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Dayton says he didn’t learn of MNsure problems and contract changes until after launch

The governor said he looks forward to an audit of the state-based insurance exchange to provide answers.

Dayton: “In hindsight, as the problems unfolded, it appeared that we weren’t apprised of them until they had surfaced. And whether that was because the senior staff was not aware of them until they surfaced, or what, is something the Legislative Auditor should go in and review.”
MinnPost photo by James Nord

Gov. Mark Dayton said Friday that he first learned at least six months later of controversial contract changes made by the state’s health exchange.

 He said he also didn’t know about the serious technical issues plaguing MNsure until after the exchange’s Oct. 1 launch.

 Dayton said he first heard about the contract shift in late October or early November. Before that, he said, it wouldn’t have occurred to him to question such a decision by MNsure.

At this point, the governor said, he didn’t know whether it was a good idea for the state to take over the project from its lead vendor, Maximus, Inc., early last year.

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“When the problems persisted by … early November, and it became apparent they were not getting resolved or eliminated or new ones were coming up … that’s when these kind of arrangements became more concerning,” Dayton said at a Capitol press conference after highlighting a new Minnesota jobs initiative. “Certainly, at some point there, I was told about this.”

The governor also said he was unsure if senior MNsure staff were keeping him apprised of the serious issues with the exchange as soon as they came up.

He said he looked forward to an audit of the state-based insurance exchange that’s moving forward to provide answers.

“I thought [I was well-informed],” Dayton said. “In hindsight, as the problems unfolded, it appeared that we weren’t apprised of them until they had surfaced. And whether that was because the senior staff was not aware of them until they surfaced, or what, is something the Legislative Auditor should go in and review.”

Optum, a subsidiary of UnitedHealth Group, is doing an “end-to-end” review of MNsure’s systems that will in part take a look at the exchange’s contracting decisions.

The Office of the Legislative Auditor is also doing its own external review that will be much broader in scope than what is required in state and federal law.

The contracting change is one that lawmakers pushed MNsure officials on at an oversight hearing on Thursday.

Minnesota Management and Budget, which had oversight over MNsure in May 2013, was aware of the change, and Commissioner Jim Schowalter approves contract shifts, spokesman John Pollard said in an email.

“MMB was the lead agency on the MNsure project at the time the Maximus contract was adjusted,” Pollard said in a follow-up email. “Maximus was a business process expert and it was determined MNsure needed to shift to integration and implementation. The contract moved approximately $1 million from Maximus to EngagePoint for increased integration focus. MNsure opted for more time on integration and implementation, so the limited time we had set aside for testing would not be compromised.”

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The governor also addressed a letter he sent to IBM Curam in mid-December outlining technical issues with key eligibility determination software that they provided MNsure. Dayton criticized the company in the letter for misrepresenting the completeness of its product and making it difficult for consumers to use MNsure.

Dayton told reporters on Friday that his intention wasn’t to single out IBM but to ensure that they fixed the problems that he’d raised. Shortly after the letter and further conversations with the firm, dozens of IBM experts landed here, where they have been working to fix the issues.

“It was not an attempt to shift any responsibility from MNsure and from ultimately myself and I’ve made that clear throughout,” Dayton said of the letter. “It’s also not an attempt to single IBM Curam out.”

“What I was trying to do and was successful in doing with that letter was getting the attention of IBM at the highest management level,” he added. “We’re not going to point fingers and assess who was to blame for what … we’re going to work together to get the site fixed and working the way it should.”

In addition to addressing issues with MNsure, the governor also declined to comment about a running mate for his 2014 re-election bid. Dayton is meeting with Lt. Gov. Yvonne Prettner Solon on Monday to discuss whether she wants to run again, and he said he wouldn’t talk about it until after the meeting occurred.