Reno, NV--KRNV--The board of the Silver State Insurance Exchange voted this morning to dump the vendor Xerox after months of controversy and reported problems. Xerox was awarded a $75 million dollar contract to build the Nevada Health Link website and provide support for the health exchange program.
CJ Bawden, spokesperson for Nevada Health Link said, "A lot of the board members expressed the thought they did not have faith that Xerox could remediate the system on their own and move forward with a working system for the next open enrollment in November."
The plan is to partner with the federal government through 2015. This would allow Nevada's exchange to keep autonomy and its member-based funding. Bawden said the change could cost as much as $20-million but he said the bulk of those costs would be reimbursed by the federal government. He said Nevada could end up paying up to $2-million.
Bawden explained, "Those costs are to bring our current Medicaid system up to accepting applications from the federal IT infrastructure and staffing, a call center at the Medicaid office to take applications over the phone."
Bawden said Xerox has been paid to date $12.3 million. He said, "They have only been paid for deliverables. It's a deliverables based contract that have been accepted by the state that are 100 percent working and have been validated to be working by independent validation and verification contractors." Bawden said Xerox could receive additional money for operation and maintence costs through the end of this year. He said, "The call center-website will still be here for those currently enrolled individuals through 2014, so there could be on-going 'm and o' costs for that."
The board left open the option to transition Nevada's exchange to another system in 2016. The state could opt to import an existing, working exchange from another state. Bowden said, "The board wanted to leave the possibility open because the federal government could come to all of the states at some time and say we'd like the state's to take on the enrollment process on their own."
The board also asked Xerox to hold the state harmless in a class action lawsuit in which Xerox is named. The suit stems from Exchange customers who claimed they made insurance payments but discovered they did not have coverage. Some say they racked up large medical bills in the process. The board would like to make sure taxpayers are not on the hook should Xerox receive an adverse ruling in this lawsuit.