Bluefield Daily Telegraph, Bluefield, WV

Virginia State News

February 7, 2014

Documents: Health exchange contractors squabbled

McLEAN, Va. — A new court filing provides details of the behind-the-scenes squabbles among private contractors that contributed to the poor performance of Maryland’s online health exchange.

The papers filed Friday in federal court in Baltimore allege that the prime contractor tasked with setting up the health exchange, North-Dakota-based Noridian Healthcare Solutions, lacked the expertise and resources from the outset to get the job done. The papers allege that Noridian considered backing out as prime contractor back in June.

The allegations are made by a Maryland-based subcontractor, EngagePoint, that was fired by Noridian. The two companies now have competing lawsuits against each other.

In previous court papers, Noridian said it fired EngagePoint for its “repeated failures to perform satisfactorily and cure its prior breaches of the Subcontract Agreement.”

Noridian CEO Tom McGraw called the statements false and unsupportable. He said in an emailed statement Friday evening that EngagePoint’s allegations “will be contradicted by evidence that we present in court and arbitration.”

McGraw also said Noridian will continue to work with Maryland to improve system performance.

A spokeswoman for Maryland’s Department of Health and Mental Hygiene declined comment on the allegations.

EngagePoint declined comment beyond what was in the filings.

In the papers filed Friday, EngagePoint says that in June 2013 Noridian, “in order to conceal its misrepresentations about its purported expertise, ... broached the possibility that EngagePoint would assume responsibility for the project, something that would require the State’s consent.”

EngagePoint declined to take over as prime contractor.

Maryland officials have said they received assurances leading up the Oct. 1 debut of the website that everything would be ready.

Noridian, which has an extensive history as a Medicare claims processor, maintained primary responsibility for the $62 million contract to set up the exchange. EngagePoint says in the court filing that Noridian should have submitted change orders to the contract that would have added $30 million to the contract, but failed to do so.

The performance of Maryland’s exchange was so bad that Rep. John Delaney, D-Md., proposed that Maryland abandon the state exchange altogether and cast its lot with struggling federal exchange. Maryland has remained committed to its own exchange and has passed legislation last month that will allow people to get retroactive insurance if the balky website prevented them from enrolling.

A legislative panel recently established to determine what went wrong with the website and how to get it fixed holds its first meeting Monday.

 

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