Many Americans remember the fiasco when Obamacare was launched in 2013. The Healthcare.gov website crashed on day one, and the government spent months trying to get customer service up to speed.
Fast-forward to 2024. One government contractor that was part of the Obamacare problem was awarded a $583 million contract to provide services to members of the U.S. military and their families. That has advocates for military families and taxpayer watchdog groups asking questions.
Cognosante LLC was one of the companies the Obama administration turned to for help building its insurance marketplace website. The work included helping people in nine cities across seven states ti enroll in Obamacare and expanded Medicare services.
That rollout ran into problems from the start. The Healthcare.gov site was criticized for slowdowns and bugs as people attempted to sign up. One whistleblower claimed Cognosante employees were told to “pretend to work” when federal workers visited a Missouri plant. Its contract with the federal government for Obamacare signups expired in 2017.
In 2020, Cognosante paid $18.9 million to the government after admitting it violated the False Claims Act. That included overcharging for two General Services Administration contracts and lying about its commercial discounting practices.
“We expect our contracting partners to be fully candid with the government, and we will pursue those that fail to fulfill that expectation,” said Michael R. Sherwin, then-acting U.S. attorney for the District of Columbia.
The issues weren’t limited to the federal database. Tennessee canceled a $31 million contract with the company because of issues with its TennCare website. A TennCare spokesperson said the company wasn’t “consistently meeting all of the performance measures” in the contract, specifically mentioning issues with a call center.
Despite the spotty record, Cognosante has received more than $1 billion in contracts since the start of the Biden administration. That includes several deals with the Department of Veterans Affairs for a variety of services, including telehealth and cloud operation services.
For example, the Department of Defense hired Cognosante in January to provide marketing and education support services for the TRICARE military health program.
Not surprisingly, critics of Cognosante’s record are asking questions about relying on the company to provide care for men and women serving in the U.S. military.
“Certainly, the feds have to review previous experience and failures when awarding a company a contract. In fact, the Federal Acquisition Regulation says it should be an ‘important element of every evaluation and contract award,’” said Steve Ellis at Taxpayers for Common Sense
“To my knowledge, Cognosante was not debarred as part of the settlement (which would typically be only three years anyway). And Justice indicated that it cooperated. That said, it still got hit with a whopping $18.9 million settlement. So, it should certainly be part of the equation along with price and ability to perform.”
Two companies that provide similar health services, Leidos and Carelon Behavioral Health, pointed to Cognosante’s troubled record to the Government Accountability Office, filing formal protests against the Defense deal. Leidos specifically mentioned the federal government’s issues with Cognosante’s performance.
The complaints were dismissed after the GSA canceled the contract due to Accenture’s acquisition of Cognosante.
So, how has this troubled company continued to collect contracts? Critics say what it lacks in quality control, it makes up in political contacts.
Former senators Bill Frist and Tom Daschle were once on the company’s board of directors. Current Deputy Attorney General Lisa Monaco was on Cognosante’s advisory board. The woman tapped to lead Cognosante’s civilian health department was a high-ranking employee at the Centers for Medicare & Medicaid Services. Former Cognosante senior vice president Steven Schliesman was once a top VA administrator.
Its current leadership includes several individuals with ties to the military contractor Booz Allen Hamilton. Cognosante’s president, general manager and GM of the civil and defense business unit formerly served as executives with that firm.
Its employees are politically active. Federal Election Commission records show former president, now senior adviser, Susan Fox donated more than $5,800 to Democrats, including senators Jeanne Shaheen of New Hampshire and Mark Kelly of Arizona. Both are on the Armed Services Committee.
Those connections ultimately led Accenture Federal Services to buy Cognosante for an undisclosed sum in April.
The GSA did not respond to a request for comment on its relationship with Cognosante.
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