Las Vegas Sun

October 26, 2014

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Officials look to blunt exposure in lawsuit over Nevada health exchange

CARSON CITY — A state board overseeing Nevada's bungled health insurance exchange will discuss options to minimize the state's exposure in a class-action lawsuit, including invoking a contract provision that could put the legal onus on Xerox.

The board next Tuesday is scheduled to discuss the lawsuit filed in Clark County on behalf of hundreds of consumers who claim they paid for health insurance but didn't receive coverage and were left with big medical bills.

Discussion comes as the Las Vegas lawyer who filed the lawsuit said Wednesday he'll seek a court order requiring the state or Xerox to provide immediate coverage for several people struggling with serious illness.

"These patients are suffering life-and-death consequences now," attorney Matthew Callister said. Callister, a former Las Vegas councilman and Democratic lawmaker who served in both the state Assembly and Senate, said about 200 people have joined the lawsuit so far.

Xerox was awarded a $75 million contract to build and operate Nevada's online exchange, Nevada Health Link, which has been plagued by billing and computer errors since it went live Oct. 1. Xerox is paid as it meets performance benchmarks and to date has received about $12 million, most of it related to a Henderson call center.

A provision in the contract states that to the fullest extent permitted by law, Xerox "shall indemnify, hold harmless and defend" the state from liability.

"The board is going to request that Xerox provide defense and indemnify the state of any consequences stemming from the class action lawsuit filed in Clark County," exchange spokesman CJ Bawden said Wednesday.

Xerox, when asked for comment, issued a statement staying it will "await the appropriate legal venue to respond to any of the matters raised by Mr. Callister."

"We will let the facts of these matters come out at the appropriate time and place. In the meantime, we continue focusing our energies and resources on getting all aspects of the Nevada Health Link system right and helping as many Nevadans as possible get health insurance," the statement said.

Because of myriad website problems, the state authorized a special enrollment period for anyone who attempted but failed to successfully complete their application by the March 31 deadline.

That grace period ends May 30. As of May 10, the exchange said 47,245 Nevadans have selected plans and about 35,034 have paid premiums. Those enrollment numbers are far fewer than the 118,000 initially projected.

The board when it meets Tuesday could also decide whether to keep Xerox as the operator and fix the system in time for the next open enrollment period this fall; go with a successful system used in another state; solicit a new bid; or join the federal health exchange. But that last option would require action by the state Legislature, which doesn't convene until February — after the next enrollment period closes.

Steve Fisher, interim director of the exchange, and others were meeting with federal officials in Washington, D.C., this week to discuss Nevada's alternatives.

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