CMS awards $292M Medicare data center contracts

The Centers for Medicare and Medicaid Services awarded Companion Data Services LLC, a subsidiary of BlueCross BlueShield of South Carolina, a task order valued at more than $200 million for data center operations that support Medicare claims processing across the nation.

The contract is part of the agency's migration to an Enterprise Data Center to consolidate its infrastructure

Under the six-year contract, Companion Data Services will provide electronic data processing and hosting operations for about 650 million fee-for-service claims submitted annually by hospitals, physicians and other providers in 30 states, the District of Columbia and Puerto Rico.

The award represents the majority share of a CMS task order for the processing of 841 million Medicare claims annually. Companion Data Services will process 54 percent of all Medicare claims by next January.

CMS ultimately will reduce its number of data centers from 20 to four under the modernization initiative. Although separated geographically, the four will act as one virtual enterprise center. The enterprise data centers aim to standardize implementation of policy changes, establish better control of IT processes and procedures and reduce CMS security risk.

CMS also awarded EDS Corp. a $92 million task order as part of the agency's migration to the virtual enterprise model.

EDS will host applications that process Medicare claims for services at physicians' offices and hospitals in 12 states in the West, Midwest and Northeast, including California, Hawaii, Kansas and Rhode Island. EDS will provide application hosting and production support services at its data center for approximately 180 million Medicare claims within these states.

The task order, which is the third that CMS has awarded EDS under the indefinite-delivery, indefinite-quantity procurement vehicle, is for one year with five one-year options.

EDS and Companion Data Services are two of the three companies competing for task orders under the 10-year, $1.9 billion Enterprise Data Center contract that CMS, an agency of the Health and Human Services Department, awarded last year. IBM Corp. is the other vendor. CMS is using the contract to consolidate and integrate data center operations supporting mainframe and client server applications.

CMS said it will transition software applications and hosting operations for Medicare, Medicaid and the state children's health insurance program, or SCHIP, to the new data centers over the next five years.

CMS last year awarded EDS task orders to perform similar hosting and support functions in six other states and for the agency's outward facing Web sites.

EDS administers $8.9 billion in Medicare benefits annually and processes about 316 million Medicare fee-for-service claims each year. EDS maintains the Medicare Part B Standard System, used to process more than 800 million claims annually.

EDS also provides fraud, waste and abuse detection services in a variety of states. It recently won a $7.1 million contract from CMS to provide fraud and abuse detection and prevention for Medicare Part A and B claims for the six New England states.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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