State abandons search for new health exchange company

There’ll be no more private vendors for Nevada Health Link.

The board of the Silver State Health Insurance Exchange voted Thursday to end its search for a company to replace Xerox, which lost its contract in May following the health link’s glitch-ridden rollout.

Instead, the board plans to stick permanently with borrowing enrollment and eligibility software from the federal healthcare.gov system.

“We do have very limited resources with the number of people working on this. I would say the goal should be a successful enrollment for 2015, and that we stop anything with the alternative survey (of vendors) so our limited staff can focus on that successful enrollment,” said board Chair Barbara Smith Campbell. “I think that’s what our Nevada consumers want too, most importantly.”

It’s a change in direction for the board, which had planned to go with healthcare.gov only while members looked for a new vendor and system for November 2015’s open enrollment.

Board members said Thursday they now have more information about how Nevada Health Link will run under healthcare.gov, as well as fresh concerns about how complicated vendor selection will be.

An exchange report included a compressed timeline that would have required recommendation of a vendor by Wednesday, and state approval by Oct. 24. A contract was to be in place by Nov. 3.

But as of Thursday only four of nine contractors contacted had responded to the exchange’s survey. They included Deloitte Consulting, the group that has been advising the exchange on fixes to its system, Getinsured and Optum. CGI, the contractor involved in healthcare.gov’s botched launch, also responded. CGI lost its federal contract in January.

KPMG, one of the original bidders for Nevada Health Link, did not respond. Neither did Accenture, InfoSys, EngagePoint or CSC.

Costs were also a concern.

Shawna DeRousse, chief operating officer of the exchange, said Nevada Health Link enrollments had dwindled to 34,000, down from 38,000 earlier this summer, and sign-ups may drop more as customers face re-enrollment in November. If member counts drop, the state may not be able to support a third switch. Moving onto the federal website will cost an additional $25 million for the state Division of Health and Human Services, which runs Nevada Medicaid. The state’s General Fund must match $3 million of that.

Said the exchange report: “If the next open enrollment is not successful, there is no guarantee that implementing a third system within three years would produce a successful result. Additionally, if the current federal infrastructure fails, it fails nationally, and federal resources will be utilized to fix the system. No additional state funding would be required to remain on the system, given current legislative status.”

Exchange Executive Director Bruce Gilbert told the board that Nevada will remain a state-run marketplace that merely uses healthcare.gov’s software. That means Nevadans will remain eligible for federal premium tax credits, regardless of any pending court rulings on who qualifies.

Gilbert also said he did not know if the Centers for Medicare and Medicaid Services, which runs healthcare.gov, would require additional fees from Nevada if the state continues to use its software.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com. Follow @J_Robison1 on Twitter.

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