- Associated Press - Tuesday, January 13, 2015

NASHVILLE, Tenn. (AP) - TennCare says it is ending its contract with computer vendor Northrop Grumman Corp. and will find another company to develop a computer system to determine Medicaid eligibility.

The move comes after months of delays and other problems with the system the company was supposed to develop but that shows little sign of ever working.

TennCare officials said in a statement on Monday that the mutual decision between the agency and the company to cut ties was based on an audit performed by KPMG LLC. The audit found that Northrop consistently missed performance benchmarks and that the system isn’t near completion.

“The state will be moving forward with the process to select a new vendor,” the TennCare statement said.

Media reported officials didn’t give a timetable on when they would make a selection.

TennCare has paid Northrop Grumman $4.6 million so far, but most of that is federal dollars.

KPMG found that turnover within Northrup Grumman’s team of business analysts working on the project created problems as well as their “lack of Medicaid eligibility domain knowledge.”

The audit said the state bears some of the blame too.

“The State has not developed a comprehensive, documented business operating model for the future state of Medicaid Member Services,” KPMG found. “As a result, the State may not be able to effectively align its new business processes” with its Tennessee Eligibility Determination System.

The state must pay another $1.6 million, but much of that also will come from federal funding.

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