Isles included in probe over use of federal funds

Republican state Sen. Sam Slom said the U.S. Government Accountability Office will investigate the Hawaii Health Connector’s use of $204 million in federal grants.

Slom complained in March to the GAO, an independent, nonpartisan agency that investigates federal government spending for Congress, that Hawaii had spent more than $80 million on information technology contracts for a faulty website.

The bulk of the IT contracts went to embattled contractor CGI Group Inc., the same firm that built the problematic federal exchange.

Hawaii had the lowest enrollment rate in the country at fewer than 8,000 as of the March 31 deadline to enroll in Obamacare coverage. The Connector has extended enrollment to April 30 for people who tried but couldn’t complete the application process.

"I am concerned about the possible abuse and waste of federal funds," Slom said in a March 27 letter to Gene Dodaro, comptroller general of the United States.

Slom said that in response to his letter, the GAO will include Hawaii in its investigations of six other states that received federal grants to build health insurance exchanges, the cornerstone of President Barack Obama’s Affordable Care Act.

The agency will investigate whether the Connector followed procedures regarding the use of federal funds as well as issues pertaining to security, Slom said.

A representative of the GAO couldn’t be reached for comment Thursday.

The Connector said it had not received any recent requests from the GAO.

"The Connector will respond appropriately to any request from the GAO," interim Executive Director Tom Matsuda said in a statement.

In a news release, Slom said taxpayers and legislators should be outraged by the Connector’s lack of planning and money management, adding that "this is not a partisan issue; this is an economic issue."

One of the major problems is that the Connector’s IT system is not integrated with the Medicaid system, although the enrollment process requires consumers seeking tax credits on the exchange to first be screened for Medicaid eligibility, Slom said. The Connector, which has collected more than 29,000 applications to date, said the issue has caused a bottleneck in enrollment.

U.S. Rep. Darrell Issa, R-Calif.; U.S. Rep. Jim Jordan, R-Ohio; and U.S. Rep. James Lankford, R-Okla., sent letters in March to Hawaii and nine other states and the District of Columbia complaining of potential security lapses during the rollout of health care exchanges.

Gov. Neil Abercrombie, a Democrat who served in the U.S. House for two decades before being elected governor, and Matsuda both dismissed the House Republican claims, countering that the Connector had passed the security certifications required by the Centers for Medicare and Medicaid Services before its Oct. 15 launch, which was delayed two weeks because of IT problems.

State lawmakers are deliberating whether to use general funds or place a fee on all insurers to pay for Connector operations, which will not be sustainable once the federal grants expire this year.

The nonprofit exchange the Legislature created in 2011 projects it will be short more than $4 million next year and nearly $9 million in 2016.