Md. votes to adopt health exchange software used in Connecticut

The board overseeing Maryland's health exchange voted unanimously Tuesday evening to scrap its dysfunctional website and adopt software developed by Deloitte Consulting and used by the more successful health exchange in Connecticut.

The software is free for Maryland to use but Health Secretary Joshua M. Sharfstein will negotiate an emergency $40 million to $50 million contract with the software company to develop the site. Isabel FitzGerald, secretary of the state's Department of Information Technology, who stepped in to help fix the exchange, will oversee the project.


The move comes a day after open enrollment under the federal Affordable Care Act ended Monday, when consumers still were having trouble with the glitch-prone website. Maryland is the first state with a troubled website to switch to another system.

"Our launch did not go as we had planned, our launch failed," Gov. Martin O'Malley said at a press conference after the vote. "We don't always succeed on our first try, but we don't give up. And we usually hit our goals."


The Democratic governor also blamed IBM and its software for the website's technical problems. "We take responsibility for fixing this, and we'll see IBM in court," O'Malley said.

IBM said in a statement that it went beyond its contractual obligations to help Maryland meet enrollment goals and that state officials didn't properly manage the exchange.

"In brief, the state's enrollment goal was reached despite its own failures of leadership," said IBM spokesperson Mitch Derman. "We will now turn our attention to a successful transition of the project."

While state officials hope the new system will be in place for the next open enrollment period that begins in November, critics said the project has been mismanaged and raised questions about the cost to move to another site.

The state has spent tens of millions of dollars on the existing site and now plans to ask the federal government for more money and its blessing to develop the new website. The exchange also might need up to $3 million in start-up money from the state for the new website.

Some questioned whether a new system would even work.

"The board was right to stop throwing away even more taxpayer dollars on a system that does not work," said Rep. Andy Harris, the lone Republican in the state's Congressional delegation who has pushed for a move to the federal exchange.

"Regrettably, as opposed to joining the federal exchange, going with the Connecticut technology will still cost Marylanders tens of millions of dollars more," he said. "Plus, there is no assurance it will work in Maryland given the short time until the new open enrollment period this November."


Even Democrats who were strong supporters of the Affordable Care Act chaffed at the way the system was set up.

Senate President Thomas V. Mike Miller questioned why government officials oversaw the creation and launch of the website rather than somebody from the private sector with information technology experience.

"The rollout of this leaves a lot to be desired," he said. "You can blame it on the contractor, blame it on the subcontractor, but the buck stops with state government. And it hasn't been done properly. State money has not been used wisely, and we need to move forward as expeditiously as possible in getting this right."

Exchange officials had considered moving to the federal portal or fixing the current site.

But fixing the current site would have cost $66 million and taken a year to complete, putting the state beyond the next open enrollment period, exchange officials said in a memo. Moving to the federal site would have cost as much as $53 million, also would have taken too long, and would have required the state to build a separate system to handle Medicaid.

The website crashed immediately after launching Oct.1 and has been riddled with technical problems ever since. The exchange's executive director resigned under pressure, and officials later fired the website's main contractor, Noridian Healthcare Solutions, because of the problems.


The state has spent $125 million in mostly federal funds on the exchange, including about $55 million to Noridian.

Noridian had used IBM software to determine eligibility for subsidies. Exchange officials now say that software is to blame for ongoing troubles and may seek to recoup money from contractors.

"We would like to be sitting here and saying 'Wow, Kentucky and Connecticut saw that Maryland worked well,' but our contractors let us down on that score and did not deliver that which they promised," O'Malley said. "And then when they said they could fix it, were incapable of fixing it. This is the real world, this is sometimes how things happen."

Noridian has said it also complied with contractual obligations despite constant changes by the state.

Exchange officials have kept the system running through triage fixes and will continue to do so for several weeks as workers enroll thousands of people who could not use the website or get through to the call center before the Monday deadline.

Those without coverage will be fined under the law. State officials agreed not to penalize those whose applications were stuck in the system and those who attest to the fact that they couldn't log on or reach the call center, where all circuits were busy Monday.


Despite the technical problems, state officials say they had a successful enrollment period and that thousands of Marylanders who didn't have coverage can now see a doctor.

As of Monday, 293,000 people had enrolled for coverage, including 63,000 in private plans. The state could surpass 300,000 after those stalled by technical problems have enrolled, Sharfstein said. Others, who didn't need subsidies, applied directly with insurers and could add to the total.

"We closed really strong ... in the face of some very significant IT challenges," Sharfstein said during the meeting.

Carefirst BlueCross BlueShield, the largest insurers, told exchange officials it enrolled as many people directly as the number who enrolled with the insurer on the exchange.

A consultant with KPMG consultants, who advised the Connecticut exchange, said that state's site is far easier to navigate than Maryland's and allows users to see all of their options and costs without creating an account, a point on Maryland's site that had become an early bottleneck for users.

"Connecticut had a pragmatic and reasonable approach to what could be achieved by [the launch]," said Paul Hencoski, who leads KPMG's health exchange practice.


Connecticut's site had few glitches when it launched, enrolling close to 200,000 people in health insurance, including about 77,000 in private plans, according to its exchange CEO Kevin Counihan. The state is smaller and has fewer uninsured than Maryland.

That state had such success that officials began marketing its services to other states and has been contacted by more than a half dozen. Counihan expects to work with another state or two over the next two enrollment periods. He said Connecticut could run another state's system outright or provide consulting services.

Sharfstein said Tuesday after the vote that Maryland did not expect to pay Connecticut directly for services.

Despite the troubles in Maryland, several health care advocacy groups celebrated what they considered the success of health reform during a press conference Monday. At Health Care for the Homeless, officials said more than 70 percent of people coming in for care are now covered by Medicaid, compared to about one third prior to reform.

People are now getting better care and the organization can focus more of its efforts and dollars on finding people homes, said Kevin Lindamood, president and CEO of Health Care for the Homeless.

"This picture is only going to improve as we keep doing our work," Lindamood said.


Tony Willis is one of those people who benefited from expanded Medicaid eligibility under the new law. The 62-year-old previously had insurance through the state's Primary Adult Care program for low-income adults, but found that it only covered basic care. Since getting Medicaid he has seen a dermatologist who prescribed cream for an itchy rash on his legs that he had for months. He has gotten glasses and has a dentist appointment to fill "a mouthful" of cavities.

"When I got that card in the mail, I was grinning up a storm," Willis said.

Health care advocates said they were confident the state would resolve the problems with the website, which they believed would boost enrollment even further during the next period.

Dr. Peter Beilenson, founder of Evergreen Health Co-op, one of four insurers offering plans on the exchange, said he supports moving to the Connecticut site. But he noted there would be an extra cost for insurers to switch.

"The concern we have is there should be some kind of reimbursement to those small carriers who have to reconfigure to a whole new system because of no fault of their own," he said.

The exchange's failure has become a potential political liability for both O'Malley, who has presented himself as a technologically-savvy leader as he contemplates a bid for the White House, and Lt. Gov. Brown in his race to succeed O'Malley.


Both Republican and Democratic candidates for governor have attacked Brown for the site's failure. Brown, the administration's point man on health care reform, also blamed the contractors for the exchange debacle, saying "our vendors failed to deliver as promised."

An earlier version misstated who Paul Hencoski said had a pragmatic approach to the launch of Connecticut's exchange. The Sun regrets the error.