TennCare Computer System’s Completion Date Still Unknown

Although he won’t speculate as to when the state’s new TennCare computer system will be completed, Darin Gordon, the program’s director, told members of the General Assembly he hopes a planned third-party audit will provide that answer.

Gordon gave testimony Tuesday to the Joint Fiscal Review Committee on the progress, or lack thereof, of the Northrop Grumman Corporation in developing the new “Tennessee Eligibility Determination System” for TennCare.

Tennessee has so far paid Northrop about $4.7 million of the $35.7 million it committed to the cybersecurity contractor in December of 2012, when they signed a three-year contract to develop the new system made necessary by the Affordable Care Act, Gordon said.

TEDS was supposed to go live in October 2013, and Northrop was last paid in January, Gordon added.

There are four “different tools” for the agency to ensure contractors comply with contract stipulations: penalties, liquidated damages, withholds and non-payment, in order of weakest to strongest. “We’re using the biggest tool that we have at this point to make sure that everybody is properly motivated to getting to where we want to be,” Gordon said.

Gordon said that Northrop, one of five firms to bid on the contract, made the lowest bid to produce the system. The next lowest was for $58 million, with the highest bid coming in at $109 million.

Wyoming, one of the other states to use Northrop to produce their system, is also “having challenges,” Gordon said.

Gordon told the committee that he had no idea as to when the system would be completed, because he’s “lost confidence in people’s ability to accurately predict” a timeline for completion.

Northrop is currently 99 percent done with its systems integration testing, the second phase of its five phases of implementation — but that doesn’t mean that phase is nearly done, Gordon said, because when issues with testing arise, developmental changes need to be made and the phase “can be at 99 percent for a longer period of time.”

The company is also about 80 percent complete with its third phase — user integration testing, but can’t start on the last two phases until the others are completed, Gordon explained.

“These are complex systems, there’s a lot of working in a very tight time-frame, and we want to make sure that what we do turn on, works,” Gordon said.

On Aug. 18, TennCare signed a no-bid contract with KPMG, an audit and advisory services firm, to run a 14-week audit of Northrop’s progress at a cost to the state of $1.2 million, Gordon told the committee. That report is expected to be ready sometime in late November or early December.

Following Gordon’s testimony, the committee also approved an extension of a contract with Policy Studies, Inc., the contractor who provides eligibility determination and processes application for the state’s children health insurance program. The contract, which is being extended through Dec. 2015 as a result of the delay in implementing TEDS. The contract extension is eligible for a 75 percent federal match.

The total cost to the state of the delay in getting the computer system on-line is not currently known, Gordon said.

The failure in bringing the new system online is one reason that TennCare is facing a lawsuit from the Southern Poverty Law Center, the National Health Law Program and the Tennessee Justice Center on behalf of several Tennesseans who have allegedly been denied coverage, though they claim eligibility.

“These system failures have serious impact on vulnerable Tennesseans and the health care infrastructure we all reply upon. It’s time for the state to spend less time blaming others and more time managing problems that have devastating consequences for our state,” said Michele Johnson, executive director for the TJC, in an e-mail.  Tennessee’s “lack” of a TennCare enrollment process “makes us unique in the nation,” she added.

The TJC filed the lawsuit because despite having met with TennCare officials since October of last year, “at some point it became clear that their willingness to problem-solve was not there,” and the Tennesseans they represent “couldn’t wait any longer,” Johnson told TNReport Wednesday.

Gordon was questioned by state Rep. Brenda Gilmore, a Nashville Democrat, about whether anything was being done to help hospitals cope with financial problems stemming from the inability to process emergency Medicaid applications because of the delay in TEDS implementation.

Gordon told Gilmore that because of the pending litigation the only information he could give was already included in his response to the federal Centers for Medicare & Medicaid Services, or in the briefs filed in the lawsuit.

However, the Gordon assured Gilmore that TennCare is in contact with the Tennessee Hospital Association “pretty much every week.”

Johnson told TNReport that she “thought it was interesting” the administration continued to say they couldn’t comment on anything related to the lawsuit because government agencies are required to “answer questions that the legislature has for their constituents.”

The next hearing in the federal case is scheduled for Friday.

Gordon noted to the committee that although TennCare has appeared before the legislature in the past, it wasn’t a result of computer system problems.

“Every state in the country all started from different starting points,” Gordon said. “Some had some modern technology already in place, and only had to adapt that technology to the new requirements. Other states, such as ourselves, had to start from scratch because our system was an old legacy system not capable of handling the changes that would be necessary to comply with the ACA.”

Additionally, the changes required by Obamacare have been “some of the most complicated” for the system since it began, Gordon explained.

Several other states — such as California’s backlog of hundreds of thousands of enrollees, or Oregon’s broken website and over-taxed Medicaid rolls — have had their own problems in developing a working system, Gordon said.

“These are complex systems, and are being implemented on a very quick runway, and so I think, if you look across the country, a lot of folks have had challenges with these,” Gordon said.