Maryland AG reaches $81M settlement in dispute with Medicaid IT company

Computer Sciences Corp. will pay Maryland $81 million to resolve allegations involving its Medicaid technology contract with the state, Maryland Attorney General Brian Frosh said on Feb. 9.   

The settlement, which resolves both parties' claims, comes after the state alleged CSC did not meet the obligations of its IT contract with the Maryland Department of Health. MDH awarded CSC a Medicaid Enterprise Restructuring Project contract in 2012, which called for CSC to establish, implement and eventually help operate a new computer system for administering the state's Medicaid program, according to Mr. Frosh.  The new computer system was supposed to replace the state's existing decades-old system, which is still used by MDH.

Mr. Frosh, citing a state complaint, said within a year of awarding the contract to CSC, the contractor "was far behind schedule and CSC refused to perform contractually required work necessary to meet the requirements of the Affordable Care Act." The attorney general also said CSC refused to meet its full contract obligations unless it received an additional millions of dollars from the state, despite the state's $170 million fixed price contract with CSC. Maryland terminated its contract with CSC in 2015 after paying the company approximately $27 million.

The state wanted $500 million to resolve the case, but CSC said Maryland still owed it money for additional work the company completed, according to The Baltimore Sun.

DXC Technology, formed through the merger of CSC and the enterprise services business of Hewlett Packard Enterprise, declined to comment to Becker's Hospital Review.


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