Estimate of IT Resources for Implementation of the Affordable Care Act (ACA)

Estimate of IT Resources for Implementation of the Affordable Care Act (ACA)

Background

Enacted on March 23, 2010, the Patient Protection Affordable Care Act (PPACA) involves major healthcare stakeholders, including federal and state governments, employers, insurers, and health care providers, in an attempt to reform the private insurance market and expand health coverage to the uninsured. To implement PPACA and its large set of tax law changes, the client had to work closely with partner agencies to develop information technology systems (IT) that can share data with other agencies.  
PPACA is a significant effort for the client, and one of the most comprehensive legislative acts in US history. This presented a major challenge, as ACA represents the largest set of tax law changes in more than 20 years and affects millions of taxpayers. To implement the ACA provisions related to tax administration would involve significant actions, such as:

  • Developing information returns and various other tax forms;
  • Developing several databases and a datamart;
  • Interfacing with numerous existing legacy systems;
  • Implementing verification systems;
  • Training employees;
  • Revising and issuing revenue procedures and regulations; and
  • Proving outreach to taxpayers and tax professionals. 

Challenge

The challenge was that the prior ACA IT cost estimate only partially met cost estimating best practices. Logapps needed to develop an Independent Cost Estimate (ICE) to stand up to a General Accountability Office (GAO) audit. The changes to the project’s scope and planning assumptions have resulted in a cost and schedule variance of greater than 10% from the previous estimate. Logapps supported an internal office of the client in developing a cost estimate for all IT resources required to complete the development, deployment, and maintenance of all systems for the ACA program.

Approach

ACA is a multifaceted program that comprises several projects each implementing a different set of legislative provisions. The team’s methodology for estimating IT resources for these projects was similar throughout, with slight variations from project to project. The team's overall approach and technique was to estimate IT resources for ACA through requirements-based software sizing. After the initial estimate was delivered, Logapps has supported the client in a continuing effort to update the ACA estimate to reflect actual costs as they are incurred for the purpose of a realistic and accurate budget.

Impact

The client internally developed a cost estimate for PPACA in October 2010; however, it did not fully meet best practices for a reliable cost estimate, including no timely updates to ensure accuracy. The client tapped Logapps to provide independent expertise in cost estimation to aid in conducting a structural analysis for all IT resources and associated costs of all system and applications of ACA from development to deployment.

The Logapps team accomplished their goals and objectives by providing a lifecycle cost estimate for the ACA program, and defending the estimate in GAO reviews. The team’s results when compared to previous estimates were far superior with regards to characteristics of best practices noted by GAO. The team included all life-cycle costs, completely defined the program, reflected the current schedule, provided well-documented ground rules and assumptions, properly adjusted the estimate to account for inflation, and provided evidence of management reviews and acceptance. Because of the team’s efforts, the client has been able to communicate a realistic view of likely cost and schedule outcomes to various stakeholders, and make credible and evidence-based decisions in a timely manner.

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Redesign Revenue Accounting Control System

Redesign Revenue Accounting Control System

Logapps developed a fully documented Independent Cost Estimate (ICE) for the redesign of the Revenue Accounting Control System (RACS) for the Internal Revenue Service (IRS). Logapps partnered with PRICE Systems and utilized the TruePlanning model as the estimation framework. The study included separate ICEs for the Development and Operations and Maintenance (O&M) phases, benchmarks for productivity, and risk and sensitivity analysis.

Challenge

RACS is a custodial accounting system of record that controls and reports all significant tax processing activities. The Government Accountability Office (GAO) has cited several material weaknesses with RACS pertaining to traceability and noncompliance with the U.S. Standard General Ledger (USSGL). Additionally, GAO identified that RACS is not currently in compliance with the Federal Financial Management Systems Requirements and Federal Financial Management Improvement Act of 1996. RACS’ noncompliance stems from transactional data not being stored with the correct USSGL account structure. To address these weaknesses, Logapps redesigned RACS to provide more robust capabilities to the Chief Financial Office. The client also needed documentation addressing the cost and risk of the RACS program, independent of their internal estimation program office.  

Approach

RACS’ size estimate was developed through function point analysis. Under this analysis, size is measured from a functional, or user, point of view. Data from a variety of organizations and Subject Matter Experts were collected and normalized. The team heavily leveraged PRICE Systems’ TruePlanning parametric cost model. This model stored the data and ran multiple parametric equations for hardware and software. TruePlanning also allowed for easy data management, verification of results, and ease of documentation, all in compliance with the GAO cost estimating guidelines.


