Las Vegas Sun

July 24, 2014

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Nevada fires Xerox, will join federal health care exchange

Nevada will abandon its state-run health exchange, sever ties with software contractor Xerox and switch to the federal system for one year to enroll its residents in health care, a state board voted today.

The Silver State Exchange's board of directors proclaimed it had “no confidence” in staying with Xerox, citing the company’s inability to fix 1,500 technical glitches in the current exchange. Xerox had a $75 million contract with the state and has spent $12 million of that money, according to the state.

Xerox executives testified at today's meeting and lobbied the board to keep the company on the project. But they did not sway the decision.

“The current system is intolerable and is not the best we can do,” said Lynn Etkins, the board’s vice chair.

After the meeting, Xerox spokeswoman Jennifer Wasmer called the decision "extremely disappointing." She said the company used its full resources to meet the goals of the exchange.

With the next open enrollment period starting in November, the board has little time and few options to create a functioning health care marketplace. After reviewing a series of options with federal officials last week, the board decided to use the federal exchange for 2015 and create a new state-run infrastructure for 2016.

When the next enrollment period begins, consumers will still use Nevada Health Link as the entry point for enrolling. But instead of using Xerox's software, the website will direct Nevadans into the framework of the federal exchange. During that time, Nevada will open the bidding process to hire a new contractor to create system based off of a state model that is currently working.

The disastrous rollout of Nevada's exchange has been a black eye for Nevada and a rare trouble spot for Gov. Brian Sandoval, the only Republican governor with a state-run system. Sandoval's press secretary Tyler Klimas issued a statement on the decision: "Unfortunately, the board was placed in this position because Xerox has failed to perform its contractual duties. The Silver State Health Insurance Exchange Board is statutorily charged with deciding the future of Nevada Health Link. The board made the best decision it could under these difficult circumstances."

In April, Oregon dumped its $248 million system to join the federal exchange.

Las Vegas Sun reporter Cy Ryan contributed to this report.

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