- Associated Press - Tuesday, September 30, 2014

HELENA, Mont. (AP) — Members of a state legislative panel said last week they don’t believe Xerox Corp. will be able to fulfill its $70 million contract to create a new computer program to manage Medicaid payments.

The Legislative Finance Committee unanimously supported a no-confidence resolution, more than two months after state officials resolved a breach-of-contract issue with Xerox.

The project is more than two years behind schedule.

Committee member Sen. Rick Ripley of Wolf Creek proposed the resolution in absentia, saying he hopes the revised contract works but that the company’s actions to date don’t provide him with confidence in that occurring.

The Medicaid Management and Information System is supposed to replace a system more than 30 years old that handles payments to thousands of Medicaid providers. The old system is unable to keep up with increasingly complex payment rules and parameters.

If successfully executed, the new system should last 20 years, state officials said.

Ron Baldwin, the state’s chief information officer, told lawmakers the state has seen progress from Xerox in the two months under the revised contract. He said the contract, with additional penalties for Xerox if the company fails to deliver, allows the state to move forward without spending any more money than originally intended.

“Their costs have also increased. Of course, I don’t care,” Baldwin said. “What I do care about is this company is going to deliver this project.”

Under the contract, Xerox does not get paid until it has achieved specific milestones in the system’s development.

Xerox spokeswoman Jennifer Wasmer said in a statement that Xerox is dedicated to continue working with the state to deliver a new reliable system. “More than 200 Xerox staff are assigned to the project, and we have more than eight concurrent design sessions every day to ensure we are keeping pace with all milestones and deliverables,” Wasmer said.

Baldwin told The Associated Press on Tuesday while Xerox has made progress, he understands the committee’s concern.

“The state is committed to delivering a modern-day Medicaid payment system for Montana,” he said. “We continue to work through the current challenges with the vendor to build the best system possible. We will continue to hold Xerox accountable going forward.”

Last year, Xerox completed Medicaid software projects in Alaska and New Hampshire. Earlier this month, the state of Alaska filed a complaint against Xerox alleging unfair or deceptive practices. They’re seeking damages and an order requiring a plan by Oct. 15 to resolve problems with the system. The system implemented in New Hampshire was six years late.


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