A contract to build and operate a new claims processing system for the state Medicaid program, at a cost of $203 million over seven years, cleared a legislative panel Monday.
The upgrades under the contract with HP Enterprise Services LLC are required by the federal government, which is paying for 90 percent of the cost, state Medicaid Director Dawn Stehle told members of the Legislative Council's Review subcommittee Monday.
The improvements will help Medicaid officials identify waste and fraud, generate reports more quickly and improve communication with health care providers, Stehle said.
"Today, many of the things we do take months," Stehle said. "In the new system, we'll be able to do that in a matter of weeks, in some cases days."
The claims processing system is one of three components of the Medicaid program's technological framework that are scheduled to be revamped over the next several years as part of an overhaul of the program's technology.
Last year, legislators signed off on a $60 million contract with Minnesota-based Optum Government Solutions, a division of Minneapolis-based UnitedHealth Group, to provide a system for storing and analyzing Medicaid data.
Magellan Medicaid Administration, a division of Scottsdale, Ariz.-based Magellan Health, was awarded a contract to administer the program's pharmacy benefits, Stehle said.
HP Enterprise Services, a division of Palo Alto, Calif.-based Hewlett Packard Co., operates the current claims processing system, which Stehle said is nearly 30 years old, and previously administered the data storage and pharmacy benefits systems. The contract to operate the current claims processing system this year totals $77.6 million, Human Services Department spokesman Amy Webb said.
The department issued a notice in May of its anticipation to award the contract to HP for the new claims processing system, Stehle said. The system is expected to begin operating in late 2017, she said.
Last year, Sen. Jason Rapert, R-Bigelow, asked state procurement officials to revisit their decision to disqualify Client Network Services Inc. of Gaithersburg, Md., from bidding on the claims processing contract.
The company's chief executive complained that it had been unfairly disqualified based on a negative reference from officials in Louisiana, where the company's contract to develop a Medicaid Management Information System had been terminated after officials there received a federal court subpoena for contract-related documents.
Client Network Services protested its disqualification to the Department of Finance and Administration's Office of State Procurement, but the protest was denied.
Other bidders for the contract included Norwalk, Conn.-based Xerox Corp.; New York City-based Accenture; and Montreal-based CGI Group Inc.
Rapert said Monday that the Legislative Council's Hospital and Medicaid Study Subcommittee had reviewed the contract award, including concerns from losing bidders, and that there were "no objections to moving forward."
"It was more about process, to make sure that DF and A and procurement dots their I's and crosses their T's as always," Rapert said.
With no legislators objecting, Review Subcommittee Chairman Sen. David Sanders, R-Little Rock, deemed the contract reviewed. It will go the the full Legislative Council for review Friday.
Metro on 11/18/2014