Watch CBS News

Behind Tough MNsure Audit, Details Of More Problems

ST. PAUL, Minn. (AP) — Beneath a scathing audit of MNsure released last week are additional details that could bolster lawmakers' case to give the Legislature greater power over the state's health insurance exchange.

The Office of the Legislative Auditor concluded that MNsure overpromised and under delivered in its first year. Hundreds of interviews, emails and documents supporting that audit shed more light about who knew what as the ill-fated launch approached, who was responsible and what was done to fix mounting problems.


As MNsure faltered in late 2013, Gov. Mark Dayton publicly chastised one of the state's main vendors building the exchange's technical infrastructure for making it "impossible to provide Minnesotans with any reasonable customer service." In turn, IBM launched what was billed as a "tech surge" of 80-plus employees dedicated to fixing bugs and bailing out a swamped call center.

In reality, the company sent just nine employees, "mostly PR people," then-state chief information officer Carolyn Parnell told state auditors. MNsure confirmed a small number of IBM employees were dispatched.

Company spokesman Clint Roswell disputed Parnell's statement, calling it an "ill-informed remark" that doesn't accurately reflect IBM's work on the project. He said MNsure — not IBM — publicized the larger surge of workers.


The audit faulted MNsure —and former executive director April Todd-Malmlov — for not seeking additional input or sharing issues with the board or the administration sooner.

No one was harsher on Todd-Malmlov than Parnell, who blamed her for most of the exchange's problems.

"She was absolutely intent on being in control of everything. She would not take direction from anybody," the former Office of MN.IT Services commissioner said, according to a transcript. "From where I sit, she was the big problem."

Todd-Malmlov resigned amid controversy stemming from a trip to Costa Rica as the exchange struggled to meet basic demands. She declined a request for comment.

MNsure board chairman Brian Beutner told auditors it wasn't just the public outcry over Todd-Malmlov's trip that led to her departure. He told auditors her absence removed a "choke point" on information and let him see wider problems and concerns across state government.

"I hear different things, I see different things, and it set in motion different things, absolutely," Beutner said, according to a transcript of his interview.

Despite those criticisms, Todd-Malmlov was still lauded by Parnell, Beutner and Dayton for her health care knowledge. Beutner said he wanted to bring in someone else to lead MNsure but keep Todd-Malmlov on board.

She resigned instead.


One week before MNsure's site publicly launched on Oct. 1, 2013, Gov. Mark Dayton mentioned some possible glitches and problems but was generally upbeat about how the rollout would go, telling reporters of conference calls with the system's leaders about last-minute preparations. After the wheels fell off, he said he wasn't informed of any serious problems until after its launch.

But he learned of problems that "alarmed me and upset me" in a mid-September meeting exchange officials, according to notes from his interview with auditors. As those concerns and problems grew, he was involved in the decision to go ahead with the planned launch date.

The governor's spokesman said Dayton didn't mislead the public about the severity of problems at MNsure, pointing to Dayton's allusion to some possible glitches.

"The serious systemic problems, which damaged MNsure's initial functionality, were not evident to him until several weeks after its launch," spokesman Matt Swenson said in a statement.

Dayton also told the legislative auditor he wished he could have shut down the fledgling exchange for six weeks to iron out problems. WCCO-TV first reported the governor had mulled a possible shutdown.

Sen. Michelle Benson, a Ham Lake Republican and MNsure critic, said Dayton should have pursued it.

"If the governor was willing to ask for a shutdown period, it would have given us some confidence that he understood how serious the problem was," Benson said.


Benson said issues clearly go deeper even than the legislative auditor's report laid out, begging for more GOP involvement in fixing MNsure for the long term.

"I think the most important lesson you can learn is: Listen to your critics," she said.

Sen. Tony Lourey, a Kerrick Democrat and chief architect of the exchange, wants to abolish its seven-member governing board and establish MNsure as a full-blown state agency that reports directly to the governor. The audit's portrayal of MNsure under Todd-Malmlov as an insular entity should bolster his case, he said.

"They came to similar conclusions I came to about what needed to be done," Lourey said.

A week before MNsure's launch, Dayton cautioned reporters that the "acid test" for MNsure would be one-to-two years down the line.

After the disastrous rollout, the governor used the same phrase while speaking with auditors late last year but a much longer timeline, according to notes from his interview: MNsure's acid test will come over the next five to ten years, he said.

(© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.