EDS wins $407 million Medi-Cal award

EDS Corp. was awarded a four-year, $407 million contract to manage the California Medicaid program, Medi-Cal, its third consecutive stint as the manager of the largest Medicaid program in the country.

Over the past few years, the company has actively partnered with the state Department of Health Services to develop a slew of innovations for Medi-Cal, in particular Web-based applications enabling providers to verify the eligibility of claimants, check claim status, process pharmacy claims and provide information programs on family planning and early detection of breast cancer.

With California experiencing a severe budget crunch, however, there will be little money available for future innovating. The only new element will be a customer relation management addition to the Medi-Cal call center to improve the ability to respond to calls and better handle such things as billing, said Dick Callahan, the director of government solutions for EDS' western region.

The rest of the time will be spent trying to squeeze even more efficiencies out of the program, which has a budget of more than $20 billion a year, he said.

"We'll certainly be getting more onto the program management side of things," said Callahan, "and pursuing such things as case management, fraud detection and so on. It's not a matter anymore just of claims processing, but what happens after the claims are made."

A particular challenge Callahan says EDS is facing is the ongoing consolidation of state health-related programs that affect Medi-Cal. About a dozen previously separate programs have already been combined in some fashion, and the pace of consolidation is expected to increase even more in the future.

That will keep the pressure on to reduce Medi-Cal costs, he said, despite the fact that administrative costs today are only about half a percent of the programs' total budget.

Technically, Callahan sees the privacy and policy issues associated with the need to share data across multiple network environments as one of the biggest challenges, something he feels will bring closer to reality the notion of a central data repository for handling an individual's health care issues.