Impact

The TruePlanning modeling approach improved speed, accuracy, transparency, and standardization of the cost estimation process. By interviewing the client to understand the strengths and weaknesses of the legacy program, Logapps created ground rules to develop parametric models. These models facilitated risk assessment, allowing for schedule and sensitivity analysis. Logapps briefed the results to the client, giving the client the confidence to communicate a realistic view of likely cost to the Chief Financial Office. This view allowed the client to successfully schedule outcomes and make credible, evidence based-decisions on future actions in a timely manner.

Today, budgets are stretched and investment dollars are at a premium. Our proven methodology of delivering economic analysis using market-leading tools, such as TruePlanning, allows for an Analysis of Alternatives (AoA) to be developed quickly and robustly. By expediting the analysis process, solutions can be rapidly deployed, allowing for early return on investment. We can help your organization make the most economically beneficial investment decision for tomorrow.

 

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  Student and Exchange Visitor Information System (SEVIS) Life Cycle Cost Estimate

Student and Exchange Visitor Information System (SEVIS) Life Cycle Cost Estimate

Logapps delivered a Life Cycle Cost Estimate to support the business case for the SEVIS Modernization program

 

Introduction

The Student and Exchange Visitor Information System (SEVIS) is a web-based system that tracks and monitors visa admission for non-immigrant student exchange visitors and their dependents in the United States. These students and their dependents are monitored throughout the duration of their participation in the U.S. education system or designated exchange visitor program. While SEVIS is generally considered a successful system, it has required many updates and repairs since implementation. SEVIS Modernization (SEVIS II) will fully replace SEVIS by providing significant new and enhanced functionalities. These functionalities will greatly improve the system while eliminating vulnerabilities and addressing future needs. The client required a Life Cycle Cost Estimate (LCCE) to support the business case for SEVIS II, and to justify the funding of SEVIS II investment for future fiscal years.

Approach

Logapps used COCOMO II and TruePlanning models as the estimation framework for an LCCE and Basis of Estimate. These estimates documented cost elements from Planning, Acquisition, and Operations and Maintenance (O&M) activities for SEVIS (the legacy system) and SEVIS II. The data collected for analysis came from many different sources, including a variety of organizations, Subject Matter Experts, as well as the client. During interviews with the client, they pointed out the strengths and weaknesses of SEVIS. With this information, Logapps compiled the results of the data-gathering process to develop ground rules and assumptions for the estimation process. 

To develop a size estimate for SEVIS II, Logapps used function point analysis to translate system functionality into Source Lines of Code. The team heavily leveraged parametric cost models and risk tools, including PRICE Systems’ TruePlanning, COCOMO II, and Crystal Ball, which allow for easy data management, verification of results, and ease of documentation, all in compliance with the GAO cost estimating guidelines. COCOMO II and TruePlanning use mathematical relationships and historical data analysis to measure and estimate costs associated with the Planning, Acquisition, and O&M activities for SEVIS II. Furthermore, these tools allow hardware, software, information technology (IT), and customized cost elements to be integrated throughout all system development life cycle phases. With the speed and validity of TruePlanning, the estimation team met an aggressive analysis schedule. Thus, this type of approach is well suited for quick-turn, what-if drills and risk assessments. To address the major risks associated with the estimate–including requirements stability, labor rates, development team capability, and performance-based acquisition–Logapps conducted a Monte Carlo analysis, which quantified the sensitivity impacts of key cost drivers.

Impact

The TruePlanning modeling approach improved speed, accuracy, transparency, and standardization of the cost estimation process. After extensive research, interviews, and data collection, Logapps provided a well-supported and documented LCCE, which enabled the client to communicate a realistic view of the likely cost and schedule outcomes, as well as make credible and ultimately justified the funding of a SEVIS II investment for future fiscal years.

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Purchased Care Alternatives Analysis – Evaluation of Business Strategic Options

 

Logapps delivered an Analysis of Alternatives for a claims processing system to support the Department of Veterans Affairs

 

Introduction

The Purchased Care Program Office of the Veterans Health Administration's (VHA) Chief Business Office contracted with Logapps through TCA to provide an independent Analysis of Alternatives in four parts: claims processing, Health Administration Center (HAC) Eligibility System, Fee Authorization Module, and Program Level Approach. This paper represents the completion of the first of those four tasks the review of alternatives for the replacement of the current claims processing system.

Challenge

The U.S. Department of Veterans Affairs (VA) utilizes the Purchased Care Programs to pay for healthcare services provided to veterans and eligible dependents from non-VA healthcare providers. The VA manages the processing of claims through approximately 150 VA Medical Centers (VAMCs) across the United States. Claims processing for the Fee Program has long been outdated and inefficient. As a result, there are often over payments, duplicate payments, and erroneous payments that total tens of millions of dollars annually. 

