Monday, April 7, 2014

Epic Fail -- Maryland Health Insurance Exchange

Maryland may have earned an unwanted distinction for its failed Health Insurance Exchange website -- one of the costliest and highest profile failed information technology projects in state government.  The health exchanges were challenging from the beginning, and many states , including Maryland, Hawaii, Minnesota, and Oregon apparently chose teams that were not capable of overcoming the tight deadlines and high performance requirements, prompting a Congressional hearing last week. 

The Washington Post reported that Maryland decided in March 2014 to scrap its work (at a cost of $125 million) and restart with the software used by Connecticut.  Fewer than 50,000 (out of the goal of 150,000) had signed up for coverage on the Maryland site, and most had ended up enrolling through manual processes such as on the phone.

The prime contractor that failed on the Maryland Health Insurance Exchange was Noridian Healthcare Solutions of Fargo, ND, whose contract was valued at $193 million.  They have been replaced with Optum/QSSI of Columbia, MD.

Noridian had hired Fort Lauderdale, FL based EngagePoint for $250,000 per month and EngagePoint in turn hired subcontractors.  EngagePoint moved its headquarters to Maryland following the contract award.

Noridian fired EngagePoint after the failed launch of the site in October 2013, prompting a lawsuit, in part over efforts by Noridian to hire EngagePoint employees. 

Now Maryland politicians are trying to distance themselves from this epic fail. 

Are there lessons from this failure?  EngagePoint accused Noridian of using the traditional waterfall methodology which finishes each step before starting the next.  Could the methodology have been at fault?  Was the team qualified to build the system?  Did the failed exchanges make the wrong hardware or software choices?