Exec council OKs another extension for unfinished HHS computer system

ACS State Health Care’s five-year delay in putting in place a new Medicaid contract has earned it another $9 million in work.The New Hampshire Executive Council on Wednesday voted 3-2 to extend implementation of the contract for another 15 months with ACS. Because of the repeated delays, the state will seek an upgrade to the system so it will be able to handle new electronic transactions mandated by the Health Insurance Portability and Accountability act, known as 5010 compliance. This will increase the cost of the contract from $67 million to $76 million.”This was a new requirement that was not in the original contract, and we could either do it now, or we would have to it later,” said Health and Human Services Commissioner Nick Toumpas.If the change isn’t made, the state won’t be able to process claims that come in under the new format, and it would face penalties from the federal government starting April 1, he said.”This is a program that never ends,” said a frustrated Executive Councilor Raymond J. Wieczorek, who along with David Wheeler voted against the extension. “Something is radically wrong. We should not be paying another nickel to this company. There must be a way to get out of it. I want to get out of it.”ACS won the bid over the state’s existing deal with Electronic Data System (now owned by HP) more than seven years ago.The new system was supposed to have gone live at the end of 2007, but the terms of the contract were eventually amended three times to push the deadline to Dec. 31, 2012.Meanwhile, EDS still handles the “legacy” system, and has had to upgrade it as the federal government upgrades its systems.In October, the councilors approved $1.8 million for the EDS system to become 5010 compliant, but that was a “Band Aid,” said Toumpas.ACS — as part of its hold-harmless clause — agreed to reimburse the state for those costs so the state would not be paying for the same upgrade twice. But the hold-harmless provisions still require the state to pay more for upgrades not anticipated in the original contract. In this case, that adds up to about $9 million more for ACS.The state has argued that the system is amazingly complex, processing some $900 million in claims from more than 5,000 providers. It’s more important to get it right than to get it done on time, Toumpas has repeatedly argued.But Wieczorek voiced concern that ACS will again fail to meet the latest deadline. He cited setbacks the company has encountered in other states, including Montana and North Dakota.”What have they finished?” Wieczorek asked.Toumpas answered that he was only prepared to address one contract — the one in New Hampshire.As for ACS, it referred all questions to Toumpas. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW