IBM, CGI team up with ACS on Calif. Medicaid Management System

According to an announcement released earlier today, CGI Group will partner with ACS and IBM to manage California’s Medicaid Management Information System (MMIS). The contract is worth $1.6 billion over ten years, and comes after a two-year bid process and a contentious battle between the state and EDS, now a division of Hewlett-Packard.

The team will coordinate health care services for more than seven million Medi-Cal beneficiaries from 80,000 health care providers throughout California, the company said. As fiscal intermediaries to California’s Department of Health Care Services (DHS), CGI and ACS will manage claims and payments between health care providers and provide other payroll services for those involved with the state’s Medi-Cal program.

In March, Electronic Data Systems lost an appeal due to unfair treatment in evaluation of its bid for the CA-MMIS. EDS has hundreds of employees in the Sacramento area handling claims processing, the Sacramento Bee reported, but according to a DHCS spokesman, ACS would rehire most of the workers.

According to the San Francisco Business Times, IBM will run data centers and application management services for the ten-year deal, while receiving roughly 25 percent of the $1.6 billion payout.

In addition, CGI will be responsible for automated business rules extraction and business change management services relative to DHCS’s transition to the new CA-MMIS and will manage the testing through a Sacramento-based center of excellence.

State officials said the contract would “reshape the future” of Medicaid in the California.