North Carolina, ACS settle

By Patty Enrado
12:00 AM

RALEIGH, NC – North Carolina has settled its dispute with Affiliated Computer Services over the Medicaid billing system contract it severed last July. The state will pay ACS $6.2 million for work the company has completed and $4.3 million for ACS to install additional Medicaid billing software.

A spokesperson for the North Carolina Department of Health and Human Services said EDS, which operated the legacy system, would maintain the new system.

“There has been no impact on Medicaid providers,” she said. “The system continues to give good service and timely payment.”

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ACS will continue the contractual business initiative side of the Medicaid Management Information System project. According to the settlement ACS will provide four new services – dialysis auditing, high-resolution radiology, preauthorization, pharmacy desk audit and a real-time point-of-sale application.

DHHS Secretary Carmen Hooker Odom said in a March press release that the new software is expected to “generate tens of millions of dollars in savings.”

New requirements for a request for proposal for the re-bid process will include a different approach of cost modeling to the vendor, as well as require vendor walkthrough and on-site visit and review of a successful systems implementation.

Tom Burlin, ACS’s COO for government, said the project was hampered in the beginning by the previous vendor’s legal protests, which ate up state and ACS resources.

The project’s failure was due in large part to the state’s inability to review deliverables in a timely fashion and its staff’s limited systems knowledge, he said.

ACS said the status quo of the state’s management style would result in cost overruns of $42 million. Burlin said the state CIO agreed a change in management style was needed if the project were to be successful.

ACS, which has completed 31 successful Medicaid system implementations to date and has several ongoing contracts throughout state agencies, is pleased with the settlement, Burlin said.

 “We were more desirous of completing the project successfully in a long-term relationship,” he added.

The Centers for Medicaid and Medicare Services, which worked closely with the North Carolina DHHS on the project, had no comment on the settlement.

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