Executive Council OK's more tech money
Over outgoing Councilor Ray Wieczorek's lone dissenting vote, the governor and Executive Council on Wednesday approved yet another extension and an additional $15.8 million to Xerox State Healthcare to develop and operate the state's new Medicaid management information system.
That brings the total to an amount not to exceed $91.7 million. The vote was 4-1.
Another $12 million was previously approved and added to the original $61 million contract to pay for additional state and federal requirements.
The governor and councilors were assured Wednesday by Nicholas Toumpas, commissioner of Health and Human Services, the additional money was for add-ons the state has requested, not because of the ongoing delays.
Those include switching to managed care, hospice benefit and family planning, Toumpas said.
"Is there risk?" Toumpas said of continuing with Xerox. "Yes, considerable risk."
Toumpas has been on the firing line to answer for the delays. He has said all along that there has been no extra cost to the state because of the delays, that the firm has borne those costs.
The state made a decision in 2010 to move forward with the contract despite the continuing delays, he said.
"There's no turning back," Toumpas said, adding there will be a contingency plan.
After the meeting, Toumpas said the contingency plan is being worked on, but he couldn't say what it will include.
It will cost Xerox $5.5 million if the system isn't operational by the new deadline of April 1, 2013, Toumpas said.
Wieczorek, R-Manchester, has been frustrated that the state hasn't cut its ties with the vendor.
"I'm not pleased," Wieczorek said of the additional $15.8 million "for a contract that started at $60 million."
The council approved the original $61 million contract in 2005 to Dallas-based Affiliated Computer Systems, which has since been acquired by Xerox.
The computer system will process all of New Hampshire's $1.4 billion Medicaid claims paid to 10,000 health care providers for services to 140,000 recipients, and track eligibility.
The new completion date has been pushed back from Dec. 31, 2017, to March 31, 2018.
The design phase of the new system is 90 percent funded by the federal government and 10 percent by the state. The operations cost will be a 50-50 split between the state and federal governments.
Kenneth Leary, Hewlett-Packard's account executive for the state's current Medicaid computer system, has told the state it will stop processing claims in March of 2013 to prepare for the transition to Xerox April 1, 2013.
Electronic Data Systems, the firm that provided the service for 20 years, lost out in 2005 with a bid that was $10 million more than ACS over five years. EDS has since been acquired by Hewlett-Packard.
Every time Xerox misses a deadline, the state has extended HP's contract, Leary said. The last extension was for three months.
HP told Toumpas it wouldn't "walk out on the state," but needed to make any future extension a year or longer, Leary said, adding Toumpas said he wasn't going back to the governor and council and was planning on Xerox meeting the April 1 deadline.
Another outgoing councilor, Dan St. Hilaire, said he was satisfied the new contract penalizes Xerox $5.5 million if it doesn't make the deadline.
"I think it was appropriate to grant the extension. It resulted in changes the state wanted to make based on new Medicaid requirements," St. Hilaire said.
He also pointed out that Xerox has a big incentive to finish New Hampshire's project because systems in several other states will be built on New Hampshire's model.
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Nancy West may be reached at firstname.lastname@example.org.