HP Signs $200 Million Medicare Maintenance Contract

HP has signed a $200 million federal contract to provide application support and maintenance services for Medicare Part B claims processing, which covers outpatient expenses.

Hewlett-Packard is expanding its federal government and health care IT services portfolio after signing a new, $200 million contract with the U.S. Centers for Medicare & Medicaid Services to provide application support and other services.

On Aug. 16, HP announced it signed the $200 million contract with the CMS. Under the multiyear contract, HP will provide application support and maintenance services for Medicare Part B claims processing.

In a statement, HP noted that Medicare Part B processes about 750 million claims each year, most of which are typically outpatient expenses, including doctor services, home health care and preventative care. To aid in processing the large volume of claims, HP will supply full development life cycle support for system maintenance and updates. HP will also deliver production and user assistance.

In addition to supporting Medicare's claims processing, HP will deliver services to Healthcare Integrated General Ledger Accounting System. This system exchanges information with Medicare's MCS (Multi-Carrier System) about claim billing, provider and beneficiary profiles, check settlement, payment and other claim-related data.

HP aims to support the 2003 Medicare Modernization Act and the Affordable Care Act, which was passed earlier this year. The company plans to apply large-scale governmental mandates such as HIPAA (Health Insurance Portability and Accountability Act) 5010 transactions. HP also intends to combine processing cycles within CMS data centers and to develop new system interfaces in support of the CMS National Level Repository. These efforts should help determine provider incentives for implementing electronic health records.

"As the Medicare population grows, CMS continues to modernize to be able to manage and deliver transformative technology that will improve Medicare services for beneficiaries and health care providers alike," Dennis Stolkey, senior vice president, U.S. Public Sector, HP Enterprise Services, wrote in a statement. "HP is proud to support CMS in their Medicare modernization initiatives."

HP, which will team up with four small businesses to provide valuable IT solutions, has historically provided support services to Medicare and Medicaid clients. Since the commencement of the programs, the company, becoming the largest processes management provider, has handled 35 percent of all Medicare and Medicaid claims-more than 2.4 billion health care transactions annually.

When it comes to IT services, HP is competing in a field with many other high-profile players, including IBM and its Global Services Division. In addition, Dell, with its Perot Systems purchase, is also expanding into government and health care IT services.

In a recent report, IDC finds that global IT services spending is slated to grow from $573.4 billion this year to $685 billion by 2014.