Health care reform creates 'target-rich environment'

The computer system that allows the federal government to confirm the eligibility of health insurance applicants under the 2010 health care law is coming under fire for delays in security checks as the Oct. 1 deadline for open enrollment approaches and the plan's health insurance exchanges – called marketplaces – open for business.

"We are on schedule and will be ready for the marketplaces to open on October 1," CMS spokesman Brian Cook said. "CMS has extensive experience building and operating information technology systems that handle sensitive data. This experience comes from many years administering the Medicare, Medicaid, and CHIP programs."

Critics are less confident. At issue is the security of the data hub that will connect the health insurance exchanges with information from disparate federal sources, including the Internal Revenue Service, the Department of Homeland Security, Veterans Affairs, the Social Security Administration and others. The system is being built under the supervision of the Centers for Medicare and Medicaid Services (CMS), a component of the Department of Health and Human Services. According to a recent memorandum report from the Inspector General at CMS, the deadline for authorizing the security of the data hub has been pushed back to Sept. 30, just one day before the exchanges are set to open for business nationwide.

Steven Parente, a professor at the University of Minnesota who specializes in health economics and IT worries that the scope of the data hub is bigger than anything the agency has previously attempted. He called attention to the data hubs as a potential "privacy nightmare" in an influential op-ed published in USA Today in 2012. "No one has really done eligibility at this scale. Up to 300 million people can potentially purchase insurance on the exchanges," he told FCW.

Because of the size, the hub is a "target-rich environment" for fraud, Parente said. It's designed to facilitate the flow of information between agency databases, but it's expressly not designed to store data. However, there is an exception for data that doesn't match up with government information. These are stored for review and possible correction. Parente said this "creates a huge spoofing opportunity" for hackers.

Parente attributes some of the delays in testing and authorizing the system to politics. He notes that the Obama administration wasn't sure until 2012 that the law would be upheld by the Supreme Court. The system required the cooperation of multiple agencies that are accustomed to operating under different data privacy regimes.

A statement of work put out by CMS in July 2011 gives a hint at the jurisdictional muddle surrounding data security in the new systems. Health data is covered by statute under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH). The sharing of databases among agencies is governed by the Privacy Act of 1974. Under the e-Government Act of 2002, agencies must perform privacy impact assessments when collecting and using personally identifiable information. The entire system must be compliant with the Federal Information Security Management Act.

Despite delays and hurdles, Parente is expecting the data hubs to go online on schedule and interact effectively with the federal exchange at Healthcare.gov. He's less certain whether the Hub will connect with the individual exchanges established by states. But he points out that the government has more of a cushion than the Oct. 1 deadline would indicate. Coverage doesn't begin until Jan. 1, 2014, and open enrollment extends through March 31. So if the hub launches with a few glitches, there will be time to address them.

Still, the delays are themselves proving a target-rich environment for committed opponents of the overhaul. Senate Minority Leader Mitch McConnell (R-Ky.) released a letter to CMS Administrator Marilyn Tavenner requesting public assurances that the center's CIO "will not be pressured to certify the system's readiness by signing the Security Decision Authorization" until it is secure. Rep. Patrick Meehan (R-Pa.), who has held hearings on the readiness of the program's technology, reiterated his concerns about the viability of the Oct. 1 launch date in a statement. "According to CMS' own report, there is no indication that they will be able to secure Americans' sensitive information, leaving millions of families targets of fraud and identity theft. In the rush to meet arbitrary deadlines, I'm concerned that corners will be cut and mistakes will be made. The alarms are sounding," Meehan said.

Yevgeniy Feyman, a research associate at the conservative-leaning Manhattan Institute said part of the problem is that the health care law raised expectations for purchasers. "The mistake was trying to frame this as being as easy as purchasing an airline ticket or booking a hotel online," he said. "Realistically, applying for health insurance is a long process."

The security of the data hub is of such a great concern because of the sensitivity of the information that passes over the system. Applicants using the exchanges will be asked to share Social Security numbers, IRS tax IDs, employment status, income, military service, and other information in addition to their basic personal information. The goal is an end-to-end confirmation system that pulls in records from relevant agencies to determine whether applicants are eligible for coverage under the law.

According to CMS, the hub provides a one-source connection for all the health services under the CMS umbrella, including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the insurance exchanges. The single hub eliminates vulnerabilities that might exist with multiple data connections coming from individual state exchange.

Testing is ongoing through the end of August, involving state exchanges, insurance providers, and the federal agencies whose data is set to stream over the hub once it opens.