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October 30, 2014

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State hires consulting firm to help fix health insurance exchange

The Deloitte Consulting Co. received a $1.5 million state contract Tuesday to rescue the failing health insurance program and said it's poised to start immediately.

"We're going to hit the ground running," said Kevin Kelly, a principal with Deloitte, after the state Board of Examiners approved the five-week contract.

Board Chairman Gov. Brian Sandoval pressed for and got assurances that Xerox could open its books, files and other items to allow Deloitte to assess the failures and put together a future roadmap for fixing the system.

Xerox received a $75 million contract from the board of directors of the Silver State Health Exchange initially to design and run the system. The initial goal was to sign up 118,000 people for insurance by March 31, but only 22,000 have been enrolled and paid their premiums. And some of them still not have received their coverage cards from the insurance companies.

Kelly told the board the cooperation of Xerox is essential to learning and solving the problems.

The exchange board is to meet Thursday to decide on a special enrollment for those who tried to get insurance but were stuck in the system.

The governor said people were upset and disappointed. "We can't go through this again" when the next enrollment process opens in October, he said.

Sandoval noted that Deloitte and Xerox are competitors and that both bid for the design-operation of the system. Xerox was chosen by a narrow margin.

Greg Vitiello of Xerox promised it was "fully prepared to cooperate" with Deloitte.

The state has received an estimated $100 million in federal money to run the system. C.J. Bawden of the health insurance program said the system is under budget. He said the contract with Xerox was based on a projected 118,000 enrollment. He said Xerox is paid on the number of people who sign up.

An estimated 10,000 individuals have picked one of the four insurance companies in the exchange but have not paid a premium. And an estimated 69,000 people have been found eligible to buy insurance coverage but have not selected a plan or paid a premium.

Deloitte has been working on getting people enrolled in Medicaid as part of the federal Affordable Care Act.

Mike Willden, director of the state Department of Health and Human Services, said that 402,000 people have signed up for Medicaid but that there is a backlog of 60,000 applications.

The Legislature allocated money for Willden to hire additional workers in July 1, but he said he may have to move up that date to reduce the backlog.

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