Tennessee may just scrap a doomed computer system meant to determine who is eligible for the state’s Medicaid program and find a new contractor. That’s one of three options outlined by TennCare, who hired Northrop Grumman to build the system. It was supposed to be done a year and a half ago and remains nowhere near complete.
In a hearing with Governor Bill Haslam, TennCare chief medical officer Wendy Long said it has become clear the $38 million price tag was never going to be enough. Other states have spent $98 – $184 million on similar systems.
“It’s evident that our winning bid came in so far outside of the ballpark that the approach envisioned by our vendor likely had little potential for success,” Long said.
By the end of the year, TennCare hopes to chart a path forward, which could include salvaging some of the work that’s already been done. The agency already hired consulting firm KPMG for $1 million to help figure out what to do.
“Nobody is really in a great steady state at this point,” TennCare director Darin Gordon told WPLN. “What we have to look at is who do we think brings the expertise that we need, can they deal with the complexity of this size of implementation and then increase our odds for success. So I can’t rule out anything.”
In their defense, TennCare officials point out that the state has only paid Northrop Grumman $4.6 million. And because of the federal match on system upgrades, only 10 percent of that has been state tax dollars.
Other states have hit similar snags, though Tennessee has had more trouble than almost anyone. The problem spot is a new Medicaid calculation known as “modified adjusted gross income.” According to TennCare officials, when an applicant’s own estimate doesn’t match up with their most recent tax return, the application gets kicked back.
The federal government has been sending increasingly stern memos to inspire the state to move faster, saying the delays prevent deserving people from getting health coverage they qualify for and need. Currently, the only way to apply for TennCare is through the federal marketplace on HealthCare.gov, which was not meant to by the primary method for determining Medicaid eligibility*.
TennCare has put computer kiosks in some Department of Human Services offices around the state. And 350 DHS employees are staffing the kiosks to offer in-person help.
“It’s not the first time we’ve experienced significant challenges in this program,” Gordon said. “But we have a long track record of turning things round in this program and this will be no different.”
*A previous version of this story mistakenly said HealthCare.gov was not designed to determine Medicaid eligibility, which missed some nuance. We regret the error.