Xerox takes over $1.6B Medi-Cal claims processing contract

Xerox announced on March 21 it is managing the claims processing system for California Medicaid. The program known as Medi-Cal is the nation’s largest and serves 7.5 million people, according to the company statement.

The announced transfer of the Medicaid Management Information System, or MMIS, to Xerox is a critical milestone in the 10-year, $1.6 billion contract signed in 2010 by ACS, which was acquired by Xerox in February 2010 and now goes to market under the Xerox brand, the news release explained.

Xerox assumed operational responsibility in October 2011, but only publicly announced its role now.

The company best known for its printing and duplicating machines has processed more than 90 million claims totaling $7.5 billion since then.

The Xerox announcement said the company intends to make the program’s information system more efficient and give the state more control over how it pays health care providers including physicians, pharmacies and hospitals.

“This important change advances our goal of improving delivery of services while also increasing the efficiency of programs,” said Toby Douglas, director of the California Department of Health Care Services, in the news release.

The next milestone will be when Medi-Cal moves to a new MMIS called Health Enterprise, which meets Medicaid Information Technology Architecture (MITA) standards so the state can maximize federal funding. Health Enterprise will give California flexibility to even more precisely and quickly pay claims, and prevent fraud and abuse.

Xerox operates Medicaid systems for 11 other states, the District of Columbia and the Labor Department, annually processing more than 570 million Medicaid claims and $50 billion in payments.

Xerox Corp., of Norwalk, Conn., ranks No. 56 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.