Talks break down on mega-contract for Medicaid

State officials have halted negotiations on a multimillion-dollar contract for a new electronic eligibility system for Medicaid and other health programs.

The state canceled its request for proposal (RFP) last week after months of negotiating with the highest-scored vendor, which industry officials identified as Deloitte.

Now seemingly back at Square One, the Department of Community Health says it will do much of the work to set up a new eligibility process on its own.

“As a result of the negotiation’s length, and with the additional clarity from the federal government, DCH has concluded that the department can accomplish a large portion of the work in-house, achieving compliance and saving the taxpayers’ money,’’ the agency said in a statement to Georgia Health News.

“We believe that Georgia is best served by this approach. In addition, we will be building a base of knowledge internally at the state which will serve us well into the future,” the statement added.

Deloitte officials in Atlanta had not responded to queries by GHN as of late Monday afternoon.

The new electronic system will have huge importance. It will cover Medicaid and PeachCare, as well as eligibility for welfare, food stamps, and the Women, Infants and Children (WIC) program, among other programs. The departments of Community Health, Human Services and Public Health joined in the vendor search.

The state did not reveal on Monday the amount of money that the proposed contract would have paid Deloitte.

The state’s fiscal 2012 budget included a $100 million bond to build a new eligibility system, with 90 percent of it paid for by federal funds.

After Congress passed the Affordable Care Act in 2010, the U.S. Department of Health and Human Services proposed making federal funds available to the states to streamline and upgrade their Medicaid eligibility systems in preparation for the implementation of the Affordable Care Act.

Such an eligibility system must connect with that of the health insurance exchanges that will debut next year as part of the ACA.

“The resources and guidance announced today are an important next step in developing seamless systems of coverage and ensuring effective and efficient implementation of health insurance exchanges and a modernized Medicaid program,” Cindy Mann of the Centers for Medicare and
Medicaid Services said in a November 2010 statement.

Community Health, in email responses to Georgia Health News, said Monday that the state does not expect to miss any deadlines in implementing an updated eligibility system.

The agency said details on the amount of the contract are confidential.

Community Health also said the anticipated amount of savings for the state “will depend on the products we select and the administrative services attached to them.’’

The health insurance exchanges will offer coverage to individuals and small businesses in each state next year. States have the option of running their own exchange or letting the federal government run it, and Gov. Nathan Deal has said the feds will do it in Georgia.

Deal has also rejected an expansion of the Medicaid program, an option under the ACA.

Deloitte last year won a contract to install a new Medicaid eligibility determination system for Alabama.