionally approved by CMS in March 

to participate in a partnership exchange—had not been able to obtain 

passage of legislation allowing the state to use federal grant funds to pay 

for exchange activities, which had been a requirement of its conditional 

approval. As of May 2, 2013, CMS officials expected that Michigan would 

remain a partnership exchange state, but indicated that Michigan may not 

CMS extended application deadlines leading up to that date to 

provide states with additional time to determine whether they would 

operate a state-based exchange. On November 9, 2012, CMS indicated 

that in response to state requests for additional time, it would extend the 

deadline for submission of the Blueprint application for states that wished 

to operate state-based exchanges in 2014 by a month to December 14, 

2012. The agency noted that this extension would provide states with 

additional time for technical support in completing the application. At the 

same time, the agency extended the application deadline for states 

interested in participating in a partnership exchange by about 3 months to 

February 15, 2013. In addition, the option for FFE states to participate in 

an alternative arrangement to provide plan management assistance to the 

FFE was made available to states by CMS in late February. CMS did not 

provide states with an explicit deadline for them to indicate their intent to 

participate in this arrangement, but CMS officials said April 1, 2013, was a 

natural deadline because issuers of health coverage had to know by then 

to which entity—CMS or the state—to submit health plan data for QHP 

certification.

 

32There was no statutory deadline for approvals of partnership exchanges, as such 

exchanges were not specifically identified in PPACA.

Planned CMS and State 

Activities to Establish 

Exchanges Have Evolved 

Recently and May 

Continue to Change
 

Page 18 GAO-13-601 Federally Facilitated Health Insurance Exchanges

be able to conduct consumer assistance without funding authority.33 They 

noted, however, that a final decision about Michigan’s responsibilities had 

not been determined. In addition, on May 10, 2013, CMS indicated that it 

intended to allow Utah’s exchange, which was conditionally approved as 

a state-based exchange in January 2013, to now be an FFE.34

Agency officials indicated that they are working with each state to develop 

mitigation strategies to ensure that all applicable exchange functions are 

operating in each state on October 1, 2013. CMS officials said that they 

are assessing the readiness of each state as interim deadlines approach. 

For example, issuers began submitting applications to exchanges for 

QHP certification on April 1, 2013. Therefore, CMS officials said that they 

began assessing state readiness for this activity in March 2013. They also 

indicated that CMS is doing this kind of assessment for each state as 

deadlines approach for other functions—such as eligibility and enrollment, 

and consumer assistance. If a state is not ready to carry out a specific 

responsibility, CMS officials said the agency will support them in this area. 

As of May 2, 2013, CMS had not granted final approval to any state to 

operate a state-based exchange or participate in a partnership exchange. 

If any state conditionally approved to operate a state-based exchange or 

to participate in a partnership exchange does not adequately progress 

towards implementation of all required activities, CMS has indicated that it 

would carry out more exchange functions in that state. CMS officials 

indicated that exchanges receiving this assistance would retain their 

status as a state-based or partnership exchange.

Officials 

indicated that final approval for state-based and partnership exchanges 

will not be granted until the states have succeeded in completing required 

activities, and that some of these exchanges may still be under 

conditional approval when enrollment begins on October 1, 2013.

 

33CMS officials noted that it is generally more resource intensive for states to implement 

consumer assistance activities than plan management activities, because, unlike plan 

management activities which are similar to traditional state insurance functions, consumer 

assistance is not a function in which states were previously engaged.

34CMS indicated that Utah still intended to operate its SHOP exchange as a state-based 

exchange and that the agency would issue a proposed rule that, if finalized, would permit 

this arrangement. On June 14, 2013, CMS released this proposed rule, which will be 

published in the Federal Register on June 19, 2013.
 

Page 19 GAO-13-601 Federally Facilitated Health Insurance Exchanges

CMS has completed many activities necessary to establish FFEs and the 

data hub. The agency established targeted completion dates for the many 

activities that remain to be completed by the beginning of initial 

enrollment on October 1, 2013, and certain activities were behind 

schedule.

CMS issued numerous regulations and guidance that it has said are 

necessary to set a framework within which the federal government, 

states, issuers of health coverage, and others can participate in the 

exchanges. For example, in March 2012, the agency issued a final rule 

regarding implementation of exchanges under PPACA, and in February 

2013, it issued a final rule setting forth minimum standards that all health 

insurance issuers, including QHPs seeking certification on a state-based 

exchange or FFE, have to meet.35 The March 2012 rule, among other 

things, sets forth the minimum federal standards that state-based 

exchanges and FFEs must meet and outlines the process a state must 

follow to transition between types of exchanges. The February 2013 rule 

specifies benefit design standards that QHPs must meet to obtain 

certification.36 That rule also established a timeline for QHPs to be 

accredited in FFEs. CMS also issued a proposed rule related to the 

Navigator program on April 5, 2013.37 This rule proposes conflict of 

interest, training, and certification standards that will apply to Navigators 

in FFEs.38

 

3577 Fed. Reg. 18,310 (Mar. 27, 2012); 78 Fed. Reg. 12,834 (Feb. 25, 2013).

CMS officials expected to issue this final rule prior to initial 

enrollment. CMS officials indicated that before initial enrollment begins in 

October 2013, they would propose an additional rule that would set forth

exchange oversight and records retention requirements, among other 

36These standards also apply to health plans offered outside an exchange.

3778 Fed. Reg. 20,581 (Apr. 5, 2013). 

38These conflict of interest, training, and certification standards also will apply to other inperson assistance personnel whose activities are funded with federal exchange grants.

CMS Completed Many 

Activities to Establish 

FFEs and the Data 

Hub by the Beginning 

of Open Enrollment, 

Although Completion 

of Some Activities 

Was Behind Schedule 

CMS Issued Numerous 

Regulations and Guidance 

Necessary to Establish 

FFEs, and Made Progress 

in Each of the Core 

Exchange Functions and in 

Developing the Data Hub
 

Page 20 GAO-13-601 Federally Facilitated Health Insurance Exchanges

things. On June 14, 2013, CMS released this proposed rule, which will be 

published in the Federal Register on June 19, 2013.

CMS also issued guidance specifically related to the establishment of 

FFEs and partnership exchanges to assist states seeking to participate in 

a partnership exchange and issuers seeking to offer QHPs in an FFE, 

including a partnership exchange. For example, the agency issued 

general guidance on FFEs and partnership exchanges in May 2012 and 

January 2013, respectively. On April 5, 2013, the agency issued guidance 

to issuers of health coverage seeking to offer QHPs through FFEs or 

partnership exchanges.

In addition to establishing the basic exchange framework for state-based 

exchanges and FFEs, including partnership exchanges, CMS also 

completed activities needed to establish the core FFE functions—

eligibility and enrollment, including the data hub; plan management; and 

consumer assistance. (See table 1.)

Table 1: Examples of Activities Completed by CMS to Establish Federally Facilitated Exchanges (FFE), Including Partnership 

Exchanges

Core exchange function Activities

Eligibility and enrollment • In late January 2013, CMS released a draft of the online and paper applications that consumers 

will use to apply for health care coverage in the exchanges. Following a public comment period, 

the agency issued the final application on April 30, 2013, as planned.

