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State Demands Formal Dispute Resolution with Xerox



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July 10, 2014, Anchorage, Alaska – In a move to get proper payments to Alaska health providers, Governor Parnell is pursuing corrective action against Xerox for not fulfilling contract obligations related to the state’s Medicaid program. Governor Sean Parnell directed the Department of Law to take the next step in rectifying persistent problems with the Enterprise Medicaid Management Information System developed by Xerox. The Enterprise Medicaid Management System is operated by the Xerox Corporation through its subsidiary, Xerox Government Healthcare Solutions.

“The State of Alaska has worked in good faith to correct problems with Xerox,” Governor Parnell said. “We will work quickly and take all necessary steps to ensure Alaska health care providers are not impacted further by these defects. Should formal dispute resolution fail under our contract with Xerox, the state is prepared to pursue all remedies available under the contract, including legal action.”

Challenges with the Enterprise Medicaid Management System, which came online on October 1, 2013, have impaired the state’s Medicaid system in numerous ways, including significant hardships on the Alaskan health care provider community, the potential disruption to the medical care of the Alaska Medicaid recipient population, the ability to claim accurate match funding from the federal government, and the significant strain on staff at the Department of Health and Social Services (DHSS)

DHSS sent a “Notice to Cure” letter on March 24, 2014, and demanded a corrective action plan. A meeting with Xerox in Anchorage on May 16 and subsequent responses from Xerox have not led to an acceptable corrective action plan. The state has invoked the formal dispute resolution process set out in the contract to force Xerox to cure its performance deficiencies. Concurrently, the state is committed to working with providers to address payment processing issues and reconcile outstanding claims.

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