EDS wins Oregon's $73 million Medicaid management contract

Oregon Department of Human Services

The Oregon Human Services Department has awarded a seven-year $73 million contract to EDS to create a modernized Medicaid Management Information System (MMIS).

The state’s current system contains 30-year-old software and was designed to handle about 260,000 claims per month. It now processes more 2 million claims monthly. The MMIS has limited online capabilities, no database capabilities and inflexible data structures, according to a departmental fact sheet.

The system, which tracks medical eligibility for about 600,000 residents, does not provide timely and accurate data to policy-makers. The vendor also no longer supports the current MMIS software, and a large number of system change requests are backlogged.

“We are replacing our grossly outdated system to keep pace with the changing needs of today's Medicaid program and to work more efficiently with our service providers and clients,” said Bryan Johnston, the state department’s interim director, in a statement. “The new system will make it easier for providers to determine eligibility, receive service authorizations, submit claims and receive payments.”

EDS will design, develop, implement and maintain Oregon’s new MMIS, which will be based on the company’s interChange Medicaid system, which is operating in Kansas, Oklahoma and Pennsylvania. The new system is expected to be operational by the fall of 2007. EDS will maintain the system through 2012, with three one-year options. The federal government will pay 90 percent of the costs.

The new system should provide significant savings, improve operating efficiencies through automation and reduce manual processes. It will decrease the processing time for claims from days to hours. It will also provide a self-service Web portal for the 31,000 health care providers in the state to allow for real-time eligibility verification, claims submission, payment tracking and submission of service authorizations.

The new system will also:

• Provide pharmacy benefit management services to support drug claim processing and other programs and provide pharmacy expertise, help-desk and auditing services.

• Implement a new “Decision Support Surveillance Utilization Review Subsystem” to help state officials create additional accountability of program expenditures and payments.

• Ensure compliance with the Health Insurance Portability and Accountability Act rules for privacy, security and National Provider Identifier.

In March, the Oregon department awarded a contract to Scottsdale, Ariz.-based FOX Systems to provide quality assurance and oversight for this project. EDS now manages Medicaid programs in 19 states. This year alone it has won three other state contracts from Wisconsin, Rhode Island and Massachusetts.