State Seeks Proposals for New Medicaid Payment System

ALBANY, N.Y. (June 4, 2010) - The State Department of Health (DOH) today released a Request for Proposal for a contractor to design, develop and operate a new automated system to process Medicaid claims that would replace the current Medicaid Management Information System.

Under federal law and regulation, state Medicaid programs must maintain a mechanized claims processing and information retrieval system to process claims and to produce service utilization and management information needed to administer and audit the program.

New York Medicaid provides essential health insurance coverage to more than 4.7 million New Yorkers, including families, low-income adults, the elderly and disabled people. eMedNY processes transactions 24 hours a day, 7 days a week and electronically processes more than 437 million transactions each year. Controls in the system ensure accurate payment of claims and prevent waste. The system is monitored by DOH staff, the Office of the Medicaid Inspector General and the Office of the State Comptroller.

State Health Commissioner Richard F. Daines, M.D., said, "Medicaid is an essential component of federal health care reform. This procurement will create a state-of-the-art claims and information system that better serves the health care providers who care for our patients, safeguards program integrity and supports implementation of health care reforms."

The replacement Medicaid Management Information System will comply with MITA (Medicaid Information Technology Architecture) and use modern architecture that is sufficiently flexible to support the changing needs of New York State's Medicaid program. It will provide all the functionality of the current system and enhanced functionality for providers, pharmacy benefit management and other processes. The new system will also support all federal requirements including the Health Insurance Portability and Accountability Act (HIPAA) version 5010; NCPDP D.0 Electronic Data Interchange (EDI) standards; the International Classification of Diseases ICD-10 Coding System and a commercial-off-the-shelf (COTS) Financial Management System solution.

The procurement will result in an eight-year contract. The first three years will be devoted to design, development and implementation of the new system. At that point, operational activities will be turned over from the current eMedNY system to the replacement system. Upon federal certification of the new system, New York will receive enhanced federal funding of 75 percent of the cost of development.

The Request for Proposals is available on the Department of Health's web site at Proposals are due on October 29, 2010.