State to finalize $61 million contract for Medicaid computer system

Nevada's Board of Examiners plans to finalize on Friday a $61 million contract to buy and operate a new Medicaid computer system.

Charles Duarte, head of Health Care Financing and Policy, said the new system will "process, adjudicate and pay claims from providers."

"The advantage it will give us over the current system is it will do it much more quickly and do it electronically," he said.

He said the new system will handle such things as pharmacy bills in "real time."

"The pharmacy can submit a claim and get a real-time response whether the person is eligible, whether we cover that drug and how much coverage."

He said it also also let the state identify "third-party payers" -- other coverage such as insurance policies, which should pay before Medicaid must cover a client's bills.

He said it will bring the state in compliance with the federal Health Insurance Portability and Accountability Act.

After the board consisting of Gov. Kenny Guinn, Secretary of State Dean Heller and Attorney General Frankie Sue Del Papa gives its approval, Duarte said, the final step will be to get the federal government to sign off on the plan.

He said the new computer system should help the state Medicaid system "not only from a cost perspective, but from a quality of care perspective."

The Medicaid program in Nevada serves about 161,000 clients and costs nearly $850 million a year -- most of it federal money.

The contract before the Board of Examiners is a five-year deal with First Health Services Corp. for up to $60,942,422. Duarte said about $17.4 million of that is the actual cost of the computer system and 90 percent of the implementation costs are federal money.

In addition, the federal government is picking up 75 percent of the operating costs over the next five years.

Duarte said the program won't become another NOMADS -- the state's welfare computer system.

NOMADS originally was conceived as a system that would unify a wide variety of social-service support systems including welfare, food stamps and child support. That proved far more difficult than anticipated and costs ballooned out of control, finally consuming more than $125 million -- mostly in federal funds.

Duarte said Nevada is the last state to install a Medicaid computer system and will be using an existing, proven system with a few modifications.

"The advantage of being last is that we have the opportunity to learn from 49 other states," he said.