• CMS indicated that, since May 2012, it has consulted with, received feedback from, and provided 

training to issuers of health coverage on the eligibility and enrollment process standards for the 

exchanges.

• According to agency officials, CMS has completed many of the activities required to support 

eligibility and enrollment data verification through the development and implementation of the data 

hub. These activities include, among other things, establishing connections with and access to 

data from federal and state systems, and testing of certain functionalities internal to CMS.

Plan management • CMS indicated that it completed development of the information- technology systems necessary 

for it to carry out the plan management function, such as to collect plan data and certify qualified 

health plans (QHP).

• CMS contracted with a vendor to help the agency certify QHPs that will be offered in FFEs, 

including partnership exchanges.a Officials said that the contractor will review plan data, perform 

quality-assurance checks, and help CMS determine whether issuers applying for QHP certification 

are in full compliance with Patient Protection and Affordable Care Act (PPACA) requirements.
 

Page 21 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Core exchange function Activities

Consumer assistance • In 2010, CMS awarded Consumer Assistance Program grants to 36 states and 4 territories,b

including 23 states with FFEs, in 2010. Although the grants were not for activities specific to the 

exchanges, CMS has indicated that grantees must collect data on consumer inquires and 

complaints to help the agency identify problems in the private insurance marketplace (both inside 

and outside the FFEs) and strengthen enforcement. Starting in 2014, programs must also help 

resolve problems with premium credits for exchange coverage and receive referrals from 

Navigators for QHP enrollees who have concerns about their coverage.

• CMS awarded a contract to a private vendor on February 28, 2013, for the development of training 

and quality-assurance metrics for the call center that will assist consumers who use the 

exchanges.

• CMS provided information to consumers about health care insurance and the operation of FFEs 

through its website, healthcare.gov.

Source: CMS.

Notes: Some of these activities also support the establishment of state-based exchanges. For 

example, Consumer Assistance Program grants were awarded to 13 states with state-based 

exchanges.

a

In FFEs where the state will assist with the plan management function, the state will review plan data 

and make recommendations for certification to CMS.

b

PPACA appropriated $30 million to the Secretary of Health and Human Services for the award of 

federal grants to states to establish, expand, or provide support for offices of health insurance 

consumer assistance or health insurance ombudsmen programs. PPACA, § 1002, 124 Stat. at 138. 

Consumer Assistance Program grants are to be used to assist consumers with filing health coverage 

complaints and appeals, assist consumers with enrollment into health coverage, and educate 

consumers on their rights and responsibilities with respect to such coverage. According to CMS, as of 

June 2013, there were Consumer Assistance Programs operating in 22 states and 1 territory.

CMS established timelines to track its completion of the remaining 

activities necessary to establish FFEs. CMS has many key activities 

remaining to be completed across the core exchange functions—eligibility 

and enrollment, including development and implementation of the data 

hub; program management; and consumer assistance. In addition, the 

agency established targeted completion dates for the required activities 

that states must perform in order for CMS to establish partnership 

exchanges in those states. However, the completion of certain activities 

was behind schedule.

CMS expects to complete development and testing of the information 

technology systems necessary for FFEs to determine eligibility for 

enrollment into a QHP and to enroll individuals by October 1, 2013, when 

enrollment is scheduled to begin for the 2014 plan year. As of April 2013, 

CMS indicated that it still needed to complete some steps to enable FFEs 

to be ready to test development of key eligibility and enrollment functions, 

including calculation of advance payments of the premium tax credits and 

cost-sharing subsidies, verification of consumer income, and verification 

of citizenship or lawful presence. CMS indicated that these steps will be 

CMS Established Timelines 

for Completing the Many 

Activities That Remain, 

Although Some Activities 

Were Behind Schedule

Eligibility and Enrollment
 

Page 22 GAO-13-601 Federally Facilitated Health Insurance Exchanges

completed in July 2013. For one activity—the capacity to process 

applications and updates from applications and enrollees through all 

channels, including in-person, online, mail, and phone—CMS estimated 

that the system will be ready by October 1, 2013. CMS officials said that 

redeterminations of consumer eligibility for coverage will not occur until 

the middle of 2014.

Effective use of the FFEs’ eligibility and enrollment systems is dependent 

upon CMS’s ability to provide the data needed to carry out eligibility 

determination and enrollment activities through the implementation of the 

data hub. According to program officials, CMS established milestones for 

completing the development of required data hub functionality by July 

2013, and for full implementation and operational readiness by 

September 2013. Project schedules reflect the agency’s plans to provide 

users access to the hub for near real-time data verification services by 

October 1, 2013.

Agency officials stated that ongoing development and testing activities 

are expected to be completed to meet the October 1, 2013, milestone. 

Additionally, CMS has begun to establish technical, security, and data

sharing agreements with federal partner agencies and states, as required 

by department-level system development processes. These include

• Business Service Definitions (BSDs), which describe the activities, 

data elements, message formats, and other technical requirements 

that must be met to develop, test, and implement capabilities for 

electronically sharing the data needed to provide various services, 

such as income and Social Security number verification.

• Computer Matching Agreements, which establish approval for data 

exchanges between various agencies’ systems and define any 

personally identifiable information the connecting entity may access 

through its connection to the data hub; and

• Data Use Agreements, which establish the legal and program 

authority that governs the conditions, safeguards, and procedures 

under which federal or state agencies agree to use data.

For example, CMS officials stated that they established Data Use 

Agreements with OPM and the Peace Corps in April 2013 and completed 
 

Page 23 GAO-13-601 Federally Facilitated Health Insurance Exchanges

BSDs by mid-June.

39 Additionally, these officials plan to obtain final 

approval of Computer Matching Agreements with IRS, SSA, DHS, VHA, 

and DOD by July 2013.

40

CMS began conducting both internal and external testing for the data hub 

in October 2012, as planned. The internal testing includes software 

development and integration tests of the agency’s systems, and the 

external testing begun in October included secured communication and 

functionality testing between CMS and IRS. These testing activities were 

scheduled to be completed in May 2013. CMS has also begun to test 

capabilities to establish connection and exchange data with other federal 

agencies and the state agencies that provide information needed to 

determine applicants’ eligibility to enroll in a QHP or for income-based 

financial subsidies, such as advance premium tax credits and costsharing assistance, Medicaid, or CHIP. For example, CMS officials stated 

that testing with 11 states began on March 20, 2013, and with five more 

states in April. They also stated that, although originally scheduled to 

begin in April, testing with SSA, DHS, VHA and Peace Corps started early 

in May 2013 and that testing with OPM and DOD was scheduled to begin 

in July 2013. Additionally, CMS recently completed risk assessments and 

plans for mitigating identified risks that, if materialized, could negatively 

affect the successful development and implementation of the data hub.

While CMS stated that the agency has thus far met project schedules and 

milestones for establishing agreements and developing the data hub, 

several critical tasks remain to be completed before the October 1, 2013, 

implementation milestone. (See fig. 2). According to CMS officials and the 

testing timeline:

 

39According to CMS, the agency is required to establish Data Use Agreements only with 

OPM and the Peace Corps because these two entities provide batch files of data for 

processing data hub queries, which CMS stores in the data hub environment.

