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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