Maryland’s health-exchange board voted to fire the state’s prime information technology contractor for Maryland’s defective health care exchange, the state’s health secretary told lawmakers Monday.

Dr. Joshua Sharfstein told a legislative oversight panel that the board voted during a meeting Sunday night to end the role Noridian Healthcare Solutions has served as the prime contractor.

Maryland’s exchange has been plagued by computer problems that have made it difficult for people to enroll through the online exchange. While state officials say many improvements have been made since its Oct. 1 debut, problems were so rampant that lawmakers passed emergency legislation last month to create a backup plan for people who tried to enroll for coverage Jan. 1 but couldn’t through no fault of their own. Maryland has paid Noridian about $65 million to build the troubled exchange.

The state will transition the role of prime IT contractor to Optum/QSSI, the general contractor that the exchange hired in December, Sharfstein said.

“This transition will support the exchange’s goal of enrolling as many Marylanders as possible in quality, affordable health care by the close of open enrollment on March 31,” Sharfstein said.

The health secretary said Optum/QSSI will bring additional IT expertise to the project. He also said the company will contract with key existing subcontractors to improve and maintain the current technology underlying the Maryland Health Connection in the short term.


“The exchange is preserving all rights to seek damages against Noridian and its subcontractors for problems with the IT system,” Sharfstein said.

Tom McGraw, president and CEO of Noridian, said in a statement that the company and the state are negotiating a mutual agreement regarding the transition of Noridian’s role as prime contractor.

“Throughout the past four months, Noridian has complied with its contractural obligations under tremendous pressure and constant changes by the state,” McGraw said in a statement, adding that Noridian has implemented 163 infrastructure fixes and performance-tuning activities.

McGraw also said the company completed 445 enhancements and bug fixes, including nine critical incidents identified by Gov. Martin O’Malley’s administration.

Isabel FitzGerald, the state’s secretary of information technology, told the Joint Oversight Committee on the Maryland Health Benefit Exchange that she set clear benchmarks in December for the Noridian team to meet, and they were not achieved. She said Optum will assume responsibilities for the development work and the maintenance and operation of the existing system. FitzGerald said the decision was effective Monday.

“The majority of that core work is done by subcontractors today, and those subcontracts will be assigned to Optum,” FitzGerald said.


Maryland is one of 14 states that is running its own health exchange.

FitzGerald also provided an update on the current state of the information technology system. Since Oct. 1, there have been a total of 1,538 defects. She said 1,072 of them have been closed. A total of 382 remain open, and 24 of those are currently in progress.

The state continues to evaluate alternatives to the present IT structure for after the close of open enrollment March 31, with an eye toward the next enrollment period that begins in November. The state is considering adopting technology developed by another state, joining a consortium of other states, partnering with the federal exchange or making major fixes to overhaul Maryland’s existing system.

Asked for a timeframe for a decision on how to move forward, Sharfstein said it would be “weeks, not days, not months.” Sharfstein also said “it is quite possible” the decision will be made before the current open enrollment period ends.

Sen. Thomas “Mac” Middleton, D-Charles, said he believes the Legislature should be informed about how officials decide the next step before a decision is made.

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