FARGO – The Maryland Health Benefit Exchange will sever its ties to Fargo-based Noridian Healthcare Solutions when the current open enrollment period ends March 31.
The decision, announced Monday, ends a rocky relationship through a mutual agreement. The new prime contractor for the Maryland health insurance marketplace will be Optum/QSSL, based in Columbia, Md.
During the interim, Noridian will continue to support the Maryland exchange as enrollments occur through the end of March, Tom McGraw, Noridian’s president and chief executive officer, said in a statement.
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“Noridian is committed to providing access to affordable care to all Marylanders and will continue to do so by working with the State on ensuring a successful transition of software, licenses and subcontractors supporting the goals of MHBE,” McGraw said in the statement.
After the transition, a new vendor will host the state-run exchange.
Maryland is “preserving all rights to seek damages against Noridian and its subcontractors” for problems with the online marketplace, Joshua Sharfstein, chairman of the Maryland Health Benefit Exchange, said in a statement.
Noridian has met its contractual obligations to Maryland “under tremendous pressure and constant changes by the state,” McGraw said in his statement, adding that his firm has made 163 infrastructure “fixes” and 445 “enhancements” in the exchange.
Noridian and its main subcontractor, EngagePoint, have been embroiled in a federal lawsuit in a dispute involving creation of the exchange. Efforts to mediate the dispute failed, and the two companies are involved in arbitration.
Noridian severed its contract with EngagePoint last October, and the two companies have exchanged pointed allegations about the other’s failures and shortcomings.
EngagePoint has alleged that Noridian lacked the expertise to take on the Maryland exchange. Noridian has denied EngagePoint’s allegations.
As of earlier this month, Maryland paid Noridian $65 million for its work on the exchange, and Noridian billed the state $78 million, according to the Baltimore Sun. Over five years, Noridian’s contract was valued at $193 million.
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In a recent quarterly filing, Noridian Mutual Insurance Co., which does business as Blue Cross Blue Shield of North Dakota, said an unidentified wholly owned subsidiary faced losses projected at $17.8 million.
Adam Hamm, the North Dakota insurance commissioner, said his office has been closely monitoring the dispute. Any costs Noridian incurs as a result of the Maryland exchange project will not be allowed as costs billed to policyholders, Hamm said.
Noridian Healthcare Solutions, formerly Noridian Administrative Services, is a major processor of Medicare claims.
