HP, Alabama Sign $135 Million Medicaid Contract

HP has signed a $135 million contract to provide technology services to the Alabama Medicaid Agency, which is seeking to cut costs and comply with new federal regulations.

In a move that further expands its state government and health care portfolio, Hewlett-Packard has signed an eight-year, $135 million technology services contract with the Alabama Medicaid Agency. The contract allows the state to keep costs low while meeting new HIPAA (Health Insurance Portability and Accountability Act) regulations, improving health care delivery, and increasing access to medical records.

The contract, which HP announced Aug. 24, continues a 30-year relationship with the Alabama agency. Medicaid is a program that pays health care costs for low-income families and the disabled.

In 2008, HP implemented interChange, the state's new MMIS (Medicaid Management Information System), which the federal government certified earlier this year. The agency handles health care for more than 900,000 residents annually. In 2009 alone, HP processed nearly 32 million Medicaid claims for health care providers in the state.

"With the expected enrollment increases and regulatory changes, Alabama requires a system that efficiently meets providers' as well as recipients' needs so the agency can focus on our main objectives: managing our budget, improving quality and reducing fraud and abuse," Carol Steckel, commissioner of Alabama Medicaid Agency, wrote in a statement.

"Based on our long relationship, HP will help us maintain a quality Medicaid program and support improved health outcomes for our recipients while allowing us to be good stewards of taxpayer dollars," Steckel added.

HP's main goal will be to implement system enhancements to help the agency comply with new federal HIPAA 5010 requirements. The company will also produce several Web-based features to modernize the state's health care services. These enhancements include:

  • Electronic provider enrollment, which will reduce costs and eliminate the handling of more than 50,000 pieces of paper.

  • A secure Website on which patients will remotely access health records, update information and check eligibility.

  • Electronic prescriptions sent directly from physicians to pharmacies.

To support the maintenance of high-performance and scalable infrastructure, HP will migrate the agency's storage to an HP StorageWorks 4400 Enterprise Virtual Array (EVA4400) storage area network Tier-1 environment. With assistance from the HP Migration Competency Center, the core interchange application server will be moved to HP-UX.

"HP and the Alabama Medicaid Agency are delivering a flexible, technically advanced system and streamlined processes to meet the agency's need to conserve state funds while improving service for health care providers and Alabama's Medicaid recipients," said Barbara Anderson, vice president, State and Local Health and Human Services, HP Enterprise Services, in a statement. "HP's 40-plus years of Medicaid and health care technology experience converge to develop and provide quality service delivery that will continue meeting the state's needs."

The Alabama contract is part of a larger health care initiative by HP. In August, the company signed a $200 million federal contract to provide application support and maintenance services for Medicare Part B claims processing. HP is competing with several other high-profile IT services providers, including Dell, which recently purchased Perot Systems, and IBM's Global Services Division.