The decision comes less than two weeks after Auditor General John Doyle delivered a critical report on the deal with Maximus to manage call centres for PharmaCare and the Medical Services Plan.
Doyle said the contract had provided some benefits, but the government hasn't shown exactly what's being achieved at what cost, and he also raised concerns about the security of the data system.
Despite the report, the government says Maximus has provided solid performance and it's extending the contract for another five years at a cost of $264.3 million.
The government says the extension, which will run until March 31, 2020, is considered the best option for continuing the management of the health insurance system.
However, it says the new deal incorporates some of Doyle's recommendations, pointing out the performance of Maximus will be monitored in a number of areas, including answering calls and processing claims in a timely manner.
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