A technical glitch with Vermont Health Connect dating back two years was finally corrected in a recent software upgrade, but it proved to be both time-consuming and costly for the state-based health insurance exchange described as “once-beleaguered.”

At issue was the absence of a key function known as automated change of circumstance, which meant that any changes in the personal information of enrollees had to be manually processed, causing a backlog of change requests and uncertainty about whether participating insurance carriers should stop billing certain customers.

Sean Sheehan, a VHC spokesman, notes that the exchange worked closely with its partners to improve system functionality and ensure there will be fewer discrepancies between VHC and carrier records moving forward.

“Now that the customer support team has eliminated the historical backlog and is processing new requests in a timely manner, we are in a better position to perform ongoing reconciliation efforts,” he says.

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Under a recent agreement, Blue Cross Blue Shield of Vermont will receive $1.6 million to cover what the Associated Press reported as unpaid premiums and “unrecoverable claims” that were paid incorrectly in 2014. It could have been much worse, with some surmising the number totaling as much as $4 million.

AP also noted that BCBSVT keeps plans on its books to avoid cancelling them by mistake and that the insurer is seeking to put in place “a more regular reconciliation process.” Any discrepancies for 2015 plans are still unknown and not part of the deal with VHC.

It’s unclear whether the only other insurance carrier in the state that sells medical plans on the exchange, MVP Healthcare, is owed money. But if they are, then it would be substantially less than the Blues plan because of their market share, according to one industry insider.

Robert Booz, a health care analyst with technology consultant Gartner, describes the series of events as consistent with a subset of occurrences that can happen on any given IT project. “You’ve got scope-control and governance issues in the sense of what the project is trying to accomplish and how you establish a process for its accomplishment,” he says.

Although such difficulties go with the territory, he says what happened in Vermont is worth deeper reflection. “Whenever you’ve got public trust involved, the playing field gets much more complicated,” Booz says. “I hate to sound trite, but you’re dealing with people’s lives. You’re dealing with very important issues. So what might be a minor problem in, say, a grocery store implementation, becomes a major problem when you’re dealing with this kind of issue.”

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Booz also believes VHC simply tried to do too much by simultaneously attempting a technology change and social change. His sense is that it would have been best to focus on IT solutions before shifting the objective to helping consumers understand their health insurance options, navigate the online marketplace and manage enrollment expectations. He says the lessons for other state exchanges are to ensure that their project is under control and aspirations are realistic.

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