Massachusetts to Pay CGI Additional $35M For Failed Health Exchange Website

Massachusetts has agreed to pay CGI, a Canadian technology developer, $35 million for the failed health insurance website that the state abandoned use of last month, according to a Boston Globe report.

Massachusetts Health Connector, the state-run exchange site, was plagued by technical issues. The site malfunctioned from its launch last October, and as of mid-March, the state was still working on its exchange and had about 84,000 residents on temporary health insurance plans.

Massachusetts will pay CGI a total of $52 million for the exchange site, including $17 million already paid to the company last year, according to the Globe.

State officials have said they plan to replacethe flawed exchange site with new, off-the-shelf enrollment software.

"This is a pragmatic way to wind up a frustrating relationship," said Massachusetts Gov. Deval Patrick (D), in the report. "CGI has been a disappointing partner. This agreement resolves intellectual property issues so that we can move forward in building a website that works."

Massachusetts Attorney General Martha Coakley said her office has begun an investigation into CGI under the state's False Claims Act.

Massachusetts is not the only state that has encountered problems with its health exchange. It was estimated Maryland, Massachusetts, Minnesota, Nevada and Oregon would spend a combined $240 million to switch to the federal marketplace or fix their flawed state-run systems.

Massachusetts is the second state to abandon the exchange site it used for the 2014 enrollment period because of technical issues. In late April, the board overseeing Oregon's health insurance exchange voted to abandon the glitch-ridden Cover Oregon site in favor of relying on HealthCare.gov.

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