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The Md. health exchange plot thickens

Attorney General Brian E. Frosh didn't quite show his hand in a letter to legislative leaders about investigations into the failure of Maryland's health insurance exchange launch two years ago. But he hinted strongly that he's holding some pretty good cards.

Mr. Frosh's office has already helped recoup $45 million for the state and federal governments from Noridian, the prime contractor hired to build Maryland's Obamacare website. But he is continuing to pursue possible additional litigation against other vendors involved in the effort, and in an unusual move, this week he warned legislative auditors who are conducting their own investigation that they are barking up the wrong tree. Their performance audit is focused so far on how well government officials did their jobs, but Mr. Frosh urged them not to overlook "poor performance of the contractors selected to build the Maryland Health Connection or... misrepresentations made by the contractors concerning the system they proposed to build."

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The word "misrepresentations" ought to get the attention of all those seeking to get to the bottom of what happened in 2013. Much of what has become public so far has pointed toward poor performance, to be sure, whether because of vendor incompetence, the difficulty of the task as state officials conceived it, poor oversight by elected and appointed officials, or all of the above. But to say, as Mr. Frosh does, that his office's investigation "has revealed that the vendors' misstatements about their software and the vendors' poor performance under the contract were the actual and proximate cause of the system's failed launch" suggests that he may be looking into the possibility of fraud, not just non-performance.

By all means, then, the legislature should expand the scope of its audit, even if it means we will have to wait even longer for this long-awaited document. We heavily criticized the legislature for the slow pace of investigations into the exchange that left meaningful answers about who was at fault until well past last year's elections. But even with whatever Mr. Frosh has uncovered, it remains important that the legislature's accounting be as complete as possible.

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After all, it's possible that we will never know everything that his investigators have found. We don't know exactly what Mr. Frosh learned about Noridian because the company settled before litigation and did not admit fault. Given that we don't know which vendors Mr. Frosh may be considering as potential targets for litigation or how much they were involved in the project, we have to take what he says a bit on faith. But the $45 million his office has already recovered buys him some hefty benefit of the doubt. The public has an interest both in answers and in recovering as much as possible. Mr. Frosh is focused on the latter, but the General Assembly needs to leave no stone unturned in seeking the former.

Whatever Mr. Frosh finds, it's unlikely to take state officials completely off the hook. If nothing else, there are signs that the state erred in trying to build too complex a system initially, when the evidence from other states suggests it would have been smarter to start simple and add functionality over time. There have also been indications that politically motivated wishful thinking may have caused former Gov. Martin O'Malley's administration to overlook warning signs before launch. Mr. O'Malley's determination that Maryland would be a national leader in the rollout of the Affordable Care Act — a goal that dovetailed neatly with his presidential ambitions until it backfired — appears not to have been helpful.

But it is no small thing for Mr. Frosh to say that it was not just poor performance but also "misrepresentations" by the vendors that were the "proximal cause" of the website's failure. Unless he's exceptionally good at bluffing, there may be much more to this story than we know.

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