Accenture, Texas say adios to outsourcing contract

The Texas Health and Human Services Commission and Accenture Ltd. announced March 13 that they will dissolve an outsourcing contract that called for Accenture to operate an integrated eligibility determination system for state health and welfare programs.

In a statement, Accenture said the two parties could not agree on changes to implement a "rebalancing" of the contract that HHSC Commissioner Albert Hawkins announced on Dec. 21, 2006. Texas and Accenture had been in talks since November 2006 over the revised terms of the contract, the company said.

HHSC and the Texas Access Alliance, as the Accenture-led project is known, are developing a timeline to transition the services under the contract, the agency said. Hawkins said in a statement that he expects the final transition to take place no later than Nov. 1.

Accenture won the outsourcing contract in June 2005, which covered call center operations, children's health insurance processing and eligibility determination, maintenance of the integrated eligibility computer system and enrollment broker services. Initially valued at $899 million when awarded, the contract was revalued at $543 million in December.

While some functions, such as children's health insurance processing, had traditionally been performed by the private sector, other aspects, such as operating call centers and other eligibility determination duties, had not been outsourced before.

During the transition, subcontractors will continue to perform some of the work while the state decides whether to hire staff and develop systems internally or use different contractors.

Reston, Va.-based Maximus Inc., one of the alliance's key subcontractors, will continue to process children's health insurance program applications until the program can be integrated into the new computer system, the state said. Maximus also will continue to perform enrollment broker services to help Medicaid clients enroll in managed care plans. The terms of these agreements are currently being negotiated, Maximus said in a statement.

Accenture said it does not expect the dissolution of the contract to have a material impact on its financial performance.