40According to CMS, Computer Matching Agreements are required for data exchanges 

between CMS and IRS, SSA, DHS, VHA, and DOD because information is transmitted 

from the data hub and matched against the other agencies’ records for use by the 

exchanges or Medicaid or CHIP agencies for use in eligibility determinations. The results 

of these matches are stored by the entity making the eligibility determination, but are not 

stored in the data hub environment.
 

Page 24 GAO-13-601 Federally Facilitated Health Insurance Exchanges

• Service Level Agreements (SLA) between CMS and the states, which 

define characteristics of the system once it is operational, such as 

transaction response time and days and hours of availability, are 

planned to be completed in July 2013;

• SLAs between CMS and its federal partner agencies that provide 

verification data are expected to be completed in July 2013; and

• Completion of external testing with all federal partner agencies and all 

states is to be completed by the beginning of September 2013.

Figure 2: Timeline for CMS Data Hub Activities to Be Completed Prior to Initial Enrollment, as of May 2013

The activities that remain for CMS to implement the plan management 

function primarily relate to the review and certification of the QHPs that 

will be offered in the FFEs. CMS has set time frames that it anticipates 

will allow it to certify and upload QHP information to the exchange 

website in time for initial enrollment. CMS indicated that its system for 

issuers of health coverage to submit applications for QHP certification 

was available by April 1, 2013, and issuers were to submit their 

applications by May 3, 2013.41

 

41The deadline was originally April 30, 2013. CMS officials indicated that, on April 30, 

2013, it pushed back the deadline for issuers to submit their applications to May 3, 2013.

Once received, CMS, with the assistance 

of its contractor, expects to evaluate and certify health plans as QHPs by 

July 31, 2013. CMS will then allow issuers to preview and approve QHP 

information that will be presented on the exchange website by August 26, 

Plan Management 
 

Page 25 GAO-13-601 Federally Facilitated Health Insurance Exchanges

2013. CMS then expects to finalize the QHP information and load it into 

the exchange website by September 15, 2013.

For those 15 FFEs for which states will assist with the plan management 

function, CMS will rely on the states to ensure the exchanges are ready 

by October 2013. In contrast to other FFE states in which CMS manages 

all aspects of the QHP application and certification process, these 

15 states were to evaluate health issuer plan applications to offer a QHP 

in the exchange and submit recommendations to CMS regarding the 

plans to be certified as QHPs. CMS indicated that the states are expected 

to submit their recommendations by July 31, 2013, which is also when 

CMS expects to complete its evaluation of QHPs for the other FFE 

states.42 (See fig. 3.)

 

42Seven of the 15 states submitted an application to CMS and were approved to assist 

with QHP certification and other plan management functions on the condition that they 

complete certain required activities by targeted completion dates. In contrast, an additional 

7 states were not required to submit an application and CMS officials indicated that the 

agency has no formal monitoring relationship with the states. Instead, CMS conducted a 

1-day review of these states in February and March to determine the states’ operational 

plans and capacity to assist with the plan management functions. The last state, Utah, 

was originally conditionally approved to operate a state-based exchange. On May 10, 

2013, CMS indicated that it intended to allow the exchange to instead operate as an FFE 

and the state attested that it would be able to assist with all aspects of the plan 

management function.
 

Page 26 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Figure 3: Timeline for Plan Management Activities to Be Completed by CMS and States for Federally Facilitated Exchanges 

(FFE) Prior to Initial Enrollment, as of May 2013

Note: The July 31, 2013, deadline for states to submit QHP certification recommendations to CMS 

applies to the 15 FFEs in which states agreed to assist with the plan management function. For the 

remaining 19 FFE states, issuers were to submit their QHP data to CMS by May 3, 2013.

CMS has yet to complete many activities related to consumer assistance 

and outreach, and some initial steps were behind schedule. Specifically, 

several steps necessary for the implementation of the Navigator program 

in FFEs have been delayed by about 2 months. CMS had planned to 

issue the funding announcement for the Navigator program in February 

2013 and have two rounds of awards, in June and September 2013. 

However, the announcement was delayed until April 9, 2013, and CMS 

officials indicated that there would be one round of awards, with an 

anticipated award date of August 15, 2013. CMS did not indicate the 

number of awards it expected to make, but noted that it expects that at 

least two types of applicants will receive awards in each of the 34 FFE 

states,

43

 

43CMS indicated that it would award up to $54 million to organizations and individuals in 

the 34 FFE states. It indicated that funds available for award would be allocated among 

states based on their numbers of uninsured, but at least $600,000 would be available 

for award in each state. Texas was allocated the largest share of funding for award, 

$8.2 million. CMS gave applicants until June 7, 2013, to submit their applications. Federal 

regulations require exchanges to award Navigator grants to at least two types of entities, 

including a community and consumer-focused nonprofit organization. 45 C.F.R. 

§ 155.210(c)(2).

and at least one will be a community or consumer-focused 

nonprofit organization. CMS officials indicated that, despite these delays, 

Consumer Assistance
 

Page 27 GAO-13-601 Federally Facilitated Health Insurance Exchanges

they planned to have Navigator programs operating in each FFE state by 

October 1, 2013.

Before any federally funded in-person assisters, including Navigators, can 

begin their activities, they will have to be trained and certified. For 

example, these individuals are required to complete an HHS-approved 

training program and receive a passing score on all HHS-approved 

certification exams before they are able to assist with enrollment 

activities.44

Each of the six partnership exchange states that CMS conditionally 

approved to assist with certain consumer assistance responsibilities plans 

to establish other in-person assistance programs that will operate in 

addition to Navigator programs in these states. The dates by which the 

states planned to release applications and select in-person assisters 

varied. (See fig. 4.) For example, according to the conditional approval 

letters, one partnership exchange state planned to select in-person 

assisters by March 1, 2013, to begin work by May 15, 2013, while another 

planned to make that selection by August 1, 2013, to begin work by 

September 1, 2013. Five of the states’ required activities indicated that 

they planned to add state-specific modules to the required federal training 

for Navigators and in-person assisters.

CMS officials said that the required training for Navigators will 

be web-based, and it is under development. According to CMS, the 

Navigator training will be based on the training content that is being 

developed for agents and brokers in the FFEs and partnership 

exchanges, which CMS indicates is near completion. In addition, CMS is 

developing similar web-based training for the state partnership exchange 

in-person assistance programs. While CMS had planned to begin 

Navigator training in July 2013, under its current plan, the agency will not 

have awarded Navigator grants by this date. CMS indicated that it plans 

to complete development of the training curriculum and certification exam 

in July or August 2013. CMS officials expected that the training would 

begin in the summer of 2013, following completion of the curriculum and 

exam.

 

44CMS officials indicated that the agency is considering allowing Navigators to assist with 

outreach activities prior to completing their training. They expected this issue to be 

addressed in the final Navigator rule.
 

