ACS, Georgia settle dispute

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

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

Georgia DCH would pay ACS about $9 million of $13 million in outstanding system development invoices. ACS would be paid the remaining $4 million in stages as it delivers certain system functions. 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 axe the $7.5 million Phase 2 of the project, which covered health claims payment and membership enrollment management systems. The entire contract is worth about $351 million and was awarded to ACS in 2001.