IT companies are expected to pull in new business as the U.S. moves toward full implementation of the Affordable Care Act, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 12/21/12).
Existing Health IT Contracts
Currently, Hewlett-Packard operates Medicaid data systems for 21 states. Xerox runs Medicaid data systems for 12 states and the District of Columbia, and it also has smaller Medicaid IT-related contracts with 24 states.
The two companies together process billions of dollars in Medicaid claims. Their data systems also help determine Medicaid eligibility and identify potential fraud. In addition, Xerox and HP operate call centers that work in conjunction with private insurers to answer questions from Medicaid beneficiaries.
Smaller companies -- including CNSI and Molina Healthcare -- have secured a few Medicaid IT contracts, most of which are valued at more than $100 million each over several years.
Expected Growth in Business
According to the Congressional Budget Office, Medicaid enrollment would increase by 17 million beneficiaries if every state participated in the ACA's expansion of the program. Such enrollment growth likely would require IT companies to upgrade Medicaid data systems and build new IT infrastructure.
Sue Arthur -- vice president of health and life sciences at HP -- said, "The Medicaid expansion gives us an opportunity to bring a broader set of technology to states."
In addition, some IT companies are seeking contracts to build infrastructure for the ACA's state-run health insurance exchanges. Xerox recently secured a $72 million health insurance exchange contract from Nevada and another $68 million contract to operate a small business health insurance exchange in Florida.
Mary Scanlon -- senior vice president for government health care solutions at Xerox -- said, "Exchanges are a small piece of our business now, but we have made the investment and think it will grow" (Galewitz, Kaiser Health News, 12/20/12).