Health & Human Services

Nevada Drops Health Exchange Contractor, Partners with Feds

May 20, 2014
 

Xerox is out.

The board of the Silver State Health Insurance Exchange voted this morning to dump the contractor that botched the building of its Nevada Health Link website, and to move partly into the federal system for at least the next year.

The move would let the state exchange keep its autonomy and its member-based funding, and to allow the marketplace to switch to an operational website from another state for its 2016 enrollment period.

The change to a new system could cost as much as $57 million in addition to the $72 million contract the exchange already had with Xerox. But exchange officials said they’ve already applied for federal grants to cover the cost. Plus, the cost of buying another system may drop considerably by the time the exchange is ready to go forward in late 2015, state officials said.

The board’s decision ends a troubled, two-year relationship with Xerox, which fell woefully behind schedule on its Nevada Health Link build. The system debuted on Oct. 1 to hundreds of technical flaws and software glitches, and sign-ups have been held to about a third of the initial enrollment target of 118,000.

Xerox spokeswoman Jennifer Wasmer in a statement called the board’s decision “extremely disappointing.”

“Xerox has been unwavering in its commitment to Nevada Health Link and to getting all aspects of the exchange right. We have engaged the full breadth of Xerox’s resources and have brought in external experts to meet that goal,” Wasmer said.

She also pointed to the “considerable accomplishment” of the exchange in supporting Medicaid expansion in Nevada. About 190,000 Nevadans are eligible for Medicaid through Nevada Health Link. More than 10,000 people have also enrolled in private health plans in a special enrollment period that began April 1 and ends May 30.

The system’s need for a special enrollment period reflected the technical challenges that plagued it from the start.

The exchange board began looking for options in February. This morning, board members considered several choices.

Alternatives included sticking with Xerox and its current system but hiring a third party as project manager, or continuing with Xerox and becoming a supported, state-based marketplace for the next year, using federal eligibility and enrollment systems until Nevada Health Link could get on its feet.

For both options, the $10 million to $12 million in needed fixes would be “absorbed” by Xerox’s original contract, at no additional cost to the state, the exchange staff’s report said.

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