Contract Five Years Overdue seeks another extension

By Grant Bosse on October 17, 2012
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(CONCORD) Five years after missing its original two-year deadline, a state contractor is seeking another extension for a software program to track New Hampshire’s Medicaid program. Health and Human Service Commissioner Nick Toumpas is bringing a request to the Executive Council to extend the current contract with Hewlett-Packard for another five months in order to give Xerox more time to finish the state’s new Medicaid Management Information System.

The Governor and Council originally approved the MMIS contract with Affiliated Computer Services in December 2005. That deal gave the company two years to design, develop, and implement the software system, followed up a three-year operational phase beginning on January 1, 2008. The State of New Hampshire would then have the option to renew the bid for an additional two years. But the project is so behind schedule that by the time it’s operational, the original contract would have expired.

Toumpas is seeking the Council’s approval to extend the current Medicaid information system with EDS, now owned by HP Enterprise Services, until May 31, 2013, at a cost of $2,335,000. New Hampshire taxpayers are not on the hook for delays with the ACS system, but Toumpas says its has been costly to keep the more expensive EDS system up and running for the past five years.

“It’s obviously been a very trying project,” Toumpas tells New Hampshire Watchdog.

The State has paid $16.7 so far to ACS, since acquired by Xerox, to design the new MMIS. The original contract included $26 million for the design phase, and $34 million for the full five-year operational phase. But Toumpas has had to come to the Council several times to ask for more money as the needs of the new system have expanded.

“We’re not paying for the delay,” Toumpas says. “But there has been additional money for additional functioning.”

The need for a new MMIS was driven by demand from the federal Centers for Medicare and Medicaid (CMS), which insisted that each state upgrade it computer systems to track Medicaid spending. The goal of the software is to track payment of Medicaid claims, keep track of the nearly 15,000 providers in the state, conform to federal reporting requirements, and give the state better information on the management of its Medicaid program.

The federal government is paying for 90% of the MMIS project design, and would pay for 75% of the $2.3 million for today’s extension. But Toumpas says CMS would not be likely to match future spending if New Hampshire finally gave up on ADS and started the project from scratch with a new bidder. He says the last chance to reverse course would have been three years ago, but he does not regret his decision to recommend sticking with ADS.

Toumpas says he’s quite upset at the series of costly delays, but that the project keeps getting sent back to the drawing board as the state’s needs change. He says the first step in the new MMIS system has been up and running for nearly a year, as the state began to enroll Medicaid providers into the system in December of 2011. He says over half of the 13,000 to 15,000 health care providers are now in the new system.

Meanwhile, EDS continues running the state’s Medicaid information system, at a cost of $8 million a year. That company wants to shut down its Concord facility in order to shift those resources within the company. But Toumpas doesn’t think EDS will walk away before ACS is operational.

New Hampshire shift to Managed Care under its Medicaid program has forced ACS to modify its program, but could end up making the whole process easier. Managed Care Organizations contracted the state to provide Medicaid services on a per-patient basis would be responsible for tracking much of the data used by MMIS. Toumpas says the ACS system had to be changed to accommodate Managed Care, leading to another delay.

The Executive Council meets this morning at 10am at the State House in Concord to consider the EDS extension request.

Executive Council Agenda

#31A Authorize to amend a sole source contract with HP Enterprise Services LLC, TX, (originally approved by G&C on 4-28-93, item #81), to enable system modifications to NH’s legacy Medicaid Management Information System, by increasing the price by an amount not to exceed $2,355,000 from $164,761,557 to $167,116,557, and by extending the completion date from February 28, 2012 to May 31, 2013. 75% Federal, 25% General Funds.

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3 Comments For This Post So Far

  1. Robert Milk
    10:25 am on October 17th, 2012

    I am very disappointed in this article. As a watchhdog organization you have many facts in error.

    1. paragraph 2, “he Governor and Council originally approved the MMIS contract with Advanced Data Systems in December 2005. should read … contract with Affiliated Computer Systems, inc (ACS)..

    2. paragraph 3 “New Hampshire taxpayers are not on the hook for delays with the ADS system,…” should read … the ACS system,…”

    3. paragraph 5. “The State has paid $16.7 so far to EDS, since acquired by Xerox, to design the new MMIS.” should read The State has paid $16.7 so far to ACS, since acquired by Xerox,

    3. paragraph 8. “But Toumpas says CMS would not be likely to match future spending if New Hampshire finally gave up on ADS and started the project from scratch with a new bidder.” should read … finally gave up on ACS …

    Sincerely,
    Robert Milk

  2. Grant Bosse
    11:10 am on October 17th, 2012

    Robert,

    Thank you for the corrections. I apologize for my error. I had some acronym confusion this morning.

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