Incident: Maryland's Online Health Insurance Exchange Failure: Costly and Ineffective

Published Date: 2014-02-27

Postmortem Analysis
Timeline 1. The software failure incident in Maryland's online health insurance exchange happened in October 2013.
System 1. Maryland's online health insurance exchange system [24834]
Responsible Organization 1. Noridian Healthcare Solutions - The lead contractor hired to build the Maryland online health insurance exchange system was fired due to the protracted problems, indicating their responsibility for the software failure incident. [24834]
Impacted Organization 1. Taxpayers in Maryland [24834]
Software Causes 1. The software failure incident in Maryland's online health insurance exchange was caused by flaws in the system that prevented the identification of Medicaid recipients who should be removed from the rolls due to increased income [24834]. 2. The system also faced problems with incorrect eligibility determinations, stuck cases, difficulties in choosing managed care organizations, and sending enrollment data to the federal Medicaid hub [24834].
Non-software Causes 1. Tight deadline and high-risk undertaking in building the complex online exchange [Article 24834] 2. Attempting to add features like a Medicaid renewal function to the health insurance marketplace, making the process more challenging [Article 24834] 3. Overreaching and dallying in searching for solutions [Article 24834] 4. Challenges with identifying Medicaid recipients who should be removed from the rolls due to increased income [Article 24834] 5. Problems with Medicaid applicants facing incorrect eligibility determinations, stuck cases, difficulties in choosing managed care organizations, and sending enrollment data to the federal Medicaid hub [Article 24834]
Impacts 1. The software failure incident in Maryland's online health insurance exchange led to at least $30.5 million in unnecessary Medicaid spending, with costs likely to keep rising as the state figures out how to fix or replace the system [Article 24834]. 2. The state paid $65.4 million to the contractor hired to build the system, which was fired due to the protracted problems, leading to additional financial implications [Article 24834]. 3. The software failure incident caused delays in confirming the eligibility of Medicaid recipients, resulting in a six-month extension and expected unnecessary payments of $17.8 million in the current fiscal year and $12.7 million in the next fiscal year [Article 24834]. 4. Thousands of Marylanders seeking coverage were hindered by the flaws in the exchange, impacting their ability to access health insurance [Article 24834]. 5. The software failure incident disrupted the original timeline for the project, with the exchange crashing almost immediately upon debut and the need to overhaul or replace the system upending the budget plan [Article 24834].
Preventions 1. Thoroughly assessing the risks and challenges involved in building the complex online exchange on a tight deadline and avoiding high-risk undertakings from the outset could have prevented the software failure incident [24834]. 2. Implementing a more phased and incremental approach to the development of the online exchange, rather than trying to add complex features like a Medicaid renewal function, could have reduced the likelihood of failure [24834]. 3. Ensuring a solid backup plan and contingency measures in case of system failures or setbacks could have mitigated the impact of the software failure incident [24834].
Fixes 1. Fix the system 2. Develop a new system 3. Adopt technology that was successful in Connecticut, Kentucky, or other states 4. Join a multistate consortium 5. Use the federal marketplace [Cited from Article 24834]
References 1. Maryland Health Benefit Exchange officials 2. Maryland legislature’s budget analysts 3. Maryland Department of Legislative Services 4. Joshua M. Sharfstein, Maryland’s secretary of health and mental hygiene 5. Del. Adelaide C. Eckardt (R-Dorchester)

