The settlement announced this week between the state and Noridian Healthcare Services over Maryland’s bungled online health exchange is not quite a done deal. The $45 million deal must still be approved by Centers for Medicare and Medicaid Services, the U.S. attorney’s office for Maryland and the North Dakota insurance regulators, who oversee Noridian Healthcare’s parent company….Under the agreement worked out by Attorney General Brian Frosh and approved unanimously Tuesday by the board that oversees the exchange, Noridian will repay the state $45 million of the $73 million it was paid for building the flawed system. The online health insurance marketplace, created under the Affordable Care Act, never worked properly, delaying the applications of thousands of people without employer health care and in need of coverage….Massachusetts appears to be the only other state to have experienced technical difficulties that it has publicly settled with a main contractor. In that case, the state agreed to pay the company $35 million more to wind down operations; however, the Massachusetts attorney general launched an investigation of the troubled exchange that could recoup up to $12 million from CGI, a cap agreed to as part of the settlement, according to a Boston Globe report. Oregon remains in litigation with its main contractor and isn’t likely to settle soon…
Noridian to pay $45 million to state, U.S. government for flawed exchange
Source: Josh Hicks, Washington Post, July 21, 2015
The prime contractor hired to build Maryland’s flawed online health exchange will pay $45 million to the state and federal governments to avoid a lawsuit over its performance, Attorney General Brian Frosh announced Tuesday. Maryland’s health exchange drew national attention last year when the Web site crashed moments after launching. It was plagued by glitches for months afterward. Noridian Healthcare Solutions agreed to pay $20 million upfront and an additional $25 million in annual installments of $5 million over five years, Frosh’s office said. The payments represent 61 percent of the total paid to the company, based in Fargo, N.D., for the development and launch of the Web site….
States that have struggled with healthcare sites consider lawsuits
Source: Maeve Reston, Los Angeles Times, March 29, 2014
Enrollments in the nation’s healthcare program have nearly concluded, but for states whose insurance exchanges have been crippled by technical problems, a difficult phase is just beginning: potential legal battles and a race to overhaul their systems before federal grant money dries up.
Officials in Oregon, Massachusetts and Maryland are exploring legal options as they sever contracts with those who created their sites. All three states are considering a move to the federal exchange, which had its own grievous start-up problems but is now largely stable, or licensing the technology of a more successful state such as Connecticut. …
…Two recent reports — an independent review commissioned by Kitzhaber and a federal “technical review” obtained by the Oregonian — outline potential legal arguments for the two sides. The federal technical review suggested that Oracle threw “bodies, rather than [a] skill set” at the website problems, but also found that the state exchange had no leverage in its contract “to make [Oracle] accountable” when things went wrong….
….In Maryland, where the state exchange board recently voted to end its $193-million contract with main contractor Noridian Healthcare Solutions, the question of blame has gone in circles. Last fall Noridian and one of its subcontractors, EngagePoint Inc., began fighting in court over the website failures. Shortly before the case moved to arbitration in late February, EngagePoint alleged that Noridian “lacked the expertise, resources and commitment actually required” to develop the website. Noridian said in a statement that EngagePoint’s claims were “false, unsupportable and will be contradicted by evidence” and pointed to hundreds of fixes that it had made in attempts to repair the system….
Maryland set to replace troubled health exchange with Connecticut’s system
By Mary Pat Flaherty and Jenna Johnson, Washington Post, March 28, 2014
Maryland officials are set to replace the state’s online health-insurance exchange with technology from Connecticut’s insurance marketplace, according to two people familiar with the decision, an acknowledgment that a system that has cost at least $125.5 million is broken beyond repair….