Xerox, Nevada health exchange target of class-action filing

By Sandra Chereb, Associated Press

Wednesday, April 2, 2014 | 1:27 p.m.

CARSON CITY, Nev. — A class-action lawsuit filed against Xerox and Nevada's health exchange alleges thousands of Nevadans may have paid for policies but remain uninsured because of ongoing problems with the online system.

"The exchange and Xerox have utterly failed to create a system that works as advertised, and as a result, thousands of Nevadans remain uninsured despite payment of insurance premiums," the lawsuit filed late Tuesday in state court in Las Vegas alleged.

A lead plaintiff in the lawsuit against Xerox and Nevada Health Link is Larry Basich, a Las Vegas retiree who bought a policy in October and paid premiums to the exchange that were never forwarded to his chosen carrier.

Basich's coverage was to take effect Jan. 1. On New Year's Eve, he suffered a heart attack and days later had triple-bypass surgery. He was in and out of the hospital for much of January and racked up more than $400,000 in medical bills.

The lawsuit alleges Xerox and the exchange "failed to submit Basich's application and monthly premium to Basich's selected insurance provider," Health Plan of Nevada. Instead, his payments were sent to another insurer, who had no paperwork of his application — and therefore no coverage.

After weeks of wrangling, Health Plan of Nevada executives last week said they would cover Basich's claims and costs for his care, but they warned the carrier would reconsider its participation in the exchange if improvements weren't made. They also said they may pursue legal action.

Another plaintiff is Lea Swartley, who signed up in November but was put into Medicaid even though she told them she wouldn't qualify for the government-paid insurance program for the poor. When Medicaid denied her eligibility, the lawsuit claims exchange officials told her in February they would back-date her private insurance coverage to Jan. 1 and she paid them two months of premiums.

The next day, her son fell off his bike, cracked head and broke his arm and Swartley was billed more than $20,000, her legal team at the firm of Callister, Immerman & Associates said Wednesday. Matthew Callister, the head of the firm, is a former Democratic state lawmaker.

The lawsuit argues thousands of Nevadans may be in similar circumstances.

CJ Bawden, spokesman for Nevada Health Link, said Wednesday the state would not comment on pending litigation.

Xerox was awarded a $75 million contract to build and operate Nevada's exchange. But the system has been marred from the get-go by recurring computer errors, bungled billings and poor response to consumer complaints. The company is only being paid as it meets performance benchmarks, and it has received about $12 million of its contracted amount.

Last month, a state board chaired by Republican Gov. Brian Sandoval approved a $1.5 million contract to hire Deloitte Consulting, a Xerox competitor, to analyze the system and recommend ways to fix it.