NASHVILLE — State officials hope to decide later this month whether they will have to junk a problem-plagued $37.5 million computer system that was supposed to start making Medicaid eligibility determinations last January.
It’s one of three options outlined by TennCare officials on the Northrop Grumman Corp. system.
TennCare Director Darin Gordon said Tuesday he hopes to have a recommendation from KPMG, a consultant hired at a cost of $1 million to determine the project’s viability, by the end of December.
“And that’s also where we hope to make our decision as well as far as what the best course of action is,” Gordon said.
TennCare officials discovered that other states spent from $98 million to $184 million to make their systems compatible with federal computers under the Affordable Care Act.
“It’s evident that our winning bid came in so far outside of the ball park that the approach envisioned by our vendor had likely little potential for success,” TennCare Chief Medical Officer Wendy Long told Gov. Bill Haslam during the agency’s budget presentation last week.
The three options are the same as what Gordon outlined to reporters in July. They are:
• Proceeding with Northrop Grumman if the system proves workable.
• Switching to another vendor and completing work on the existing system.
• Getting a new vendor and starting over.
Tennessee has spent $4.6 million on the project so far. With 90 percent of the cost borne by the federal government, the state share comes to $460,000.
“At the end of the day, we’re clearly not where we want to be,” Gordon told Haslam last week, noting that given TennCare’s track record he is “very confident that we will turn this around and have the best-in-class system.”
The state computer is intended to give thousands of low-income Tennesseans access to health care under the Affordable Care Act. It’s supposed to work seamlessly with federal computers to verify whether people qualify for TennCare, the state’s version of Medicaid.
But with the system still not working months after the deadline to be up and running, people who desperately need health care have run into insuperable barriers, said Michele Johnson, executive director of the Tennessee Justice Center. The TJC and two other groups sued the state in July over the lengthy delays in getting some Tennesseans qualified for Medicaid.
Johnson recalled Gordon telling a legislative committee in August that the system should be running by Thanksgiving.
“As far as I can tell there’s no plan. That’s a problem,” Johnson said. “For a lot of reasons our health care infrastructure depends on a competent process for people really being eligible for TennCare and there isn’t one. We continue to get calls from people who are eligible for TennCare and they can’t get it.”
Johnson said the state should never have gotten rid of hundreds of Human Services Department eligibility counselors. The state says it later put in 350 certified counselors to help low-income Tennesseans lost in the federal system due to conflicting financial information from different sources on whether they qualify for TennCare.
A federal judge in Nashville in September issued an injunction ordering the state to address problems or find ways to work around them. The state has begun doing that but also has appealed the injunction to the 6th U.S. Circuit Court of Appeals.
Gordon said Tuesday that many states have had problems with their computer systems and several are having to scrap their systems and start again.
But he acknowledged Tennessee has major issues, although he disagreed strongly with Johnson on the extent of the problem. Gordon said the state has implemented a number of “work-arounds” designed to help people determine their eligibility.
“We’re not where we want to be,” Gordon said. “We have higher standards for ourselves. But we’ve turned many areas that were not working to our expectations.”
He said the Affordable Care Act represented the “single biggest change in Medicaid eligibility” in the federal program’s 50-year history. Moreover, Gordon said, 120,000 Tennesseans have become TennCare recipients since Jan. 1.
Contact staff writer Andy Sher at asher@timesfreepress.com or 615-255-0550.