CMS chooses contractors for data processing consolidation

The Centers for Medicare and Medicaid Services has chosen three contractors in its effort to consolidate its data processing operations. IBM, EDS and Companion Data Services will compete for tasks under the five-year indefinite-delivery, indefinite-quantity contract.

IBM will earn about $200 million through the contract, while CMS expects annual savings of $45 million from the consolidation.

CMS is attempting meet the requirements of the Medicare Modernization Act of 2003, which requires it to streamline the agency’s operations through competitive bids. The effort is part of the CMS IT Modernization effort, which also includes efforts to:

• Further standardize the implementation of policy changes.


• Establish better control of information processes and procedures.


• Reduce the CMS system security risk.


• Support increasing health care processing workloads.