Medicare software maker suing state
BOISE – The nation’s largest provider of computer systems to handle Medicaid billing is suing Idaho, alleging that state officials broke the law when they threw out its bid on a $50 million contract.
Texas-based EDS Inc., which for 27 years has provided software to manage Medicaid claims in Idaho, wants a judge to block the state from giving the contract to rival Unisys Corp. until the EDS bid is re-evaluated, according to the lawsuit filed Tuesday in 4th District Court here.
Three companies – EDS of Plano, Texas; Unisys of Reston, Va.; and Fargo, N.D.-based Noridian Administrative Services – responded to a May 27 request for bids from the state Department of Health and Welfare for an updated claims payment and processing system. The new system would begin processing claims starting fiscal year 2008.
EDS, whose $1 billion Medicaid services unit does business in 19 states, accuses Idaho officials of dismissing its proposal on illegal, unreasonable and arbitrary grounds – and then failing to properly review the merits of its appeal to be reinstated.
“We haven’t been able to get a face-to-face meeting to explain,” Bill Ritz, an EDS spokesman in Washington, D.C., told the Associated Press. “We had run out of administrative options.”
Idaho’s EDS Medicaid billing system processes 40,000 medical claims daily with 17,000 health care providers, keeping track of about $21 million worth of transactions every week. The state has 175,000 recipients of the government-funded health care insurance for the poor and disabled.
The state required the contract be rebid this year, said state Health and Welfare officials, who expect to sign off on the agreement with Unisys early next year.
“Unisys had the better proposal that met our needs,” said agency spokesman Ross Mason. “We have to work out the details; we’re crossing the t’s and dotting the i’s.”
Mason declined to comment on the EDS lawsuit, saying Health and Welfare officials haven’t yet scrutinized the 31-page document.
His agency wants to have the new system in place within two years. Still, if an injunction were to delay awarding of the new contract, claims would be processed without interruption until the dispute is resolved.
“We have a system in place, that system would go forward,” Mason said.
Ritz maintains the proposal that was rejected by Idaho – for a new system already in place in several states – can process claims faster while reducing red tape.
Health and Welfare’s conclusion that EDS’ proposal didn’t meet department specifications for a new system “was based upon an improper and incorrect evaluation of EDS’ proposal, which, if properly evaluated, fully satisfied all of the department’s requirements,” the lawsuit says.