The Associated Press

Mass., Vermont Take Action Against Health Site Firm

BOSTON — Massachusetts and Vermont are withholding payments and considering legal options against the contractor that set up the states’ problem-plagued health insurance websites.

Massachusetts has paid $11 million of its $69 million contract with CGI Group, a Montreal-based information technology company.

The company won’t get another penny until a functioning website has been delivered, Jason Lefferts, spokesman for the state’s online insurance marketplace, told The Boston Globe.

“CGI has consistently underperformed, which is frustrating and a serious concern,” Lefferts said. “We are holding the vendor accountable for its underperformance and will continue to apply nonstop pressure to work to fix defects and improve performance.”

Staff at the Commonwealth Health Connector is expected to present a plan to its board of directors on Jan. 9 aimed at “rectifying issues, including ensuring that accountability for the website problems is addressed,” Lefferts said.

Massachusetts has reverted to using an alternative software system and paper notifications for residents seeking new insurance.

As of early December, Vermont had paid $18.6 million of its $82.6 million contract with CGI.

State officials have alerted CGI that Vermont is withholding payments of $5.1 million as compensation for the company’s failure to meet key deadlines.

The state also is disputing more than $1 million in charges billed by CGI because of incomplete work that left its insurance website so far behind schedule that Vermont residents could not buy coverage online, as promised under President Barack Obama’s health care law, until early December, two months after it opened.

CGI spokeswoman Linda Odorisio said the company is working to fix state websites. It also is reviewing Vermont’s letters signaling intent to recover damages, she said.

“CGI fully intends to honor the terms of its contract,” Odorisio said in a statement.

The company has contracts with five other states and the federal government.

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