The prime contractor hired to build Maryland’s health exchange website must repay the state $45 million to avoid legal action for the website's flaws.
Noridian Healthcare Solutions agreed Tuesday to pay $20 million upfront and an additional $25 million in yearly installments of $5 million over five years to recover 61 percent of the total paid to the company for the failed website.
The website crashed after its opening on Oct. 1, 2013, according to The Associated Press.
In February 2014, Maryland's health exchange board voted to end their relationship with the company. The state later rebuilt its website with other technology, according to The Associated Press
“This company never delivered on what it promised, and, as a result, tens of millions of taxpayer dollars were wasted, and thousands of Marylanders suffered delays and frustration,” Attorney General General Brian E. Frosh said.
The agreement will help recover funds for both Maryland and the federal Centers for Medicare and Medicaid Services.
Frosh believes that the settlement represents a fair deal for taxpayers, considering Noridian Healthcare Solutions does not have sufficient funds to repay the total cost.
“It is doubtful that Maryland could have collected this amount from Noridian Healthcare even if it obtained an equal or higher judgment after years of litigation,” Frosh said.
Noridian Healthcare Solutions’ parent company, Noridian Mutual Insurance Company, agreed to guarantee at least $40 million of the settlement payment.
The settlement releases Maryland from all contractual obligations with the company.
Claims against other companies involved in developing the flawed website will continue to be investigated.