Deloitte Consulting has agreed to general contract terms to help MNsure begin fixing underlying issues with its massive computer system, people with knowledge of the bidding process confirmed Thursday.
The agreement is pending, based on federal approval and a more detailed contract that would solidify the scope of the work.
Deloitte has built some of the most successful state-based insurance exchanges in Connecticut, Kentucky, Rhode Island and Washington. It recently signed a contract worth a reported $40 million to $50 million with Maryland, whose troubled insurance exchange was built using the same suite of original vendors as Minnesota.
The New York-based consulting firm also bid on the original contract with MNsure but was unable to come to terms with the state because it wanted $20 million more than Minnesota was willing to pay.
MNsure has set aside about $10 million this year to address broader technical issues with the online insurance exchange, but not all of that has necessarily been set aside for the new lead vendor. Seven companies submitted bids on the contract.
In a meeting with lawmakers on Wednesday, MNsure officials announced that they had agreed in principle to terms with an unnamed company to get the agency's glitch-filled website functional. MNsure Interim CEO Scott Leitz said he expects the new company to start work this month.
Time is of the essence, as the next round of open enrollment begins on Nov. 15.
MNsure officials were able to improve the experience for consumers in recent months, and most people were able to enroll using the website. But many of the "back end" operations, such as the important handoff between MNsure and insurance carriers, is still not automated, forcing insurers to resort to time-consuming manual processes to get people enrolled in their health plans.
Another area tagged for improvement involves making the system simpler and more streamlined for insurance brokers, small-business owners and community-based navigators.
More than 181,000 Minnesotans have enrolled in a health plan using MNsure, including about 48,000 people in private plans. MNsure officials have said that about 90 percent of the enrollees have paid their first month's premium.
A spokesman at Deloitte said the firm doesn't speak publicly about its clients or the pursuit of clients. A MNsure spokesperson also declined to comment.
Minnesota received federal grants worth nearly $155 million to hire outside contractors, hire staff and operate the system in the first year. By federal law, MNsure must be self-supporting in 2015.
The original prime vendor, Reston, Va.,-based Maximus, has not had a lead project management role since January. Maximus hired three outside contractors to create MNsure's complex IT structure, which must connect to a federal "hub" of databases to verify such things as citizenship and income, and also tie into various state-based computer systems that manage public health programs for low-income Minnesotans.
In discussing MNsure's operating performance with a legislative oversight committee, Leitz said the process of hiring a lead vendor was taking longer than expected. Originally, the agency had expected to finalize a deal in March.
Leitz said MNsure was making sure it had a solid contract with "clear lines of authority" and "much tighter deliverables" than the original vendor contracts.
Over the past year, state records show, MNsure has struggled with several vendors who failed to meet project deadlines and who sometimes delivered work that did not meet state expectations.
"We wanted to make sure we weren't repeating any mistakes that were made in the past," Leitz said.