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization (a) The software failure incident has happened again at one_organization: The software failure incident in Maryland's online health insurance exchange involved flaws that hindered thousands of Marylanders seeking coverage. The exchange's governing board fired the lead contractor, Noridian Healthcare Solutions, and state officials mentioned the possibility of suing or penalizing Noridian and other firms involved in the project [24834]. (b) The software failure incident has happened again at multiple_organization: There is no information in the provided article to suggest that a similar software failure incident has happened at other organizations or with their products and services.
Phase (Design/Operation) design, operation (a) The software failure incident in Maryland's online health insurance exchange was primarily due to issues related to the design phase of the system development. The decision to build the complex online exchange on a tight deadline was considered a "high-risk undertaking" from the outset. Maryland made the process more challenging by trying to add features like a Medicaid renewal function to the health insurance marketplace, which contributed to the problems faced by the system [24834]. (b) Additionally, the software failure incident also involved issues related to the operation phase of the system. Problems such as incorrect eligibility determinations, difficulties in choosing managed care organizations, and challenges in sending enrollment data to the federal Medicaid hub were highlighted as operational issues faced by Medicaid applicants using the system. These operational challenges added to the overall failure of the system [24834].
Boundary (Internal/External) within_system (a) within_system: The software failure incident in Maryland's online health insurance exchange was primarily due to factors originating from within the system. The decision to build the complex online exchange on a tight deadline and the attempt to add features like a Medicaid renewal function made the process more challenging [24834]. Additionally, the system had issues such as the inability to identify Medicaid recipients who should be removed from the rolls due to increased income, incorrect eligibility determinations for Medicaid applicants, difficulties in choosing managed care organizations, and challenges in sending enrollment data to the federal Medicaid hub [24834]. These internal system issues contributed to the failure of the online health insurance exchange in Maryland.
Nature (Human/Non-human) non-human_actions, human_actions (a) The software failure incident in Maryland's online health insurance exchange was primarily due to non-human actions, such as flaws in the system itself. The system had issues like the inability to identify Medicaid recipients who should be removed from the rolls due to increased income, incorrect eligibility determinations, difficulties in choosing managed care organizations, and challenges in sending enrollment data to the federal Medicaid hub [24834]. (b) Human actions also played a role in the software failure incident. Maryland's decision to build the complex online exchange on a tight deadline and trying to add features like a Medicaid renewal function to the health insurance marketplace were considered high-risk undertakings. Additionally, the exchange's governing board fired the lead contractor, Noridian Healthcare Solutions, indicating issues with the contractor's performance [24834].
Dimension (Hardware/Software) software (a) The software failure incident in Maryland's online health insurance exchange was primarily due to software issues rather than hardware. The articles mention problems such as the system's inability to identify Medicaid recipients with increased income, incorrect eligibility determinations, difficulties in choosing managed care organizations, and challenges in sending enrollment data to the federal Medicaid hub. These issues point to software-related flaws in the system [24834]. (b) The software failure incident in Maryland's online health insurance exchange was primarily attributed to software issues. The articles highlight problems like incorrect eligibility determinations, difficulties in choosing managed care organizations, challenges in sending enrollment data, and the system's inability to identify Medicaid recipients with increased income. These issues indicate that the failure originated from software-related factors rather than hardware [24834].
Objective (Malicious/Non-malicious) non-malicious (a) The software failure incident in Maryland's online health insurance exchange was non-malicious. The failure was attributed to flaws in the system, such as the inability to identify Medicaid recipients who should be removed from the rolls due to increased income, incorrect eligibility determinations, difficulties in choosing managed care organizations, and challenges in sending enrollment data to the federal Medicaid hub [24834]. The issues were a result of high-risk undertakings, tight deadlines, and attempts to add complex features to the system, rather than any malicious intent to harm the system.
Intent (Poor/Accidental Decisions) poor_decisions (a) The software failure incident in Maryland's online health insurance exchange was primarily due to poor decisions. The decision to build the complex online exchange on a tight deadline was described as a "high-risk undertaking" from the outset. Maryland made the process more challenging by trying to add features like a Medicaid renewal function to the health insurance marketplace, which increased the complexity and risk of the project [24834]. Additionally, the report highlighted that officials must decide quickly on five options to address the broken health exchange, including fixing the system, developing a new one, adopting successful technology from other states, joining a multistate consortium, or using the federal marketplace [24834]. These decisions reflect the poor planning and execution that led to the software failure incident.
Capability (Incompetence/Accidental) development_incompetence, accidental (a) The software failure incident in Maryland's online health insurance exchange can be attributed to development incompetence. The article highlights that the decision to build the complex online exchange on a tight deadline was considered a "high-risk undertaking" from the outset. Maryland made the process more challenging by trying to add features like a Medicaid renewal function to the health insurance marketplace, which contributed to the problems faced by the system [24834]. (b) The software failure incident in Maryland's online health insurance exchange also involved accidental factors. For example, the system faced challenges such as incorrect eligibility determinations, difficulties in choosing managed care organizations, and issues with sending enrollment data to the federal Medicaid hub. These issues were not intentional but were accidental consequences of the flawed system design and implementation [24834].
Duration temporary The software failure incident related to the Maryland online health insurance exchange can be categorized as a temporary failure. The articles mention that the exchange faced significant challenges and flaws, leading to unnecessary Medicaid spending, incorrect eligibility determinations, difficulties in enrollment, and problems with identifying recipients. The state officials were considering various options to address the issues, such as fixing the system, developing a new one, adopting successful technology from other states, joining a consortium, or using the federal marketplace [24834]. Additionally, there were delays in confirming Medicaid eligibility, and the system was not functioning as intended, requiring urgent decisions to be made about its future [24834].
Behaviour crash, omission, value, other (a) crash: The software failure incident in Maryland's online health insurance exchange can be categorized as a crash. The article mentions that the exchange site crashed almost immediately after its debut on October 1st [24834]. (b) omission: The software failure incident also involved omission as a type of behavior. For example, the system could not identify Medicaid recipients who should be removed from the rolls due to increased income, leading to delays and unnecessary payments [24834]. (c) timing: The timing of the software failure incident is evident in the article as well. The system was not performing its intended functions correctly in a timely manner, causing delays in confirming the eligibility of Medicaid recipients and resulting in unnecessary costs [24834]. (d) value: The software failure incident also exhibited behavior related to performing its intended functions incorrectly. For instance, Medicaid applicants faced issues with incorrect eligibility determinations, difficulties in choosing managed care organizations, and problems in sending enrollment data to the federal Medicaid hub [24834]. (e) byzantine: The byzantine behavior is not explicitly mentioned in the articles provided. (f) other: The software failure incident in Maryland's health insurance exchange could also be categorized under the "other" behavior as it involved a combination of issues such as system crashes, omissions, timing delays, and incorrect functioning, leading to a complex and multifaceted failure incident [24834].

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence property, theoretical_consequence (d) property: People's material goods, money, or data was impacted due to the software failure The software failure incident in Maryland's online health insurance exchange led to significant financial consequences. The state estimated at least $30.5 million in unnecessary Medicaid spending due to flaws in the system [24834]. Additionally, the state had paid $65.4 million to the contractor hired to build the system, which was eventually fired because of the protracted problems. Costs were expected to keep rising as Maryland worked on fixing or replacing the system [24834]. The system's problems also resulted in challenges for Medicaid applicants, including incorrect eligibility determinations and difficulties in choosing managed care organizations, impacting individuals seeking coverage [24834].
Domain health (a) The failed system was related to the health industry, specifically the Maryland Health Benefit Exchange, which was intended to provide health insurance coverage to Maryland residents [Article 24834].

Sources

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