State halts work on $154M Medicaid IT contract

The administration of Gov. Ron DeSantis is going to delay work on a $154 million information technology contract that is the central part of an overhaul of the state’s Medicaid management information system.

The decision was made by the Florida Health Care Connections (FX) Executive Steering Committee. The body voted unanimously this week to halt for at least 12 months work on its contract with Gainwell Technologies LLC for “core” services and to complete work on two other IT-related contracts by December 2024.

Documents show the delay in implementation is being attributed to a “critical resource constraint” at the Agency for Health Care Administration (AHCA), which houses the Medicaid office and has been the lead agency on the overhaul of the management information system that is fundamental to the operations of Florida’s $38 billion Medicaid program.

“We pulled our leadership team together … and we agreed. It was one of those things where I just pulled everyone in a room and said, ‘Raise your hand if you think we can make it,'” FX Director Mike Magnuson told members of the FX Executive Steering Committee Thursday. “No hands went up. So we agree the roadmap was not realistic and that the agency would need to make a decision on priorities.”

AHCA has described the core module as “the most fundamental functionality required for Medicaid transition,” and said it “involves the longest combined time frame for planning, procurement, and implementation.” The decision to stop work on the contract at the end of the year means AHCA will revert between $20 million and $33 million — once targeted to pay Gainwell — back to the state’s coffers.

Instead of working on implementing a core module, AHCA will direct its efforts in 2024 to do what’s necessary to finalize the implementation of two other IT-related contracts. AHCA inked a $140 million contract for a unified operations center with Automated Health Systems (AHS). The unified operations center is responsible for all interactions between the agency and stakeholders, a group that includes customers, providers, vendors, other state agencies and others.

The unified operations center is responsible for the management and tracking of outbound communications, as well as printing, fulfilling and mailing (including standard and electronic mail) information of any type as approved by the agency on a scheduled ad-hoc basis.

The center also provides historical and real-time analytic capabilities to understand issues, trends and opportunities to inform decision-making and improve the interaction with customers, health care providers and managed care plans.

The steering committee’s vote also directed AHCA to complete the implementation of the provider services module by the end of 2024. That IT contract was worth $33 million.

Florida decided in 2020 to scrap its current singular Medicaid technology system and to use a modular approach instead with the goal of improving functionality and building better connections to other data sources and programs.

To that end, the decision was made to procure several different IT contracts.

Magnuson said that the agency’s initial timeline to have the system operational by December 2024 when the current contract expires was attainable. That timeline was skewed, though after lengthy procurement delays. For instance, AHCA anticipated awarding the contract for the provider services module in January 2022 but didn’t do so until October 2023, nearly two years later.