) Enterprise Services arm recently signed a 6.5-year service
renewal deal with Indiana's Department of Administration. The
contract price was settled at $220.0 million. The Indiana agency
supervises administrative processes of the state's bureaus and
departments, including procurement, travel, maintenance of public
buildings, and others.
Per the contract terms, H-P will continue to act as a Medicaid
fiscal agent or primary information technology provider to the
Indiana Department of Administration. H-P will implement a
Medicaid Management Information System (MMIS), which is a
mechanized claims processing and information retrieval system
within the department. This will help the agency to quickly adapt
to regulatory changes and provide better healthcare to citizens.
Moreover, as a fiscal agent, the tech giant will review and
process all medical claims, manage finances, provide call center
support and upgrade call center technology. H-P's services will
also help the state to improve Medicaid programs, deliver more
critical health information to a larger number of healthcare
providers and keep pace with nationwide healthcare reforms.
H-P shares a 20-year old relationship with the agency. The
success of the Medicaid services can be gauged from the fact that
H-P handled more than 85 million claims annually for over 46,000
healthcare providers last year.
The tech giant is a fiscal agent to 20 other states' Medicaid
programs. The need for an efficient Medicaid program arises from
the enactment of the U.S. Healthcare Reforms Bill. The goal of
the reform is to make healthcare more affordable for Americans.
The basic objectives of the reform were presented in the Patient
Protection and Affordable Care Act. Per the Act, beneficiaries
are expected to join Medicaid through a registration process,
which requires exchange of information regarding health. Medicaid
is a joint endeavor of the states and Federal governments,
designed to provide medical care to those under the federal
poverty level, including expectant mothers and children.
The U.S. government's endeavor to expand the information
technology industry to become a major player in health reform
will drive IT spending in the healthcare segment over the coming
years. We believe that H-P, with its strong position, would be
able to capitalize on government initiatives.
However, H-P has to compete with
Computer Sciences Corp.
) in the Medicaid service space.
Currently, H-P has a Zacks Rank #3 (Hold). Investors may also
consider technology stocks such as
Pega Systems Inc.
), which have a Zacks Rank #1 (Strong Buy) and are worth
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