Maryland exchange to get $45M from contractor

The company primarily responsible for operating Maryland's health insurance exchange has agreed to repay the state and federal government $45 million to settle claims that it mishandled its duties, the Maryland attorney general's office announced Tuesday.

Maryland's exchange crashed when it launched and suffered ongoing technical problems, including a glitch that left up to 5,000 people thinking they were fully enrolled even though they weren't, FierceHealthPayer previously reported. State lawmakers considered switching to the federal exchange, but they ultimately settled on switching to Connecticut's successful technology platform.

Noridian Healthcare Solutions will pay $20 million upfront and $25 million more in annual installments of $5 million over five years--representing 61 percent of the total amount the company received.

"This company never delivered on what it promised, and, as a result, tens of millions of taxpayer dollars were wasted, and thousands of Marylanders suffered delays and frustration," Maryland Attorney General Brian Frosh said in the statement. "This settlement sends a message that the performance was unacceptable, and that those responsible will be held accountable."

But not everyone is pleased with the settlement. Noel Isama, director of transparency and accountability with Common Cause Maryland, said that Noridian's payments don't address the original problems that prevented the exchange from working, particularly lack of accountability in the procurement process, the Baltimore Sun reported.

Maryland is the second state to settle with its exchange contractor. Massachusetts reached an agreement to pay its main contractor, CGI, $35 million, in order to severe ties with the company. Meanwhile, Oracle sued Oregon and blamed the state's mismanagement for the state exchange's failure; this case, however, isn't likely settle soon, David A. Friedman, associate professor of law at Willamette University College of Law in Salem, Oregon, told the Sun.

To learn more:
- here's the Maryland AG announcement
- read the Baltimore Sun article

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