Despite internal documents identifying potentially serious problems, the head of Minnesota’s new health exchange expressed confidence Thursday that the system will go online Oct. 1 with at least barebones functions.

The MNsure documents, obtained by MinnPost, note staff and consultants’ specific concerns about issues involving small businesses using the exchange, as well as eligibility verification and user testing.

The documents list the overall project status as “red,” or “at risk” for going live on Oct.1, the first federal deadline for exchanges across the country to begin enrolling consumers.

“The entirety of the project scope has always been red — at least one part of it has always been red,” said MNsure Executive Director April Todd-Malmlov during a Thursday interview. “It’s an indicator for us as to where to focus efforts.”

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“Honestly, I’ll tell you that’s been a risk since Day 1, and that hasn’t changed,” she said. “The schedule that we have is essentially putting a five- to 10-year IT project within a two- to three-year timeframe, and I would guess that every state has that same ‘red’ on there. That schedule and timeline is just really tight.”

The exchange is expected to serve about 1.3 million Minnesotans as an online marketplace where consumers and small businesses can compare and shop for insurance coverage.

Todd-Malmlov, who sat down with MinnPost to go through the documents, said the risk assessments included in the multi-agency reports are normal for a project of this size and timeframe.

The documents — weekly project status reports, technical updates and internal presentations — depict a project dealing with an extremely complicated IT infrastructure to build under a severe deadline.

“The schedule will remain [urgent] due to tight timelines with no slack,” according to a project overview from Sept. 11, the most recent available. “There is little to no room for vendors to miss code drop dates, and we are severely lacking in adequate testing time.”

Exchange staff and the vendors examine issues as they arise, decide if they can be fixed or worked around, and evaluate how they affect the overall project, she said. With October quickly approaching, MNsure staffers are meeting multiple times a day to discuss glitches and problems as they come up.

But documents show that the project’s fate has become more uncertain since April, according to MNsure’s internal standards.

A project overview from last week highlights the risk of two unknowns: “Whether the system will meet state and federal guidelines and if defects found in system and [user] testing will be able to be corrected in time to go live.”

Key features

It’s unclear how some of the key features of the exchange will work, according to the documents.

• Access for small businesses. Enterprises will use the SHOP program for employee health insurance, but it may not be available on Oct 1. “Just heard from Connecture that their 1.0 release does not have any MN SHOP requirements coded,” the weekly status report from last week reads.

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Todd-Malmlov said an updated version had filled in those requirements.

But the documents raise other problems.

“Testing performed thus far has opened around 30+ [issues], many of a nature that will threaten our ability to go-live on 10/1,” according to the report, referring to the small-business program.

Exchange staffers recognized that they wouldn’t be able to allow small-business employees to enroll in the exchange until the infrastructure’s second release in December. That feature has been postponed in order to avoid using manual processing, Todd-Malmlov said.

But that raises the specter of additional issues.

“It does, however, provide a single point of failure for SHOP in that if the vendors are unable to deliver we will have [employers] that have committed [but] no place for the [employees] to enroll,” according to the report.

• Eligibility issues. The exchange is supposed to allow for eligibility determination for public programs and insurance subsidies.

Todd-Malmlov said the process should go forward smoothly, but exchange staffers noted some problems in the documents.

“Team has participated in user testing and have determined that at this point, Eligibility determination and [tax credit] calculations are not working,” according to the timeline. “Completing an unsubsidized [health plan] works intermittently. For these reasons, we are reporting our status as Red.”

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Todd-Malmlov said she believes many of those issues have been fixed. Some populations, such as foster children, may still have problems, she said, and those people would then be processed by hand.

• Testing concerns. One of the largest problems identified in exchange documents is the lack of user testing before the Oct. 1 deadline.

Todd-Malmlov said she wishes there was more time.

“In a perfect world, I think you’d want to test for six months,” she said. “I can guarantee you no one has had that.”

So far, she said, the exchange has completed a variety of user and security tests.

She noted that there are a number of options if functionality isn’t guaranteed on Oct. 1. Often, state employees can employ manual workarounds. That appears likely to be the case for certain tasks, such as people wanting to pay with cash or check.

Todd-Malmlov has repeatedly told reporters and lawmakers that Minnesotans will be able to access MNsure when open enrollment begins. She also reiterated Thursday that the mammoth project wouldn’t have all the bells and whistles that staffers had originally hoped.

“Some of the planned functionality won’t be up on time,” Todd-Malmlov said. “What we had as a grand plan in our contract, it’s not all going to come in there Day 1, but people will be able to get coverage.”

February re-assessment

Exchange leaders re-evaluated the size of the project in February after staff met with the federal government to go over the basics of what the exchange would have to do.

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A MNsure report from early February acknowledged that there was “more work remaining than [the] schedule can accommodate.”

“We will all need to surrender many of the aspirational goals for the sake of realizing the absolute minimum essential,” the report reads.

Todd-Malmlov, who attended the D.C. meeting, said as an example, exchange staff dropped a feature to rate provider quality in order to focus on the minimum federal standards. The exchange has so far met those tests, which occurred over the summer.

She said it’s likely the project will face unexpected problems even after the deadline.