Approach

The VA provided three alternatives for the Team to analyze and recommend the best solution for a replacement claims processing system. They were:

A.  Build the information technology (IT) systems by the government: CBO Purchased Care custom development solution via VA’s Office of Information and Technology (OI&T), with management and claims processing operations located in Denver, CO.

B.  Purchase a commercial product: CBO Purchased Care commercial-off-the-shelf (COTS) purchase and modification solution, via the VA’s Office of Information and Technology (OI&T), with management and claims processing operations located in Denver, CO.

C.  Purchase services from another Government entity, such as the VA’s Financial Services Center (FSC): FSC COTS solution. Operations located in Denver, CO, and Austin, TX.

Additionally, at the time of the study, non-VA healthcare claims were processed at approximately 150 separate sites, which increased the opportunity for erroneous payments and increased the operational costs of the program. Therefore, Logapps studied centralization of operations in each of the three alternatives. 

Logapps used an analysis model that measured each alternative by four operational parameters: Schedule, Cost, Performance, and Risk. Schedule determined the amount of time it would take to develop and fully deploy the alternative. The Cost category measured both the development and operational costs over aten-year period, with the results provided in then-year dollars. Performance measured the degree to which an alternative met the operational needs of the VA and was expressed as a percentage of satisfied requirements. Risk measured the probability and severity of undesirable events and was depicted against red/yellow/green risk cubes.

A significant amount of research was conducted for the analysis of alternatives. Artifacts were collected and interviews were also conducted. Specifically, the efforts associated with the analysis encompassed the review of over 1,500 pages of documentation collected from HAC, FSC, and commercial vendors; review of over 90 documents obtained through open literature research; seven information gathering trips to five cities in which Logapps conducted in-person interviews and contacted roughly 125 individuals; and two stakeholder workshops for Risk and Performance.

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Financial Management System Hosting– Review of Strategic Business Options

Financial Management System Hosting– Review of Strategic Business Options

Logapps delivered a Business Case Analysis for a financial management system

Introduction

The client is currently using CGI Momentum as its financial management system of choice at its headquarters (HQ) as well as its offices across the country. The client aims to combine these multiple financial applications in order to create a single financial management system that brings greater efficiency and accuracy to the recording and reporting of financial information. On October 1, 2007, the client’s headquarters implemented the Momentum financial system to replace its legacy Central Accounting System (CAS). This system is a web-based commercial off-the-shelf (COTS) product supported by CGI, and acts as the client’s accounting system of record. Other offices of the client use the same Momentum financial COTS package, which acts as their financial accounting system. The system records, manages, and reports on respective financial transactions.

Challenge

While the client routinely pushed upgrades and patched out to each of its offices, each office decides whether or not to install the latest software release, eventually resulting in a variety of versions of the financial application across all offices. Multiple instances of the application raised major configuration and server management issues. The client faced increasing demands to reconcile multiple versions and manage the accuracy and reliability of its data. Given the high costs and configuration issues with maintaining multiple instances, the client was ready for a proactive, centralized approach to managing its financial and accounting operations.       

Approach

Logapps first conducted an open literature review to gain a baseline understanding of industry and federal best practices as well as the market structure for hosting services. Logapps then conducted federal agency research, visiting and holding discussions with the finance divisions of several agencies that use CGI Momentum: Department of Justice (DOJ), General Services Administration (GSA), and Department of State. The outreach to various agencies allowed Logapps to characterize the service levels received from the different agencies, as well as understand the lessons learned at each agency.  Lastly, Logapps conducted market research by requesting quotes based on current legacy technical architecture and JIFMS target architecture.

Impact

Three alternatives were considered in the development of the Business Case Analysis, which was based on research, interviews, and data collection. The analysis team concluded that the client’s best path forward was to host the financial system in a cloud environment and use the current vendor for Tier I and II services. This alternative provided the lowest cost, lowest risk, and overall best value. Logapps based these findings on cost, hosting in a cloud environment is more cost-efficient than other alternatives. Logapps also found that reliability, availability, and security were found to meet or exceed national and organizational standards. Lastly, the risk of implementation and immediate availability made the alternative the most suitable option.

Logapps assisted the client with the construction and implementation of the Service Level Agreements (SLAs) and played a critical part in teaching the importance of making SLAs a mandatory practice across the organization. Additionally, Logapps made a significant impact on vendor negotiations, saving the client over $18M in contract costs.

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