With the staggered rollout of the Maryland health exchange's new website going as planned — and about 500 applications for health insurance completed in the first two days — officials paused to offer a window into the costs associated with the old system deemed so dysfunctional that it had to be scrapped.
The exchange released details Monday of what it paid to Noridian Healthcare Solutions, the North Dakota company that served as the prime contractor until April, when the board voted to switch to technology used in Connecticut.
The exchange previously reported paying nearly $73 million on $193 million worth of contracts to Noridian for its website, an online marketplace for the uninsured created under the Affordable Care Act. Officials including Gov. Martin O'Malley said they would sue the company to recoup some money, but both sides agreed to delay litigation for now, and many outside observers believe they are working on a settlement.
The exchange released a one-page document of payments made since February 2012, when the exchange board approved the first contract with Noridian. Officials declined to comment further Monday but have said they would release the details out of public interest.
While the disclosure accounts for more than half of the more than $355 million in contracts awarded by the exchange, officials have not revealed how much of the remaining $162 million has been paid to other contractors.
According to the document, payments to Noridian include: $42.9 million on a $51.4 million contract for design, development and implementation of the exchange website; $8.1 million on a $19.1 million contract to build a small business exchange; $5.3 million on a $8.6 million contract to connect the exchange website to the legacy systems; $3.2 million on a $76.5 million contract over five years to maintain and operate the system after it launched; and $10.7 million on a $35 million contract over five years to host the website.
The exchange also paid $2.2 million on $2.9 million worth of change orders with Noridian that involved additional licenses, training resources and a staging environment.
Noridian also was paid $402,000 at the time of its contract termination for services provided by the company's information technology staff to support the transition to a new prime contractor.
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Noridian officials have said that it delivered a system that allowed the exchange to exceed its overall enrollment goals under "very difficult circumstances, including evolving federal regulation that led to the state increasing the scope of work for [Noridian] and its contractors, while timing for testing and delivery of the system when unchanged."
Monday, Tom McGraw, Noridian's president and CEO, added: "Noridian Healthcare Solutions' costs exceeded the $73 million it received from the state by $51 million. Whether or not [Noridian] recovers some of that money from other contractors, it still will have lost many millions of dollars."
The exchange enrolled almost 460,000 people in health insurance during the last open enrollment that began October 2013, though all but 81,000 were in Medicaid, the federal-state program for the poor.
This year's open enrollment began Saturday with an enrollment fair in Glen Burnie. Access through the call center began Sunday and expanded through Tuesday, but the website won't open to the general public until Wednesday.
So far more than 2,000 people have created accounts, 1,500 started applications and about 500 completed them, the exchange said. Users and officials reported over the weekend that the process was much smoother than last year.
"Saturday was a great start with a lot of enthusiasm from consumers and navigators," said Carolyn Quattrocki, executive director of the Maryland Health Benefit Exchange, in a statement. "We are looking forward to a very successful open enrollment season."