Page 28 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Figure 4: Timeline for Navigator and In-Person Consumer Assistance Activities to Be Completed by CMS and States Prior to 

Initial Enrollment, as of May 2013

Note: Under the state implementation activities, each letter denotes a different partnership exchange 

state. Six of the seven partnership exchange states indicated that they planned to assist with the 

consumer assistance function. The dates listed were identified in the conditional approval letters that 

CMS sent to the partnership exchange states between December 2012 and March 2013.

As of April 24, 2013, CMS indicated that these six partnership exchange 

states had made progress, but the completion of some activities was 

behind schedule.45

 

45Michigan was conditionally approved by CMS to assist with the plan management and 

consumer assistance functions. However, CMS officials indicated that the state had not 

been able to obtain the legislative authority it needed to use federal grant funds to pay for 

exchange activities. Therefore, CMS officials indicated that Michigan may not be able to 

assist with the consumer assistance function. As of May 2, 2013, however, the state had 

not made a final determination about this responsibility.

For example, three states that had planned to release 

the applications to select in-person assisters by April 2013 had done so. 

While the deadline for most states to select in-person assisters had not 

passed as of April 24, 2013, there were delays for two states. One state 

that planned to select in-person assisters by March 15, 2013 delayed that 

deadline to May 30, 2013, while the other delayed it to June 15. CMS 

indicated that these delays are not expected to affect the implementation 

of these programs. However, the state now planning to complete 

selection by May 30, 2013, had originally planned to begin training 

assisters in March and begin work May 15, 2013. The second state had 

planned that in-person assisters would begin work August 1, 2013.
 

Page 29 GAO-13-601 Federally Facilitated Health Insurance Exchanges

CMS and states with partnership exchanges have also begun, and 

established time frames for, undertaking other outreach and consumer 

assistance activities that are necessary to implement FFEs. CMS 

recommended that in-person outreach activities begin in the summer of 

2013 to educate consumers in advance of the open enrollment period. 

Examples of key activities that remain to be completed include the federal 

call center, healthcare.gov website, media outreach, and the consumer 

complaint tracking system for the FFEs. While states with partnership 

exchanges will utilize the federal call center and website, they have 

established plans for undertaking other outreach and consumer 

assistance activities. (See table 2.)

Table 2: Other CMS and State Consumer Assistance and Outreach Activities to be Completed Prior to Initial Enrollment in the 

Federally Facilitated Exchanges (FFE), as of May 2013

Activity Implementation plans for CMS and partnership exchange states

Call center CMS CMS awarded the contract for operation of the call center on April 15, 2013, with the call 

center to begin operations by June 2013.

States Partnership exchange states will use the federal call center.

Healthcare.gov website CMS CMS planned to relaunch the healthcare.gov website in June 2013 to provide a greater 

focus on exchange enrollment. For example, the updated website will include checklists to 

help consumers prepare for enrollment in October.

States Partnership exchange states will use the federal website.

Media outreach CMS CMS planned to award a contract for English-language media outreach targeting FFEs in 

April 2013, and planned to award a contract for Spanish-language outreach by June 

2013. By August or September, the agency also planned to translate educational 

materials into 25 languages.

States Four partnership exchange states planned to begin their media and marketing campaigns 

by June or July 2013, and one planned to begin its campaign in December 2013.

Consumer complaint 

tracking system

CMS CMS plans that the system used by the FFE in states not assisting with consumer 

assistance activities will be available by the October 2013 initial enrollment date.

States Six partnership states identified various dates between February and October 2013 for 

their systems to become operational. As of April 24, 2013, CMS indicated that the 

February 2013 targeted completion date for one state had been revised to June 15, 2013.

Source: CMS.

Notes: CMS conditionally approved six partnership exchange states to assist with certain consumer 

assistance responsibilities.
 

Page 30 GAO-13-601 Federally Facilitated Health Insurance Exchanges

CMS data indicated that the agency spent almost $394 million from fiscal 

year 2010 through March 31, 2013, through contracts46 to complete 

activities to establish the FFEs and the data hub and carry out certain 

other exchange-related activities.

47

 

46In this report, we use the term “contract” to include contracts with private entities to carry 

out activities to establish the FFEs and the data hub, as well as certain other exchangerelated activities, task orders for such activities under contracts with private entities that 

may encompass a broader range of activities, and interagency agreements for such 

activities. References to CMS “spending” are to the amounts obligated under these 

contracts, task orders, and interagency agreements. This total also includes amounts 

obligated by HHS under contracts, task orders, and interagency agreements in fiscal 

years 2010 and 2011, before HHS transferred oversight of exchange implementation to 

CMS. An obligation is a definite legal commitment that will give rise to payment at some 

point in the future. An agency incurs an obligation, for example, when it awards a contract.

CMS officials said that these totals did 

not include CMS salaries and other administrative costs, but rather 

reflected the amounts obligated for contract activities. The majority of 

these obligations, about $248 million (63 percent), were incurred in fiscal 

year 2012. The sources of the $394 million in funding were three 

appropriation accounts: HHS’s General Departmental Management 

Account, CMS’s Program Management Account, and the Health 

Insurance Reform Implementation Fund. The majority of the funding 

came from the CMS Program Management Account (66 percent) followed 

by the Health Insurance Reform Implementation Fund (28 percent). (See 

fig. 5.)

47CMS indicated that certain of these contracts supported activities, such as state 

oversight, financial management, and risk adjustment model and development, in which 

CMS would have engaged even if all states planned to operate their own exchanges in 

2014.

CMS Spent Almost 

$394 Million through 

Contracts to Support 

Establishment of the 

FFEs and Data Hub 

and to Carry Out 

Certain Other 

Exchange-Related 

Activities as of March 

2013 
 

Page 31 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Figure 5: CMS Obligations for Contracts That Support the Establishment of 

Federally Facilitated Exchanges (FFE) and the Data Hub, by Appropriation Account, 

through March 31, 2013

Note: These totals include amounts obligated for contracts, task orders, and interagency agreements 

to complete activities to establish the FFEs and the data hub and carry out certain other exchangerelated activities. The totals also include some obligations incurred by HHS in fiscal years 2010 and 

2011, before HHS transferred oversight of exchange implementation to CMS.

a

For fiscal year 2013, the totals reflect amounts obligated only through March 31, 2013.

CMS reported that the almost $394 million supported 64 different types of 

projects through March 31, 2013. The highest volume of obligations 

related to the development of information technology systems for the 

FFEs. The 10 largest project types in terms of obligations made through 

March 31, 2013, accounted for $242.6 million, 62 percent of the total 

obligations. (See table 3.)
 

Page 32 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Table 3: CMS Obligations for Contracts That Support the Establishment of Federally Facilitated Exchanges (FFE) and the Data 

Hub by Largest Project Type, through March 31, 2013

CMS project type

Amount obligated 

(dollars)

Federally Facilitated Exchanges Information Technology $84,273,137

Federal Health Care Exchange Technical Assistance and Support 27,587,482

Federal Health Care Exchange Hub 24,732,087

Exchange Consumer Call Center 21,999,974

Small Business Health Options Program (SHOP) and Employer Support 17,112,098

Data Architectural Contract—Requirements Support, Enterprise Data & Design Support 

(Incorporated the Multidimensional Data Analytics System) 13,979,845

Exchanges State Grants, Technical Assistance, Oversight 13,910,068

Enterprise Project Management Operations 13,277,422

Federal Health Care Exchange Web Portal and Support 13,013,171

Exchange Plan Management, Support & Integration 12,716,744

Source: CMS.

