Dive Brief:
- Noridian Healthcare Solutions, a subsidiary of BCBS of North Dakota, has agreed to pay Maryland $45 million for an online health insurance exchange plagued with problems. It will pay $20 million upfront, paying the balance in $5-million installments over five years.
- Maryland's health exchange crashed immediately after launching Oct. 1, 2013. The state paid Noridian $65.4 million in a contract it terminated last year, alleging flaws that burdened the state with $30.5 million in unnecessary Medicaid spending.
- The agreement is subject to regulatory approval. Although the agreed amount represents about 60 of the total% Maryland paid for the creation of the exchange, Maryland governor Larry Hogan said it will help CMS, which provided substantial funding, recover some costs.
Dive Insight:
Tim Huckle, president and CEO of Blue Cross Blue Shield of North Dakota said the deal will not affect rates for the current 517,000 enrollees. "NIMC believes it is in their best interest of all parties to move forward with the settlement and firmly believes that its guarantee of NHS's financial commitment to the state of Maryland is in its members' best interests," Huckle said in a statement.
Noridian's president and CEO, Tom McGraw, said the company remains financially stable. "Through negotiation, NHS was able to work out a payment schedule that allows payment over five years. This arrangement has been structures such that NHS can continue to meet all financial and operational obligations."