) Enterprise Services arm recently signed a 4-year service
renewal deal with the Department of Vermont Health Access (DVHA).
The contract price was settled at $48.0 million.
The department operates under the State of Vermont Agency of
Human Services, which has been formed to develop and execute
policy on Human Services for the state. DVHA is responsible for
managing Vermont's publicly funded health insurance programs.
Per the contract terms, H-P will continue to act as a Medicaid
fiscal agent or primary information technology provider to the
DVHA. 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 health care providers
and keep pace with nationwide healthcare reforms.
H-P shares a 31-year old relationship with the DVHA. The success
of the Medicaid services can be gauged from the fact that H-P
handled more than 9.6 million claims annually for over 12,000
health care providers last year.
The tech giant is already serving as a fiscal agent to 21 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 health care 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
The U.S. government's endeavor to expand the information
technology industry to become a major player in health reform
will help drive IT spending in the health care 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 #2 (Buy). Investors may also
consider technology stocks such as
Lionbridge Technologies Inc.
), which have a Zacks Rank #1 (Strong Buy) and are worth
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