Maryland has terminated its contracts with the company hired to build and operate the state’s online health exchange, which has been riddled with problems since its launch in October.
The board overseeing the exchange voted Sunday night to sever ties with Noridian Healthcare Solutions, and the state reserves the right to take the company to court for damages, officials said Monday.
Critics of the botched rollout said Noridian should have been replaced long before now, and they renewed calls for an investigation into why Maryland stumbled with implementation of the Affordable Care Act. The website is so flawed that state officials are considering abandoning it after open enrollment ends next month.
The decision ends a $193 million deal for North Dakota-based Noridian to build and host the online insurance marketplace for the next five years. For now, the state will rely on Optum/QSSI, a Columbia-based company hired in December to help fix Maryland’s exchange.
Officials said the move would help more people sign up for health insurance before the March 31 deadline.
“By moving now, we improve the quality of work,” said Isabel FitzGerald, secretary of the state’s Department of Information Technology who stepped in to help fix the exchange.
FitzGerald said she recommended the nine-member Maryland Health Benefit Exchange Board cut ties with Noridian after it missed a series of goals to fix the website.
Noridian officials said in a statement the company is “negotiating a mutual agreement regarding the transition of Noridian’s role as prime contractor” with the state and will continue to offer 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.
The state Senate’s Republican leader likened the site’s continuing problems to “an iceberg.”
“The further down they go, the more and more problems they discover,” said Senate Minority Leader David R. Brinkley, who serves on the legislative panel overseeing repairs to the exchange.
U.S. Rep. John Delaney, a Democrat who has been critical of the implementation of Obamacare in Maryland, said “the real question is why it took months to make this move.”
Noridian oversaw development of the website, which crashed the day it went live and has technical problems that persist. Only five weeks remain for people without health insurance to buy it or face a tax penalty, and state officials said that Optum can better repair the site to handle a rush of last-minute buyers.
“The progress was simply not satisfactory,” FitzGerald said in an interview, adding that Optum has “got a deep bench” of experts to help.
At a hearing Monday before the General Assembly's joint oversight committee on the exchange, FitzGerald said there are “major architectural” problems with the exchange, aside from the 1,538 “defects” that have been discovered since the exchange went live. So far, 1,072 have been resolved, she said.
Most of the repairs have been done by subcontractors hired by Noridian; those companies will now report to Optum instead, FitzGerald said.
Noridian is embroiled in a legal fight with another exchange contractor, EngagePoint, over who bears responsibility for the flawed website.
The switch from Noridian “gives the exchange the best chance of being fairly productive,” said Dr. Peter Beilenson, CEO of Evergreen Health Co-op, which sells policies through the exchange.
The technical problems have left the state far behind its goal to sign up 260,000 people for insurance, either through private policies or through Medicaid. Health Secretary Dr. Joshua M. Sharfstein said Monday the state would retain that goal, even though it recently learned it was mistakenly based on a projection for two years, not one.
The state also has abandoned work on another piece of implementing the Affordable Care Act: a health exchange for small businesses. Noridian’s contract included the small-business exchange.