Gov. Jim Doyle announced Tuesday the state will save $93 million on a new Medicaid contract. The savings, which will come through during the next five years, are due to a re-bidding on the contract as part of Doyle’s contracting accountability initiatives.
The effort stems from Doyle’s plan to raise the quality of state contracts.
“This is a significant step forward in bringing accountability and fiscal responsibility to state contracting,” Doyle said in a release. “We can no longer afford the excesses of the 1990s. It is time for state government to be more responsible with taxpayer dollars.”
The contract with the Medicaid Fiscal agent provides information systems used for claims processing and customer service for Wisconsin’s public health-care programs like Medicaid, SeniorCare, BadgerCare and SSI Supplement.
The total cost of public assistance programs in Wisconsin is more than $4.3 billion per year, according to the release.
The state saved money on the contract when Doyle ordered that it be re-bid. The contract has not been competitively bid by the state since 1994.
“The big way you save money is by having a competitive bidding process. It has only happened four times in more than 25 years,” Melanie Fonder, spokesperson for Doyle’s office, said. “This is the first time in that process that the cost of the bid has come in lower than the previous contract.”
The low price of the new contract means savings for the state, which will eventually lead to more money spent on health care for citizens, the release reported.
“I think everyone would agree that any time that government can be more efficient, that’s a good thing,” Fonder said. “If we can save money on things like administrative costs, we can use that in other places that directly effects people.”
The new services will affect more than 800,000 recipients and 45,000 providers, according to the release. Many of the recipients are low-income families and the elderly, demographic groups that usually use public health care the most.
The new system also includes higher-tech programs for health care services.
“The big thing that is changing this time is a technology upgrade. If you think about this, the last time we had a competitive bidding process was 1994-95,” Fonder said.
Technology has advanced significantly during the decade since the last Medicaid contract. Now new web technologies can improve customer service and reduce paperwork for the provider.
The new system will be fully operational in 2007.
