Maryland fires contractor behind troubled health exchange

State officials in Maryland voted Sunday to fire the contractor that built its health insurance exchange after numerous technical glitches caused the state’s enrollment numbers to lag behind projections.

Maryland signed the 5-year contract worth $193 million with North Dakota-based Noridian Healthcare Solutions two years ago to set up and run the Maryland Health Benefit Exchange, but the site failed within minutes of its Oct. 1 launch and has struggled since.

At a hearing Monday before Maryland’s General Assembly’s joint oversight committee, Secretary of Technology Isabel FitzGerald said the website has major architectural problems that have caused 1,538 defects since going live. Of those, 1,072 have successfully been resolved.

“By moving now, we improve the quality of work,” FitzGerald said. “The progress was simply not satisfactory.”

Optum/QSSI, a Maryland-based company brought in last December to help with the initial problems, will replace Noridian as the prime contractor. Noridian will help Optum/QSSI with the transition, providing technical support until the end of March.

“Throughout the past four months, Noridian has complied with its contractual obligations under tremendous pressure and constant changes by the state,” said Tom McGraw, Noridian’s president and CEO, in the statement.

It is believed that the numbers of changes the state requested were in the hundreds, which contributed to the challenges facing the rollout, according to multiple reports.

Maryland was one of 14 states in the country that chose to build its own health insurance marketplace instead of relaying on the federal government’s solution, which faced its own set of very public problems during its launch.

As of Monday, Maryland had paid Noridian $67.9?million for its work and had unpaid invoices totaling $12.9?million, according to reports, but the state could pursue legal action to recoup damages.

The state has budgeted more than $260 million to build the health care exchange with a large portion of that coming directly from the federal government. This year, problems with the launch will cost the state at least $33 million more than officials originally planned to spend, including money paid to Optum/QSSI to help repair the site.

The state also was compelled to enact emergency legislation to help insure those who could not sign up and had to begin the year with no coverage.

Enrollment has lagged behind expectations, with only 33,251 residents having signed up for a private plan through the exchange as of Feb 15 — a number that is five times less than officials said they originally wanted.