Baltimore, Maryland – IBM and Cúram Software have agreed to pay $14.8 million to settle allegations that the company made material misrepresentations to the State of Maryland during the Maryland Health Benefit Exchange contract award process. The two companies were accused of violating the False Claims Act when attempting to obtain the contract for the development of the state’s Health Insurance Exchange (HIX) website and IT platform.
The settlement agreement explains that IBM completed its acquisition of Cúram on December 19, 2011. On the same day, a proposal was submitted to support the HIX. The proposal was drafted in part by Cúram and included the company as a subcontractor for software and services.
In January of 2012, Cúram participated in a presentation to the State of Maryland with IBM’s knowledge. During the presentation, Cúram illustrated that its software was capable of conducting eligibility determinations for health assistance coverage, addressing changes in life events, and more. Ultimately, the State awarded the contract and Cúram was named as a subcontractor on the project.
After experiencing numerous problems following its launch, Maryland terminated the contract and replaced the software, including Cúram’s. Cúram was accused of misrepresenting the existing functionality of its software to meet the State’s technical requirements. The claims are allegations.
The settlement does not constitute an admission of liability by IBM nor does it mean the United States’ claims were not well founded. Additional details have been made available here.