ACS and Georgia to settle healthcare system dispute

Affiliated Computer Services Inc. and the Georgia Department of Community Health have tentatively settled a dispute involving a health claims processing contract.

Under the agreement, ACS of Dallas would pay Georgia $10 million in penalties for delays and problems with the contract.

Meanwhile, the Georgia Department of Community Health would pay ACS about $9 million of $13 million in outstanding system development invoices, with the remaining $4 million to be paid in stages as certain system functions are delivered by ACS. The state would escrow an additional $11.8 million pending final certification of the system by the Center for Medicare and Medicaid Services.

The tentative agreement also would terminate phase II of the project, which was worth about $7.5 million. That phase covered a health claims payment system for state employees with the Medicaid payment system, and the membership enrollment management system.

The entire contract is worth about $351 million and was awarded to ACS in 2001.

Tim Burgess, the Department of Community Health commissioner, said the settlement would allow the state and contractor to focus on providing the best service possible to Georgia health providers and citizens who rely on the health claims system.

"There are still many operational challenges ahead of us with respect to implementing Phase I, but we and ACS are committed to working closely with the provider community to meet those challenges," he said.