Note: These totals include amounts obligated for contracts, task orders, and interagency agreements 

to complete activities to establish the FFEs and the data hub and carry out certain other exchangerelated activities. The totals also include some obligations incurred by HHS in fiscal years 2010 and 

2011, before HHS transferred oversight of exchange implementation to CMS.

These activities were carried out by 55 different contractors.48

 

48Other federal agencies, such as SSA and other HHS components, that conducted 

activities to support establishment of the FFEs and the data hub under interagency 

agreements, are included in the number of contractors. Through these interagency 

agreements, CMS obtained technical assistance and support to establish FFEs and 

support for administering the Navigator grants, among other activities.

Of these, 

10 contractors accounted for $303.4 million (77 percent of total 

obligations) for activities to support establishment of FFEs and the data 

hub and carry out certain other exchange-related activities. (See table 4.) 

Their contracts were for projects related to information technology, the 

healthcare.gov website, call center, and technical assistance for the 

FFEs. For one contract, with CGI Federal, CMS obligated about 

$88 million for activities to support establishment of the FFEs, such as 

information technology and technical assistance. For another contract, 

with Quality Software Services, Inc., CMS obligated about $55 million for 

related activities, including to support development of the data hub. (See 

app. I for each contract by the contractor, the amount obligated, the fiscal 

year in which funds were obligated, and the source of funding.)
 

Page 33 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Table 4: CMS Obligations for Contracts That Support Federally Facilitated Exchanges (FFE) and Data Hub Establishment by 

Largest Contractor, through March 31, 2013

Contractor Examples of activities 

Amount obligated 

(dollars)

CGI Federal Inc FFE information technology and healthcare.gov $87,997,938

Quality Software Services Inc Data hub 55,098,237

Booz Allen Hamilton Enrollment and eligibility planning and state grant technical assistance 37,737,550

National Government Services Inc Consumer call center and Small Business Health Options Program 

(SHOP) premium aggregations

31,590,846

The Mitre Corporation Project management and Information technology security 22,028,672

Logistics Management Institute Health plan management, rate analysis, and benefit package review 19,107,667

DEDE Inc DBA Genova Technology Information technology 16,026,915

Terremark Federal Group Cloud computing services 15,539,713

IDL Solutions Enterprise data and design support 9,342,512

Navigant Consulting Inc Outreach and collection activities 8,949,560

Source: CMS.

Note: These totals include amounts obligated for contracts, task orders, and interagency agreements 

to complete activities to establish the FFEs and the data hub and carry out certain other exchangerelated activities. The totals also include some obligations incurred by HHS in fiscal years 2010 and 

2011, before HHS transferred oversight of exchange implementation to CMS.

FFEs along with the data services hub services are central to the goal 

under PPACA of having health insurance exchanges operating in each 

state by 2014, and of providing a single point of access to the health 

insurance market for individuals. Their development has been a complex 

undertaking, involving the coordinated actions of multiple federal, state, 

and private stakeholders, and the creation of an information system to 

support connectivity and near real-time data sharing between health 

insurance exchanges and multiple federal and state agencies. Much

progress has been made in establishing the regulatory framework and 

guidance required for this undertaking, and CMS is currently taking steps 

to implement key activities of the FFEs, and developing, testing, and 

implementing the data hub. Nevertheless, much remains to be 

accomplished within a relatively short amount of time. CMS’s timelines 

and targeted completion dates provide a roadmap to completion of the 

required activities by the start of enrollment on October 1, 2013. However, 

certain factors, such as the still-unknown and evolving scope of the 

exchange activities CMS will be required to perform in each state, and the 

large numbers of activities remaining to be performed—some close to the 

start of enrollment—suggest a potential for implementation challenges 

going forward. And while the missed interim deadlines may not affect 

Concluding 

Observations 
 

Page 34 GAO-13-601 Federally Facilitated Health Insurance Exchanges

implementation, additional missed deadlines closer to the start of 

enrollment could do so. CMS recently completed risk assessments and 

plans for mitigating identified risks associated with the data hub, and is 

also working on strategies to address state preparedness contingencies. 

Whether CMS’s contingency planning will assure the timely and smooth 

implementation of the exchanges by October 2013 cannot yet be 

determined.

We received comments from HHS on a draft of this report (see app. II). 

HHS emphasized the progress it has made in establishing exchanges 

since PPACA became law, and expressed its confidence that on 

October 1, 2013, exchanges will be open and functioning in every state. 

HHS also provided technical comments, which we incorporated as 

appropriate.

We are sending copies of this report to the Secretary of Health and 

Human Services and other interested parties. In addition, the report will 

be available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have questions about this report, please contact 

John E. Dicken at (202) 512-7114 or dickenj@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix III.

John E. Dicken

Director, Health Care

Agency Comments
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 35 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Table 5 provides information on the amounts the Department of Health 

and Human Services’ (HHS) Centers for Medicare & Medicaid Services 

(CMS) obligated for contract activities to support the establishment of the 

federally facilitated exchanges (FFE) and the data hub and carry out 

certain other exchange-related activities by individual contractors.

1

Table 5: Contractors Supporting Establishment of the Federally Facilitated Exchanges (FFE) and Data Hub and Amounts 

Obligated, Fiscal Year 2010 through March 31, 2013

The 

funds were obligated from fiscal year 2010 through March 31, 2013. The 

information presented in this table was obtained from CMS. Due to the 

large number of contractors, we did not edit the information to correct 

typographical or grammatical errors, or clarify the information provided. 

We reprinted the abbreviations and acronyms provided by CMS.

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

A Reddix and 

Associates Inc

2012 Stake Holder Training, Program & Technical 

Assistance Support

$5,551,242 CMS Program 

Management Account

Acumen LLC 2011 Exchanges Payment & Financial Management 1,698,054 HHS General 

Departmental 

Management Account

Acumen LLC 2012 Financial Management & Operational Analytics 

Contract

675,000 CMS Program 

Management Account

Acumen LLC 2013 Financial Management & Operational Analytics 

Contract

21,141 CMS Program 

Management Account

Acumen LLC 2013 Financial Management & Operational Analytics 

Contract

750,729 CMS Program 

Management Account

Acumen LLC 2013 Financial Management & Operational Analytics 

Contract

1,645,133 CMS Program 

Management Account

 

1

CMS indicated that certain of these obligations supported activities, such as state 

oversight, financial management, and risk adjustment model and development, in which 

CMS would have engaged even if all states planned to operate their own exchanges in 

2014. In this report, we use the term “contract” to include contracts with private entities to 

carry out activities to establish the FFEs and the data hub, as well as certain other 

exchange-related activities, task orders for such activities under contracts with private 

entities that may encompass a broader range of activities, and interagency agreements for 

such activities. References to CMS “spending” are to the amounts obligated under these 

contracts, task orders, and interagency agreements. This total also includes amounts 

obligated by HHS under contracts, task orders, and interagency agreements in fiscal 

years 2010 and 2011, before HHS transferred oversight of exchange implementation to 

CMS. An obligation is a definite legal commitment that will give rise to payment at some 

point in the future. An agency incurs an obligation, for example, when it awards a contract. 

Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data 

Hub and Amounts Obligated
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 36 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

Aquilent 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

2,262,701 CMS Program 

Management Account

Aquilent 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

2,992,430 CMS Program 

Management Account

Blast Design Studio Inc 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

197,625 CMS Program 

Management Account

Booz Allen Hamilton 2011 Exchanges Enrollment & Eligibility 1,000,000 HHS General 

Departmental 

Management Account

Booz Allen Hamilton 2011 Exchanges Enrollment & Eligibility 1,217,735 HHS General 

Departmental 

Management Account

Booz Allen Hamilton 2011 Exchanges State Grants, TA, Oversight 885,396 HHS General 

Departmental 

Management Account

Booz Allen Hamilton 2011 Exchanges State Grants, TA, Oversight 13,024,672 HHS General 

Departmental 

Management Account

Booz Allen Hamilton 2011 SHOP & Employer 366,200 HHS General 

Departmental 

Management Account

Booz Allen Hamilton 2012 Eligibility & Enrollment Strategy 453,477 CMS Program 

Management Account

Booz Allen Hamilton 2012 Eligibility & Enrollment Strategy and Planning 1,452,350 CMS Program 

Management Account

Booz Allen Hamilton 2012 Eligibility Appeals Strategy & Research 1,027,313 CMS Program 

Management Account

Booz Allen Hamilton 2012 Exchange IT integration support for Enterprise 

Project Management Operations

6,129,727 CMS Program 

Management Account

Booz Allen Hamilton 2012 Exchange Plan Management, Support & 

Integration (including Coverage Appeals, 

Research Monitoring & Prescription Drug

Formulary Review & Assessment)

8,579,473 CMS Program 

Management Account

Booz Allen Hamilton 2012 Exchange Quality Activities 

(Sec. 1311/1321/1343)

500,000 Health Insurance 

Reform Implementation 

Fund 

Booz Allen Hamilton 2012 State Grants, Technical Assistance & Oversight 1,605,430 CMS Program 

Management Account

Booz Allen Hamilton 2013 Eligibility & Enrollment Strategy and Planning 883,102 CMS Program 

Management Account

Booz Allen Hamilton 2013 Eligibility Appeals Strategy & Research 612,675 CMS Program 

Management Account

Carasoft Technology 

Group

2012 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

238,349 CMS Program 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 37 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

CGI Federal Inc 2011 Federally-facilitated Exchanges IT 55,744,082 Health Insurance 

Reform Implementation 

Fund 

CGI Federal Inc 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

580,000 CMS Program 

Management Account

CGI Federal Inc 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

1,999,832 CMS Program 

Management Account

CGI Federal Inc 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

2,979,030 CMS Program 

Management Account

CGI Federal Inc 2012 Federal Health Care Exchange (HIX) technical 

Assistance & Support

24,771,690 CMS Program 

Management Account

CGI Federal Inc 2013 Rate Benefit Information System (RBIS) 1,923,304 Health Insurance 

Reform Implementation 

Fund

Corporate Executive 

Board 

2012 CEB Subscription, Enterprise Architecture 

Operational Support

186,738 CMS Program 

Management Account

Creative Computing 

Solutions

2012 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

222,444 CMS Program 

Management Account

Creative Computing 

Solutions

2012 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

5,082,411 CMS Program 

Management Account

DEDE Inc DBA 

Genova Technology

2011 Exchanges IT 2,828,148 HHS General 

Departmental 

Management Account

DEDE Inc DBA 

Genova Technology

2012 Business Requirements for PMO & Governance 1,110,327 CMS Program 

Management Account

DEDE Inc DBA 

Genova Technology

2012 Business Requirements for PMO & Governance 437,929 CMS Program 

Management Account

DEDE Inc DBA 

Genova Technology

2012 Business Requirements for PMO & Governance 1,799,851 CMS Program 

Management Account

DEDE Inc DBA 

Genova Technology

2012 Business Requirements for PMO & Governance 4,579,104 CMS Program 

Management Account

DEDE Inc DBA 

Genova Technology

2012 Data Architectural Contract -Requirements 

Support, Enterprise Data & Design Support 

(Incorporated the Multidimensional Data Analytics 

System (MIDAS))

4,195,450 CMS Program 

Management Account

DEDE Inc DBA 

Genova Technology

2013 Business Requirements for PMO & Governance 1,076,106 CMS Program 

Management Account

Deloitte Consulting 2012 Enterprise Project Management Operations 670,486 CMS Program 

Management Account

Deloitte Consulting 2012 Health Plan Bid Review, Management & Oversight 

(Sec. 1311/1321/1343)

750,000 Health Insurance 

Reform Implementation 

Fund

Deloitte Consulting 2012 SHOP & Employer 709,230 Health Insurance 

Reform Implementation 

Fund
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 38 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

DHHS / Office of the 

Secretary 

2012 Health Information Exchange 1,346,831 CMS Program 

Management Account

DHHS Program 

Support Centera 2010 Program Support Center Services Bill 94,582 Health Insurance Reform Implementation 

Fund

DHHS Program 

Support Centera 2011 IT Services for CAG Tool with Team Triple-i 42,999 Health Insurance Reform Implementation 

Fund

DHHS Program 

Support Centera 2011 Program Support Center Services Bill 25,000 Health Insurance 

Reform Implementation 

Fund 

DHHS/ACF 2013 Navigator Grants Administration & Support 748,280 CMS Program 

Management Account

DHHS/NIH/NCI 2012 Enterprise Architecture Operational Support 53,460 CMS Program 

Management Account

DHHS/NIH/NCI 2012 Enterprise Data & Design Support 

(Incorporated the Multidimensional Data Analytics 

System (MIDAS))

301,583 CMS Program 

Management Account

DHHS/NIH/NCI 2012 Federal Health Care Exchange (HIX) technical 

Assistance & Support

1,528 CMS Program 

Management Account

DHHS/NIH/NCI 2013 Federal Health Care Exchange (HIX) technical 

Assistance & Support 

1,452 CMS Program 

Management Account

DHHS/PSC 2013 CMS Analysis of Payment Notice Summaries 447,926 CMS Program 

Management Account

Duty First 

Consulting LLC

2012 Exchange Plan Management, Support & 

Integration (including Coverage Appeals, 

Research, Monitoring & Prescription Drug

Formulary Review & Assessment)

141,836 CMS Program 

Management Account

Econometrica Inc 2012 Post-Reform Consumer Landscape Market 

Analytics and Implementation 

(Sec. 1311/1321/1343)

993,236 Health Insurance 

Reform Implementation 

Fund

Econometrica Inc 2013 Post-Reform Consumer Landscape Market 

Analytics

572,613 CMS Program 

Management Account

Fedresults Inc 2012 Federal Health Care Exchange (HIX) 

