Vermont and Massachusetts officials have announced they will withhold payments to CGI Group for constructing less than satisfactory health insurance exchange websites, according to a report from The Boston Globe.
The IT company entered into contracts with both states to build the sites for their state-based insurance marketplaces established under the Patient Protection and Affordable Care Act.
The Massachusetts exchange, the Commonwealth Health Connector, has experienced technical problems and had to revert to using an alternative software system and paper notifications for people seeking insurance, according to the report. Commonwealth Health Connector spokesman Jason Lefferts told the Globe the state has paid $11 million of its $69 million contract with CGI but refuses to pay the rest until the contractor produces a functioning website.
Meanwhile, Vermont officials are withholding $5.1 million in payment to CGI because of the company's failure to meet deadlines. The state is also disputing more than $1 million in charges billed by the IT company, according to the report. Vermont residents weren't able to sign up for health plans through the state's site until early December, two months after open enrollment began.
CGI was tasked with building five other state-based marketplaces in California, Hawaii, Colorado, Kentucky and New Mexico, according to the report. Hawaii's site launched two weeks late. However, the sites for Kentucky, Colorado and California have had relatively smooth rollouts. CGI spokeswoman Linda Odorisio told the Globe the company is working to repair issues with the state sites.
CGI was also tasked with building the federal exchange site, HealthCare.gov, which has experienced numerous technical issues since its launch. Earlier this year, CGI officials testified before the House Energy and Commerce Committee about the federal exchange site's glitch-ridden rollout. CGI and other contractors told lawmakers the site wasn't tested enough before its launch.
Earlier this month, a Senate Health, Education, Labor, and Pensions Committee investigation cited CGI as one of 49 federal contractors accountable for large-scale labor law violations such as not paying employees wages they rightfully earned and failing to maintain safe workplace conditions. CGI was assessed by the Department of Labor for $1.7 million in wage and safety penalties from 2007 to 2012, according to the investigation.
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