Dive Brief:
- A state audit has discovered major issues with Maryland's health insurance website, including officials who failed to follow rules in awarding more than $100 million in contracts and improperly storing Social Security numbers and other customer information.
- According to the Washington Post, officials under the gun to get the $170 million website up and running failed to encrypt information for 500,000 people who used the exchange to shop for health insurance.
- However, the exchange said they took steps to safeguard consumers' information and the audit found no evidence of data breaches. Additional measures taken this summer to shield access to data have addressed the audit's privacy recommendations.
Dive Insight:
Maryland's Health Exchange has been problematic since its October 2013 launch - which crashed within moments and cost millions of dollars and many months to rebuild. An earlier attempt to examine the exchange's spending in April 2014 stalled because more than 25% of the documents turned over by the state contained information that had been redacted.
A March federal audit recommended Maryland pay the government $28.4 million that was misallocated since the state waited too long to formally update enrollment projections and numbers with federal grant providers.
This new audit had several key findings: two contracts worth $5.9 million were approved by the health exchange board but the contracts had already been awarded without competition earlier in 2014. The organization distributed $23.4 million to nonprofits to boost health insurance enrollment but didn't make sure the money was spent properly.
In addition, state officials failed to review payroll records before awarding $8.2 million to vendors that charged hourly, and the state erroneously gave out $1.7 million in federal subsidies because of a coding error in calculating eligibility.
The exchange disagreed with the auditor's assessment that these were examples of violated policies. Officials said the agency is more rigorously documenting and reviewing its spending.