Correction: Originally this post referred to the op/ed by Mr. Goldberg as an editorial by the Baltimore Sun. That was in error, and the post has been changed to reflect that.
I’ve written before about North Dakota-based Noridian (the parent company of Blue Cross Blue Shield of North Dakota) doing a less than exemplary job implementing Maryland’s Obamacare exchange. The company, which lobbied hard for North Dakota to create a state-based exchange of their own, has come under heavy fire for their performance including this blistering op/ed in The Baltimore Sun accusing the company of being better at politics than insurance administration:
Governor O’Malley had hoped to use Maryland’s health exchange as a launching pad for his 2016 campaign. He might want to make other plans. Mr. O’Malley’s administration had no direct experience in building exchanges. Like President Obama, the governor ignored firms with the capability, knowledge and experience in managing large IT projects. Instead, the business went to firms adept at the legal and political maneuvers needed to land big government contracts.
That may explain why the O’Malley administration gave a $67 million contract to Noridian Healthcare Solutions. Noridian is not an IT company. It processes claims for medical equipment like wheelchairs and lab results for Medicare and Medicaid. It also administers North Dakota’s BlueCross BlueShield Plan.
Noridian Administrative Solutions rebranded itself as Noridian Healthcare Solutions in 2013. Chief Executive Officer Tom McGraw stated that Obamacare would be a big source of future revenue growth. The name change was a signal, Mr. McGraw said, that “We’re more than a claims administrator and ready to help states, the federal government and businesses meet the new challenges they face in health care information, systems and support. Noridian’s capabilities have evolved from the complexity of health care delivery.”
The fact is, Noridian had to hire contractors to do everything it promised. None of Noridian’s executives have experience actually building and maintaining information systems for consumer or service-oriented enterprises.
If Maryland Health Benefit Exchange executives were concerned about Noridian, they didn’t show it. On the contrary, at a health IT conference last year Maryland was cited as an early innovator state and well down the path toward being prepared to successfully implement a health information exchange. But as late as April 2013, Noridian had yet to think about the systems and hardware needed for the connectivity required for that purpose.
Later in the op/ed the author, Robert Goldberg who is founder and vice president of Center for Medicine in the Public Interest, asks how the red ink created by this botched attempt to launch the exchange will be paid for. Then the he answers his own question. “Exchanges can assess fees on health plans to pay for cost overruns,” the paper writes. “That means higher taxes or higher premiums on top of a failed system.”
North Dakota rate payers may be on the lookout for hikes in premiums necessitated by Noridian’s failed Maryland adventure.