Exchange Web Portal & Support

901,476 CMS Program 

Management Account

Foresee 2012 Federal Health Care Exchange (HIX) 

Exchange Web Portal & Support

45,000 CMS Program 

Management Account

General Services 

Administrationa 2010 Rent-Bethesda Office 244,230 Health Insurance 

Reform Implementation 

Fund

George Washington 

University 

(through Program 

Support Center)

2012 Commercial health insurance Research 262,574 CMS Program 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 39 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

Global Tech Inc DBA 

EglobalTec

2012 Cloud Computing, Enterprise Architecture 

Operational Support

646,532 CMS Program 

Management Account

Government 

Acquisitions Inc

2012 Enterprise Architecture Operational Support 1,721,378 CMS Program 

Management Account

Government Printing 

Officea 2010 Federal Register Notice Charge 3,097 Health Insurance 

Reform Implementation 

Fund

Homeland 

Security/Federal Law 

Enforcement Training 

Centera

2010 Building Security 2,252 Health Insurance 

Reform Implementation 

Fund

IDL Solutions 2012 Enterprise Data & Design Support 

(Incorporated the Multidimensional Data 

Analytics System (MIDAS))

209,416 CMS Program 

Management Account

IDL Solutions 2012 Enterprise Data & Design Support 

(Incorporated the Multidimensional Data 

Analytics System (MIDAS))

9,133,096 CMS Program 

Management Account

Innosoft Corporation 2012 Enterprise Project Management Operations 1,000,532 CMS Program 

Management Account

ISOM Events 2012 Stake Holder Outreach 67,925 CMS Program 

Management Account

KPMG LLP 2012 Audit & Validation, Program Integrity and 

Financial Oversight

4,771,142 CMS Program 

Management Account

KPMG LLP 2012 SHOP & Employer Support 3,193,793 CMS Program 

Management Account

KPMG LLP 2013 Employer Database 162,476 CMS Program 

Management Account

L&M Policy Research 2012 Consumer Information & Outreach 

(Sec. 1311/1321/1343)

1,353,969 Health Insurance 

Reform Implementation 

Fund

L&M Policy Research 2012 Consumer Research Enhancing Web-based 

Tools on Health Insurance Exchanges Portal

1,353,720 CMS Program 

Management Account

Lockheed Martin 2012 Enterprise Architecture Operational Support 10,500 CMS Program 

Management Account

Lockheed Martin 2012 Enterprise Architecture Operational Support 69,007 CMS Program 

Management Account

Lockheed Martin 2012 Enterprise Architecture Operational Support 244,713 CMS Program 

Management Account

Lockheed Martin 2013 Enterprise Architecture Operational Support 396,000 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2012 Enterprise Architecture Operational Support 1,523,600 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2012 Exchange Consumer Call Center 4,327,433 CMS Program 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 40 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

Lockheed Martin 

Services Inc

2012 Federal Health Care Exchange (HIX) Hub 10,013 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2012 Federal Health Care Exchange (HIX) Hub 49,223 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2012 Federal Health Care Exchange (HIX) Hub 168,811 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2012 Federal Health Care Exchange (HIX) 

technical Assistance & Support

200,000 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2013 Enterprise Architecture Operational Support 7,507 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2013 Federal Health Care Exchange (HIX) Hub 12,062 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2013 Federal Health Care Exchange (HIX) Hub 17,499 CMS Program 

Management Account

Lockheed Martin 

Services Inc

2013 Federal Health Care Exchange (HIX) 

Technical Assistance & Support

31,164 CMS Program 

Management Account

Logistics 

Management Institute

2012 Health Plan Bid Review, Management & Oversight 

(Sec. 1311/1321/1343)

449,765 Health Insurance 

Reform Implementation 

Fund

Logistics 

Management Institute

2012 Health Plan Bid Review, Management & Oversight 

(Sec. 1311/1321/1343)

2,675,507 Health Insurance 

Reform Implementation 

Fund

Logistics 

Management Institute

2012 Health Plan Bid Review, Management & Oversight 

(Sec. 1311/1321/1343)

2,964,739 Health Insurance 

Reform Implementation 

Fund

Logistics 

Management Institute

2012 SHOP & Employer -Exchange Operations & 

Health Plan Rate Benefit Package

336,686 Health Insurance 

Reform Implementation 

Fund

Logistics 

Management Institute

2012 SHOP & Employer-Exchange Operations & 

Health Plan Management

459,979 Health Insurance 

Reform Implementation 

Fund

Logistics 

Management Institute

2013 Health Plan Management, Rate Analysis & 

Benefit Package Review

2,624,342 CMS Program 

Management Account

Logistics 

Management Institute

2013 Health Plan Management, Rate Analysis & 

Benefit Package Review

9,596,649 CMS Program 

Management Account

National Government 

Services Inc

2012 Exchange Consumer Call Center 17,672,541 CMS Program 

Management Account

National Government 

Services Inc

2012 SHOP Premium Aggregations & Employer 13,918,305 CMS Program 

Management Account

National Opinion 

Research Centera 2011 Technical Assistance - Commercial Health 

Insurance and Public Sector Health Coverage 

969,514 Health Insurance 

Reform Implementation 

Fund

Navigant Consulting 

Inc

2012 Outreach and Collection Activities Under the 

Affordable Care Act- Reinsurance Entity

8,949,560 CMS Program 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 41 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

Noblis Inc 2013 Health Information Exchange 350,000 CMS Program 

Management Account

NORC 

(through Program

Support Center)

2012 Commercial health insurance Research 96,792 CMS Program 

Management Account

NORC 

(through Program 

Support Center)

2012 Commercial health insurance Research 1,009,756 CMS Program 

Management Account

Northrop Grumman 

Information Technology

2012 Enterprise Eligibility Service (EES) - Integrated 

Care Data and Application - Federal Health 

Care Exchange (HIX) Hub

1,365,829 CMS Program 

Management Account

Northrop Grumman 

Information Technology

2012 Federal Health Care Exchange (HIX) 

technical Assistance & Support

549,058 CMS Program 

Management Account

Office of Personnel 

Managementa 2011 Security Badges 2,772 Health Insurance 

Reform Implementation 

Fund

Onix Networking Corp 2012 Federal Health Care Exchange (HIX) 

Exchange Web Portal & Support

44,340 CMS Program 

Management Account

Opera Solutions, LLC 2012 Operational Analytics & Fraud Surveillance, 

Financial Management

3,999,260 CMS Program 

Management Account

Professional and 

Scientific Associates Inca 2010 Meeting and Conference Support Contract 407,780 Health Insurance Reform Implementation 

