IBM to Pay Nearly $15 Million for Issues Tied to Maryland's Health Exchange

By Patrick Thomas

International Business Machines Corp. (IBM) has agreed to pay $14.8 million to settle allegations regarding misrepresentations made about software capabilities and other technical issues that hurt the Maryland online health exchange.

Federal prosecutors said Friday that IBM and its unit, Curam Software Ltd., provided software and services as a subcontractor on a project to develop the Maryland Health Benefit Exchange, a platform built to help individuals and small businesses shop for medical insurance.

In 2014, the state of Maryland cited problems with software from Curam, an Irish company that IBM acquired in 2011, used to determine consumers' eligibility for Medicaid and premium tax credits for private insurance. Some consumers' applications for coverage were lost or suspended in Curam's system, said Joshua Sharfstein, Maryland's secretary of health and mental hygiene back in 2014.

The settlement resolves misrepresentations allegedly made by during the bidding process regarding the development status of Curam's software, and its ability to meet the state's technical requirements, such as addressing life events and calculating tax credits, the Justice Department said Friday. Prosecutors said repeated problems followed the launch of the exchange website in October 2013.

An IBM spokesman said the company denies the government's claims of wrongdoing. "We have agreed to the settlement to avoid further delay and the expense of protracted litigation in this six-year dispute," he said.

The Justice Department said the settlement was reached without a determination of liability.

The primary contractor hired to build the health exchange website, Fargo, N.D.-based Noridian Healthcare Solutions LLC, settled with the state for about $45 million for its role in the botched rollout.

Write to Patrick Thomas at patrick.thomas@wsj.com

(END) Dow Jones Newswires

June 14, 2019 15:05 ET (19:05 GMT)

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