Republican leaders from both chambers of the Legislature are calling for a federal investigation into allegations that technology firm CGI defrauded the state.

In a letter sent Wednesday to U.S. Attorney Tristram Coffin, the lawmakers requested that his office investigate "whistleblower allegations" regarding a potentially "fraudulent software demonstration" in July.

Those allegations received national attention when they were featured in a Newsweek article on the troubled rollout of Vermont Health Connect, the state's new health insurance market.

At the heart of the fraud allegation is whether CGI was able to demonstrate a live connection to the federal data hub, a key component of determining a person's eligibility for coverage through Vermont Health Connect. The article alleges that the demonstration was faked.

Mark Larson, commissioner of the Department of Vermont Health Access (DVHA), has repeatedly said he believes CGI showed a live connection to the federal hub, but the anonymous source cited in the Newsweek article said " the system was in no way operable during that demonstration."

"If it was (CGI) that duped the state officials, we need to know that," said Senate Minority Leader Joe Benning, R-Caledonia.

As a criminal defense attorney, he said, the evidence rises to the threshold where an investigation is warranted.

If the allegations are substantiated, Benning said that should result in prosecutions.


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"CGI confirms that the demonstration conducted on July 26, 2013, included a live interface to the Federal Data Services Hub, with the real time sending and receiving of data," CGI spokeswoman Linda Odorisio said in a statement.

Benning said the request for an investigation is not politically motivated and comes from a desire to ensure that Vermont isn't being duped.

SCOTT JOINS CALL TO DELAY VHC

Republican Lt. Gov. Phil Scott joined House Minority Leader Don Turner, R-Milton, and other members of the House Republican caucus who want Gov. Peter Shumlin to delay requiring anyone to purchase health coverage through Vermont Health Connect until 2016.

Calling for the delay is not about political ideology, Turner said, adding that Republicans are focused on improving access to affordable health care in Vermont.

"That isn't happening because of this non-functioning system," Turner said.

The governor has the opportunity to "push the pause button," until the exchange is fully operational, Turner said, adding that would be the prudent move.

"I'm here today as a business owner," Scott said. "As you know we are the only state in the union that has mandated employers with less than 50 employees to join the exchange."

Scott said the small business requirement has presented him and other business owners with hard choices. The difficulty is choosing a plan through the exchange that works for all his employees, some of whom work seasonally.

Though keeping his company's current health plan is not an option, Scott said it makes sense to delay the requirement on small businesses to give them more time to decide how to handle the transition.

"I think this IT system will eventually work," Scott said. "The exchange could be beneficial in the future, but it's not ready for prime time right now."

Republicans want both the small business requirement, which is unique to Vermont because President Barack Obama pushed back the federal requirement, and the requirement that individuals buy health care through the exchange to be postponed.

"We would hope that the governor would look at this for individuals and businesses," Turner said.

Asked if Vermont could delay the requirement that individuals purchase insurance without running afoul of the feds, Turner said he needed more information.

"We create the law, (and) we should be able to work with the governor to do it," he said.

Five months after it launched, the state exchange website still lacks significant functionality, Turner said.

As evidence that it won't be completed in a reasonable timeframe, Turner quoted a story from WCAX saying that Blue Cross Blue Shield of Vermont CEO Don George told lawmakers that the small business components wouldn't be ready until August.

On Friday in testimony to Senate Finance, George said that BlueCross is ready to transition to the website whenever it's read. "If it's August this year then it can occur then," he said. "If the state asked us to continue our obligation to our businesses for more than one year we certainly would do that."

George said Wednesday he never gave a date for when the small business functionality would come online, and his testimony to lawmakers is being misrepresented.

"We're not close enough to the overall project plan to give an estimate for when it would be completed," he said. "Blue Cross does not have a date by when we think the exchange will be done."

Turner said later that he had not listened to George's testimony, and said it was based on a media report. Turner said he will review the tape of George's testimony, and if he got it wrong will apologize to him and correct it.

"I only put that in to show that it's more than just Republicans who are concerned about this," he said.

Turner said he hopes the focus will stay on Vermonters' ongoing struggle to navigate the exchange.

Republicans were joined at the news conference by Burlington resident Kaitlin Francis, who spoke of the ongoing frustrations and uncertainty she has experienced in trying to purchase insurance through Vermont Health Connect.

"I'm here today as a concerned Vermonter who has had trouble getting health insurance. I'm not part of any political party and I don't really have any agenda here today," she said.

Francis said she is working two part-time jobs while applying to grad school, and went on VHAP after leaving a full-time position.

She said she suffers from multiple chronic diseases that require regular visits to specialists and multiple prescriptions.

Francis began the application process in November. Despite having designed websites for a living, she needed the help of a navigator to complete the application, she said.

After waiting several weeks for an invoice, she called VHC and was told her application had been withdrawn. She completed it again, only to later receive an email that she had signed up for the wrong plan and was eligible for a greater subsidy if she switched.

It took another month, but in January - despite never receiving an invoice - she was able to find out what her premium was and mailed a check.

The check was cashed, but Francis said she has yet to receive an insurance card or policy number.

Francis hasn't postponed any doctor's visits or been unable to fill a prescription, she said, but that could happen soon.

"Currently, I've paid a premium and I don't have a policy number, so I don't have insurance in the eyes of a doctor's office," she said.

In the event she needs to receive care before she's issued a policy number, Francis said she's confident she could get it covered retroactively, because her check is cashed, but it's unclear how or when that would happen.

SHUMLIN SAYS HE WILL STAY THE COURSE

Shumlin said Wednesday that the rollout of the exchange site is a disappointment, and his administration is working to fix it, but said it did not make sense to delay any of the purchasing requirements.

"My administration has exhibited extraordinary flexibility as we recognize the challenges of the website, to ensure that no Vermonter goes uninsured and business doesn't have an undue challenge put upon them," he said.

The 30,000 Vermonters who have bought insurance through Vermont Health Connect represent the highest enrollment in the U.S., he said.

Shumlin touted the thousands of new Vermonters on Medicaid and the thousands now receiving subsidies as well.

"Let's not delay things that are working, let's continue to take the website, take the Affordable Care Act and make them even better," he said.

Direct enrollment has given small businesses access to the products offered through the exchange without having to use the website, Shumlin said.

It appeared that Shumlin said at one point in the news conference that Vermont would continue to allow insurers to direct enroll businesses for the rest of the year.

Asked to clarify what he meant, Shumlin said, "We said to the business community, 'Look, we don't want this to mess you up, so you can go buy exchange product from your insurer' when they buy their policy they're not buying it for a few months or until the website works, they're buying it for the full year."

Asked if businesses will have the option to direct enroll for the rest of the year, Shumlin said they would.

"That's my understanding; does anyone disagree with me on that?" he said looking around the room.

Afterward, aides said Shumlin had misunderstood the question and was referring to the fact that businesses that already directly enrolled would have coverage for the whole year.

Direct enrollment will continue to be an option until the website's small business functionality comes online, they said.

It wouldn't make sense for businesses to directly enroll once the website is working, because the insurers are not able to offer the full range of insurance products through direct enrollment, according to the governor's staff.

It was unclear if businesses that would prefer to directly enroll once the website is functioning will have that option.

Editor's note: We updated this story to include quotes from Don George's on Friday and a clarification that the information Don Turner included in his press release was from WCAX, not actual testimony.