Two states may seek refund for heath exchange website woes

Dec. 27, 2013 at 11:36 AM
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BOSTON, Dec. 27 (UPI) -- Two U.S. states have threatened to withhold payments to the same company that designed the problem-plagued federal online health insurance exchange portal.

Massachusetts health officials said they'll meet in January to decide whether they will suspend payments to CGI Federal and may also seek a refund from the firm, the New York Times reported Friday.

Vermont also is trying to get a refund of hundreds of thousands of dollars and has refused to pay $5.1 million of its contract with the company.

The Boston Globe initially reported the two states' problems with CGI, which played a central role in building the federal exchange site,, that was beset with problems when it launched Oct. 1.

Under the Affordable Care Act, President Obama's signature healthcare policy, eligible Americans who don't have health insurance through work or another source can enroll through a healthcare exchange that provides health plan options and information on possible subsidies. Open enrollment runs through March and those not signed up by then could face penalties.

Fourteen states, including Massachusetts and Vermont, created their own online marketplaces, and the rest depend on the federally operated exchange.

"Right now, our current focus is ensuring there are no gaps or delays in coverage for our members," said Jason Lefferts, a spokesman for Massachusetts Health Connector, the state's insurance exchange. "We will be coming back to the board in January to discuss further accountability for the IT vendor, and also talk about the path forward."

Massachusetts has paid CGI $11 million of its $69 million contract.

Lorne Gorber, senior vice president for global communications and investor relations at the CGI Group, told the Times the company has the same goal as its clients, "to get everything right and not be wasting a lot of time and effort in the clauses of the contracts when we're doing that."

Recurring troubles prompted Vermont to withhold a $5.1 million payment and threaten to hold back more if the problems aren't fixed, the Times said. So far, the state has paid $19 million of its $83 million contract with CGI.

Massachusetts had its own online health insurance system before the Affordable Care Act but because the federal law required many extra features, the state decided build a new website that now is faulty.

While the spotlight focused on's botched rollout, several of the state exchanges also stumbled. In Hawaii, poor performance of the CGI-created site led to the head of the state's exchange to step down this month. However, other exchanges -- including those on which CGI worked as a subcontractor -- have performed relatively well.

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