IBM Pays Maryland $14.8 Million For Failed Health Benefit Exchange


IBM and Cúram Software will pay Maryland $14.8 million over a failed health benefit exchange. The state filed suit after the exchange launched with a series of problems including frozen pages and an inability to process applications.

Maryland contracted IBM to build its exchange after its acquisition of Cúram Software in 2011. The exchange was to be built using Cúram’s technology. Maryland said in its complaint that the companies made material misrepresentations of what the exchange would be able to do, violating the False Claims Act. Maryland eventually terminated the contract in 2013.

The settlement was awarded as the result of an investigation by the Department of Justice, the U.S. Attorney’s Office for the District of Maryland, the Department of Health and Human Services Office of Inspector General, and the Office of the Attorney General of Maryland. Neither IBM or Maryland admitted liability.

“Companies are expected to be candid about products, skills and abilities during contract negotiations,” said Maureen R. Dixon, Special Agent in Charge, for the Department of Health and Human Services, Office of the Inspector General. “We will continue to work with the U.S. Department of Justice to ensure taxpayer dollars are only spent for honest, high-quality health care products and services.”

Maryland wasn’t the only state to get stuck with a benefits exchange that didn’t work. As CivSource previously reported, Massachusetts cut its ties with CGI Group over a faulty implementation of its ACA health insurance marketplace. Minnesota, which was also an IBM/Cúram client was caught up in a similar set of problems as Maryland. According to Minnesota Public Radio, the software was never tested before it was launched and problems with functionality extended into MinnesotaCare, the state’s low-income healthcare system.