In a letter last month, the governor blamed the IBM software for everything from a "black hole" where applications were irretrievably lost to inaccurate determinations for whether consumers should get financial assistance from the government for their coverage. The letter was made public Friday.
IBM's Curam division is one of four primary software vendors on the MNsure health insurance exchange project, and Dayton sent the letter to a company official Dec. 13.
The letter preceded a "tech surge" in late December, in which IBM dispatched dozens of workers to St. Paul in a last-minute effort to repair the website prior to a Dec. 31 deadline for coverage that started Jan. 1.
"Your product has not delivered promised functionality and has seriously hindered Minnesotans' abilities to purchase health insurance or apply for public health care programs through MNsure," Dayton wrote. "I request that you immediately deploy whatever people or resources are needed to correct the defects in your product that are preventing Minnesotans from obtaining health insurance through MNsure."
In a statement, IBM spokeswoman Mary Welder said the majority of concerns identified by Dayton have been addressed. She said the company's software issues are not the only ones that impact performance of the MNsure system.
"IBM continues to work closely with the other suppliers and the state of Minnesota to make MNsure a more positive experience for Minnesota citizens," Welder said. "As an example, the percent of suspended applications for coverage decreased by two-thirds between mid-December and early January, and the system is now handling cases at over a 95 percent daily success rate."
Republicans said the Dayton letter was simply an attempt to shift blame away from his administration.
"For weeks now, Minnesotans have received conflicting information from MNsure about whether they have coverage, what coverage they have and how many more hoops they have to jump through to obtain coverage," said Rep. Greg Davids, R-Preston, in a statement. "Enough is enough -- what happened to 'the buck stops here'?"
Minnesota launched the MNsure health insurance exchange last year to implement the federal Affordable Care Act, which requires almost all Americans to have coverage or pay a tax penalty. While nearly 68,000 people are in the final stage of enrolling in coverage through the MNsure website, many have been stymied by website glitches and lengthy waits at the health exchange call center.
In recent weeks, state officials have acknowledged links between MNsure problems and the IBM Curam software, which determines if applicants are eligible for federal tax credits that discount premium costs or for income-based public health insurance coverage.
State officials have said that it was a problem with the IBM software, for example, that prompted them to start rerunning 30,000 applications in late November because an unspecified number of initial eligibility determinations were wrong. When IBM's system was unable to process thousands of paper applications, state workers had to do so by hand.
But in public comments, state officials have stopped short of squarely blaming IBM for all of MNsure's problems. The chairman of MNsure's board of directors, for example, repeatedly thanked IBM for sending workers in December to help both the health exchange website and call center.
Dayton's letter, however, says that state officials realized in early October that there were serious problems with the IBM product. For starters, it allowed users to submit multiple applications for health insurance, so that some consumers were able to enroll in different plans multiple times, according to Dayton.
The software also let consumers withdraw applications but didn't close out the enrollment elsewhere in the system, Dayton wrote. That created problems for people who expected refunds.
The IBM software failed to properly perform eligibility determinations and verify applicant information as required by federal law, Dayton wrote. He alleged that IBM knew this functionality wasn't available but didn't tell MNsure.
The flawed eligibility determinations meant that families had their applications inappropriately placed into pending status, Dayton wrote, adding that "MNsure had no ability to assist the consumers." Similarly, MNsure could not fix cases where families had received incorrect eligibility determinations, Dayton wrote.
For four weeks, MNsure worked with IBM to resolve the verification and eligibility problems in large batches, according to Dayton's letter, but the fixes never worked.
"MNsure staff needed to spend thousands more hours manually addressing the issue on a one-by-one basis," the governor wrote. All the manual work slowed the process of sending information about enrollees to insurance companies, according to Dayton, and mail invoices to consumers. It also compounded wait times at the MNsure call center, which have exceeded two hours in some instances.
Finally, Dayton highlighted a problem where some consumers "get stuck in a queue and their applications are not able to be processed."
"Curam product staff do not know why this is occurring, have been unable to identify which applications are in this queue and have not been able to remove these Minnesotans from the queue to process their applications and get them coverage," Dayton wrote.
Dayton's letter was first reported Friday by MinnPost, an online news web site.
It's not exactly clear how the issues highlighted by Dayton coincide with subsequent disclosures by state officials.
In late December, MNsure said it was contacting 1,000 consumers who needed to withdraw their applications and start over because of problems. The health exchange also said that IBM workers would help with another 1,100 applications that needed to be rescued from the system.
The Department of Human Services, which administers public health insurance programs, said in December that it was manually processing more than 2,000 paper applications. Manual processing also was needed for another 2,400 applications because of a glitch in the caseworker portion of the IBM software, which Dayton addressed in his Dec. 13 letter.
So, to some extent, the letter might simply summarize a series of challenges that have come to light over the past month. But it is the first public indication that state officials feel they were misled by IBM.
"During the 2011 procurement for MNsure's information technology services, Curam represented that the ... product was 90 percent complete and ready out-of-the-box," Dayton wrote. "We now know that the product is still not 90 percent complete in December of 2013, and that your product has significant defects, which have seriously harmed Minnesota consumers."
In her statement, Welder of IBM said her company is working to sustain MNsure improvements with on-site services and technical resources that go beyond the scope of its contractual responsibilities.
One of the company's senior vice presidents "has made this project a priority and has been in regular contact with Governor Dayton and the MNsure leaders," Welder said. "Although our original role on this project was limited, we are bringing the full resources and capabilities of IBM to the state because of the importance of the success of the project."
Officials have said that no state money is being spent on the IBM workers who were sent to St. Paul in late December. MNsure already is paying at least $3.96 million to IBM Curam -- the funds go through a company called Maximus, which has the contract to build the entire MNsure system. A spokeswoman for Maximus declined comment on Friday.