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California Starts Planning for Rebid of $864M Health Benefit Exchange System

Covered California in 2012 awarded Accenture a $359 million, five-year contract with three one-year options for initial and ongoing development of CalHEERS. The base term will expire in June 2017.

California is beginning to plan for the re-procurement of CalHEERS as day-to-day management of the system moves the Office of Systems Integration (OSI), state officials told Techwire.

The multifaceted California Healthcare Eligibility, Enrollment and Retention System (CalHEERS) project includes the public-facing Covered California Web portal that allows Californians to shop for health insurance under the Affordable Care Act, as well as the back-end rules engine that determines eligibility and enrollment processes for the California Health Benefit Exchange, Medi-Cal and Healthy Families programs.

Covered California in 2012 awarded Accenture a $359 million, five-year contract with three one-year options for initial and ongoing development of CalHEERS. The base term will expire in June 2017. The state has not yet made a determination yet whether to exercise any of those optional years on the Accenture contract, said John Boule, director of OSI.

“We're starting to plan for re-procurement, and what goes into that re-procurement, and things like that. It's because of the term of the contract. We're starting to look at that now with a June 2017 base term, and if we should be exercising options," Boule said.

From the project’s inception through June 2017, the state estimates it will spend a total of $864 million on CalHEERS for development and implementation, and maintenance and operation. CalHEERS initially launched in October 2013.

Functionally, CalHEERS project director James Duckens is now reporting to OSI, Boule said. The state staff working on CalHEERS are co-located in a facility contractually provided by Accenture; other contract staff and some staff from Covered California Department of Health Care Services and OSI also are there, Boule said. It’s an administrative shift from Covered California to OSI, Boule added.

Now that California’s health benefit exchange is up and running, managing it at OSI makes sense because it will allow Covered California and the Department of Health Care Services to focus on its business objectives rather than IT development and operation.

“Really it was a coming together. The dialog was pretty easy on that to say as we shift these things over on a multi-sponsor project that OSI is in the best situation to be able to facilitate that from a project management standpoint,” Boule said. OSI has been involved on the project from procurement through implementation.

OSI is in a good position to "operationalize" service delivery via CalHEERS while the project’s multiple sponsoring departments focus on their business, said Amy Tong, OSI deputy director.

Major system releases for CalHEERS will continue under OSI’s management, Boule said.

“Now it’s about prioritization of changes. What new things do we want? Want things do we have that we want to modify? … It’s fantastic what’s been implemented and the computing and technology power that’s behind CalHEERS provides some opportunities, but we have to optimize the technology and the business functionality to make sure it’s meeting our end-user needs,” Boule said.

Matt Williams was Managing Editor of Techwire from June 2014 through May 2017.