HHS to seek new extension for Medicaid computer system

Department of Health and Human Services Commissioner Nicholas Toumpas wants to give Xerox Corp. more time to implement the state's new Medicaid Management Information System, that was originally supposed to be running at the end of 2007.But, Toumpas, promised, this will be the last time a delay will be sought. "This is it," he told NHBR. "This is the end. I won't ask for another extension."

Toumpas plans to ask the Executive Council today to extend the state's contract with HP Enterprise Services (formerly Electronic Data Systems) to run the current system through May 2013 for $2.4 million.

Xerox in 2009 acquired Affiliated Computer Systems, the firm that won the bid to take over the Medicaid Management Information System contract in 2005. ACS maintained it could come up with a better, cheaper system in two years. The Executive Council approved the contract in a close vote after a knockdown battle, during in which EDS charged that ACS was using New Hampshire as a guinea pig to develop an untested system so it could sell it to other states — a charge ACS has denied.

Since then, HHS has regularly asked for extensions on both contracts, as ACS, and then Xerox, missed deadline after deadline. (Xerox has always referred questions about these delays to HHS). Toumpas now says that Xerox will switch over to the new system by the end of March 2013. The extra two months on the HP contract, would allow HP to "wind down" after running the system for two decades.

Toumpas noted that the "make whole" provisions in the contracts require that Xerox pay for HP's contract increases. On the other hand, Toumpas said, the state foots the bill every time Xerox has to add new functionality because of changing requirements. The last such cost was meeting a new federal rule relating to Medicaid payments to hospitals. That cost was passed in an Executive Council vote of 3-2."It's personally very disturbing that this foolishness is going on for so long," said Executive Councilor Raymond J. Wieczorek, who has voted against previous extensions. "Why is the department so married to it? I'm fed up with it. It's ridiculous at this point. How long is thing going to be going on?"

Toumpas admitted that the new system has been "incredibly delayed," but he said to discontinue the old Medicaid system before getting a new one would result in massive problems.

If the council approves the HP extension, Toumpas said HHS would seek approval to increase Xerox' contract so it can handle the state's switch to managed care for Medicaid to replace the fee-for-service model it now uses. Toumpas said that such a request be coming forth soon, but would not give even a ballpark on how much that will cost.