A year after a contractor failed to deliver a new computer system to TennCare, the agency is starting over. Northrop Grumman won the $35 million project three years ago but has never brought online the new system for determining who is eligible for health benefits.
Things got so bad with Northrop Grumman that TennCare hired an outside accounting firm a few months ago to come in and audit the contract. KPMG – which was paid $1 million for its help – told the state it might be a good idea to part ways.
A statement from TennCare says the two parties have “mutually decided” to split. Northrop Grumman was only paid $4.6 million for its incomplete work, and 90 percent of that money came from the federal government.
TennCare has not laid out a timeline for hiring a new contractor to build an eligibility system, but agency leaders have suggested it will cost a lot more than $35 million. Until then, the state will continue to process TennCare applications through the federal health insurance marketplace website.