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Audit: New Medi-Cal Computer System Could Face Long Delays

The rollout of Medi-Cal's new case management computer system is at risk of facing significant delays, according to an audit presented to lawmakers Tuesday by State Auditor Elaine Howle, the Sacramento Bee's "The State Worker" reports.

Medi-Cal is California's Medicaid program.

Background on Computer System

In 2010, California awarded a contract to Xerox to develop a $1.7 billion case management computer system, called the California Medicaid Management Information System. The contract expires on June 30, 2016, but it has a five-year extension option.

The new system will replace the current, 30-year-old system that processes payments for the Medi-Cal fee-for-service program.

The project will be rolled out in five phases, one of which already has been launched. According to the audit, phase one of the system addressed more than 27 functional requirements, but phase two -- which is expected to roll out in June -- is much more complex and will address more than 1,300 functional requirements.

Details of Audit

Without changes, Howle wrote that she expects Xerox to miss California's June deadline for phase two of the system.

The audit noted that similar projects that Xerox has been a part of in other states have faced or are still facing years-long delays. For example, Xerox finished:

  • New Hampshire's management system more than five years late; and
  • Alaska's system three years late.

Meanwhile, Montana expects that its Xerox system will by launched two years late, while the vendor is still working on a project for North Dakota that is six years overdue.

In the audit, Howle noted that California's system is "one of the state's largest and most complex information technology projects," adding that the "delays and other problems encountered by these other states with much smaller Medicaid programs strongly suggests that [the Department of] Health Care Services has a high risk of experiencing more delays and problems before its new system is fully implemented."

The audit also raised concerns about whether switching to a new management method would worsen the problem. According to the report, the team working on the project does not have sufficient documentation to guide the development process, which "can result in inefficiencies and rework that negatively impact the schedule and consumer resources needlessly."


The audit recommended that DHCS ensure that Xerox:

  • Address all concerns raised in the audit; and
  • Develop a roadmap to guide the project moving forward (Ortiz, "The State Worker," Sacramento Bee, 2/19).
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