North Dakota's Largest Health Insurer Subpoenaed In Obamacare Exchange Investigation

When Fargo-based Noridian (which provides health insurance to most North Dakotans as Blue Cross Blue Shield of North Dakota) got involved in Maryland’s Obamacare exchange it ended up costing the company nearly $73 million. It also cost former CEO Paul von Ebers his job.

Now it looks like the company is part of a federal investigation into the use of federal dollars into the exchange. According to the Washington Post, federal auditors have sent subpoenas to Noridian, and one critic of that state’s exchange says the investigation is targeting fraud:

Noridian Healthcare Solutions, the company fired by Maryland officials after the disastrous launch of the state’s health insurance exchange, received a request from federal auditors last month to turn over documents related to the troubled project, chief executive Tom McGraw said Tuesday.

McGraw said in a statement that Noridian was “cooperating fully” with the July 30 request by the inspector general’s office for the Department of Health and Human Services, which has been auditing the use of federal funds in creating the Maryland Health Benefit Exchange.

McGraw’s statement came after Rep. Andy Harris (R-Md.), a fierce critic of the exchange and the federal health-care law that led to it, said that federal auditors had issued subpoenas as part of their review.

“The Office of Inspector General has moved this from an audit into a full-blown investigation,” he said in a statement. “Now we know that fraud may have occurred.”

It’s amazing how bad the mess is in Maryland. According to this CBS report, the cost of fixing the exchange could cost taxpayers upwards of $260 million.

That’s a number which is hard to fathom. How, exactly, can a website intended to simply let people shop for health insurance online cost more than a quarter of a billion dollars?

It’s hard to say what, exactly, this means for Noridian as the Balitmore Sun points out:

They noted that a subpoena does not mean a person or company is being targeted by investigators. Several experts said inspectors general typically have unfettered access to documents created by government employees or current contractors, but a subpoena may be necessary to obtain information from former contractors — Noridian, for example.

Investigators could be looking into a broad range of issues, including whether companies falsely reported their progress or misrepresented the qualifications of their programmers, experts said. The requests for information could also have little to do with the contractors at all.

Still, bad news for a North Dakota-based company, and if this continues to drag out it’s hard to see how it won’t impact health insurance premiums here in North Dakota. Insurance Commissioner Adam Hamm has insisted that Noridian can’t use the losses in Maryland as justification for premium hikes here in North Dakota, but there are lots of ways to skin a cat.