Fund 

Quality Software 

Services Inc

2011 Affordable Care Act System Testing Support 

for Data Services Hub

25,700,907 Health Insurance 

Reform Implementation 

Fund 

Quality Software 

Services Inc

2012 Enterprise Architecture Operational Support 199,364 CMS Program 

Management Account

Quality Software 

Services Inc

2012 Enterprise Project Management Operations 4,516,369 CMS Program 

Management Account

Quality Software 

Services Inc

2012 Federal Health Care Exchange (HIX) Hub 23,017,077 CMS Program 

Management Account

Quality Software 

Services Inca 2010 Exchange IT Support Contract 1,595,480 Health Insurance 

Reform Implementation 

Fund 

Quality Software 

Services Inca 2011 Base Year Modification - Exchange IT Support Contract

69,040 Health Insurance 

Reform Implementation 

Fund

Quality Technology Inc 2012 Operational Support Center Support Contractor 1,610,233 CMS Program 

Management Account

Quality Technology Inc 2013 Operational Support Center Support Contractor 5,436,471 CMS Program 

Management Account

Research Triangle 

Institute

2011 Exchanges Research and Support 2,427,141 HHS General 

Departmental 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 42 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

Research Triangle 

Institute

2012 Part C, Part D, and State Exchange Risk 

Adjustment Model Research Development 

(previously funded out of Project #7194)

1,218,408 CMS Program 

Management Account

SAIC 2012 Enterprise Architecture Operational Support 109,406 CMS Program 

Management Account

SAIC 2012 Enterprise IT Operations 2,762,088 Health Insurance 

Reform Implementation 

Fund

Salter Mitchell Inc 2012 Consumer Information & Outreach for technical 

professional services to assist in research around 

the Exchanges (Sec. 1311/1321/1343)

2,141,588 Health Insurance 

Reform Implementation 

Fund

Salter Mitchell Inc 2012 Exchange Consumer Research 9,813 CMS Program 

Management Account

Salter Mitchell Inc 2012 Exchange Consumer Research 2,203,831 CMS Program 

Management Account

Spherecom

Enterprises Inc

2012 Federal Health Care Exchange (HIX) 

technical Assistance & Support

708,417 CMS Program 

Management Account

Spherecom 

Enterprises Inc

2012 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

1,282,431 CMS Program 

Management Account

SSA 2012 Eligibility & Enrollment Strategy 500,000 CMS Program 

Management Account

SSA 2012 Interagency Agreement with SSA 400,000 Health Insurance 

Reform Implementation 

Fund

Tantus Technologies Inc 2012 Health Care Exchange/HIGLAS 4,097,719 CMS Program 

Management Account

Terremark Federal 

Group

2012 Cloud Computing 11,587,701 CMS Program 

Management Account

Terremark Federal 

Groupa 2011 Cloud Computing Services 3,952,012 Health Insurance 

Reform Implementation 

Fund

The George 

Washington Universitya 2010 Exchange Analytical Support Contract 695,007 Health Insurance 

Reform Implementation 

Fund

The Mitre Corporation 2012 CMS Modernization Support, Exchange 

Plan Management, Support & Integration 

(including Coverage Appeals, Research, 

Monitoring & Prescription Drug Formulary 

Review & Assessment)

3,995,435 CMS Program 

Management Account

The Mitre Corporation 2012 Enterprise Architecture Operational Support 156,781 CMS Program 

Management Account

The Mitre Corporation 2012 Enterprise Data & Design Support 

(Incorporated the Multidimensional Data 

Analytics System (MIDAS))

51,453 CMS Program 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 43 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

The Mitre Corporation 2012 Enterprise Data & Design Support 

(Incorporated the Multidimensional Data 

Analytics System (MIDAS))

88,847 CMS Program 

Management Account

The Mitre Corporation 2012 Enterprise Project Management Operations 6,477,209 CMS Program 

Management Account

The Mitre Corporation 2012 Exchange Procurement & Acquisition Support 6,097,155 CMS Program 

Management Account

The Mitre Corporation 2012 Federal Health Care Exchange (HIX) Exchange 

Web Portal & Support

1,010,738 CMS Program 

Management Account

The Mitre Corporation 2012 Federal Health Care Exchange (HIX) technical 

Assistance & Support

550,000 CMS Program 

Management Account

The Mitre Corporation 2012 Health Insurance Assistance database (HIAD) 51,453 CMS Program 

Management Account

The Mitre Corporation 2012 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

102,906 CMS Program 

Management Account

The Mitre Corporation 2013 CALT Security Testing & Evaluation (Now CALT 

Security Controls and Assessment (SCA)) and 

code reviews for Federal Health Care Exchange 

(HIX) Hub

91,573 CMS Program 

Management Account

The Mitre Corporation 2013 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

91,573 CMS Program 

Management Account

The Mitre Corporation 2013 IT Security - Security Oversight, Equipment, New 

Systems Testing, and Security Program Support

110,968 CMS Program 

Management Account

The Mitre 

Corporationa 2010 OCIIO Modernization Support 750,036 Health Insurance Reform Implementation 

Fund

The Mitre 

Corporationa 2011 Option Period - OCIIO Modernization Support 2,402,545 Health Insurance 

Reform Implementation 

Fund

Truven Health 

Analytics Inc

2012 Financial Management & Operational Analytics 30,000 CMS Program 

Management Account

Truven Health 

Analytics Inc

2012 Training, Program & Technical Assistance Support 1,867 CMS Program 

Management Account

Truven Health 

Analytics Inc

2012 Training, Program & Technical Assistance Support 7,120 CMS Program 

Management Account

Truven Health 

Analytics Inc

2012 Training, Program & Technical Assistance Support 21,012 CMS Program 

Management Account

Turning Point Global 

Solutions

2012 Enterprise Project Management Operations 3,040,032 CMS Program 

Management Account

Urban Institute 

(through Program 

Support Center)

2011 Health Plan Bid Review, Management & Oversight 

(Sec. 1311/1321/1343)

300,000 HHS General 

Departmental 

Management Account

Verizon 2013 Federal Health Care Exchange (HIX) technical 

Assistance & Support

774,174 CMS Program 

Management Account
Appendix I: Contractors Supporting the 

Federally Facilitated Exchanges and Data Hub 

and Amounts Obligated

Page 44 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Contractor Fiscal year Project description

Amount obligated 

(dollars) Funding source

Wakely Consulting 

Groupa 2010 Exchange Consultant Contract 432,093 Health Insurance 

Reform Implementation 

Fund

Source: CMS.

Notes: These totals include amounts obligated for contracts, task orders, and interagency 

agreements to complete activities to establish the FFEs and the data hub and carry out certain other 

exchange-related activities. 

a

This total includes some obligations by HHS before it transferred oversight of exchange 

implementation to CMS.
Appendix II: Comments from the Department 

of Health and Human Services

Page 45 GAO-13-601 Federally Facilitated Health Insurance Exchanges

Appendix II: Comments from the Department 

of Health and Human Services
Appendix II: Comments from the Department 

of Health and Human Services

Page 46 GAO-13-601 Federally Facilitated Health Insurance Exchanges
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 47 GAO-13-601 Federally Facilitated Health Insurance Exchanges

John E. Dicken, (202) 512-7114 or dickenj@gao.gov

In addition to the contact name above, Randy Dirosa and Teresa Tucker, 

Assistant Directors; Tonia Brown; Sandra George; Jawaria Gilani; 

William Hadley; Thomas Murphy; and Laurie Pachter made key 

contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(291115)
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