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State negotiating with Wipro for human services IT overhaul

social serviceˇBy Morgan True 

For Vermont Digger

Vermont has entered negotiations with the technology firm Wipro to build a new computer system for tracking a person’s eligibility for state social service programs, according to sources familiar with the process.

Lawrence Miller, a top aide to Gov. Peter Shumlin, confirmed that the state has begun negotiations with one of the five companies that bid for the estimated $129 million project, but he would not say which firm. The state costs of the project are expected to be $58.8 million, according to a memo sent to the Legislature in February.

Miller said that while negotiations have started, the unnamed company is “a long way from hired.” State officials say they expect to have a contract in place by February 2016.

Efforts to reach a Wipro spokesman Tuesday were unsuccessful. Wipro advertises itself on its website as a “global information technology, consulting and outsourcing company” with $7.6 billion in profits in the most recent fiscal year.

The new computer system will track eligibility data for Vermonters applying for Medicaid, Reach Up (the state’s welfare program), food stamps, home heating assistance, childcare subsidies, child support and a host of other state human services programs.

Vermont has been pushing for years to phase out the 35-year-old ACCESS mainframe system that manages data for all Agency of Human Services programs, but the effort has hit numerous speed bumps. Problems with Vermont Health Connect have made lawmakers leery of expensive human service IT projects, and the state canceled the original RFP for the integrated eligibility system, as the project is known.

Gov. Peter Shumlin requested $16 million from the Legislature for the project, but lawmakers only approved $5.4 million as part of the two-year capital bill. State officials say they have enough money to go forward with the eligibility system, using an additional $13 million carried forward from previous appropriations.

The IT project would integrate human services eligibility information with data from Vermont Health Connect and the Medicaid Management Information systems. The integration would centralize and streamline all data, from eligibility to payments, for Vermonters who apply for benefits.

The three projects, known collectively as the Health and Human Services Enterprise, are expected to cost roughly $420 million and would be heavily subsidized by the federal government.

The state is in a rush to get the integrated eligibility project underway because enhanced federal matching dollars expire in 2018 for eligibility systems that include other programs besides Medicaid.

“It’s a really unique opportunity,” said Stephanie Beck, director of Health Care Operations for AHS. The project is still eligible to receive federal support after 2018, but not at the same level, Beck said.

“We want to make as much progress as possible before that cutoff date,” she added.

It’s been three years since Vermont first sought proposals from technology companies to build the new system to track people’s eligibility for social services.

It’s been almost 18 months since the state canceled that request. At the time, the Canadian tech firm CGI was the only company that bid for the project. State officials issued a new RFP in March 2014 because they said they wanted to expand the scope of the IE system and entertain bids from other vendors.

CGI built the Vermont Health Connect exchange, which contains portions of the new eligibility system for Medicaid benefits. Frustrated that the system, which was supposed to be finished in October 2013 remained dysfunctional and incomplete nearly a year after the launch of the exchange, Vermont parted ways with CGI last summer. The state agreed in a settlement to pay CGI $67 million of an $83 million contract, and then hired Optum to complete the exchange.

Optum also bid for the integrated eligibility contract. State officials received three other bids from Deloitte, EngagePoint and Monad in June 2014.

More than a year later, the state still hasn’t inked a contract for the integrated eligibility system.

There are several reasons for the delay, according to Dean Mudgett, principal assistant to Agency of Human Services Secretary Hal Cohen.

The new RFP required an independent review to ensure that the planned integrated eligibility technology will mesh with the other systems that are part of the Health and Human Services Enterprise. That review is expected to be complete by the end of the year and is being conducted by the Coeur Business Group.

In addition, Vermont had to move Web-hosting services for the enterprise system.

As a condition of its settlement with CGI, Vermont has paid $75,000 more per month in hosting fees starting in October 2014 because the transition wasn’t completed by the end of September 2014.

The transition was completed on Sept. 9, according to Mudgett.

In the interim, Vermont paid a total of $825,000 or $750,000 for the additional hosting costs, depending on whether Vermont paid CGI for the month of September. State officials would not immediately confirm the excess amount paid for hosting services as a result of the settlement.

State officials also did not provide an update on the MMIS contracting process. The new Medicaid system is expected to cost $105.3 million, with roughly $20 million expected to come from state coffers.

An RFP for the project was issued in August 2014, with a tentative contract start date of last January. Bids were due a year ago, in September 2014.