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Maryland health site contractor to pay $45M

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ANNAPOLIS, MD. >> The main contractor in Maryland’s initially flawed health care exchange website has agreed to repay $45 million to avoid legal action over its performance, officials announced Tuesday.

Maryland’s website crashed right after opening Oct. 1, 2013, as part of President Barack Obama’s health care law, and it wasn’t the only state to have problems. Hawaii, Oregon and Nevada abandoned their state-run exchanges and now use the federal one.

Hawaii spent $130 million in federal money creating the Hawaii Health Connector, and earlier this year decided to ditch the troubled system in favor of the federal Obamacare program in a transition expected to be completed by Oct. 15.

Hawaii officials estimate it will cost the state $30 million to make the move. As in Maryland, officials overseeing Hawaii’s exchange have said that at least some problems had to do with contractor work. Operators of the Hawaii exchange quit paying Mansha Consulting after a state audit in January concluded that Virgin ia-based Mansha failed to integrate the exchange with a state system handling Medicaid health insurance for low-income residents.

Mansha, which was paid at least $14.7 million, was listed in the audit as the second-highest-paid vendor with roughly $22 million in contracts. The company mainly served as a project manager supervising work of the Hawaii Connector’s information technology developer CGI Group Inc., which won $74.2 million in contracts but delivered a problem-plagued system.

Jeff Kissel, the Hawaii Connector’s executive director, could not be immediately reached Tuesday to say whether any contractor repayments are being sought.

In Maryland, Noridian Healthcare Solu tions agreed to pay $20 million upfront, Maryland Attorney General Brian Frosh said. The rest will come in yearly installments of $5 million for five years. The payments represent a recovery of 61 percent of the total paid to the company for the failed website.

“This company never delivered on what it promised, and, as a result, tens of millions of taxpayer dollars were wasted and thousands of Marylanders suffered delays and frustration,” Frosh said of Noridian. “This settlement sends a message that the performance was unacceptable and that those responsible will be held accountable.”

The state later rebuilt its website with other technology.

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