Human Services Likely To Approve Medi-Cal Contract for Electronic Claims Processing

The Department of Human Services is expected to approve a $150 million-per-year contract with Electronic Data Systems for Medi-Cal claims processing, despite the fact that the agreement has "slipped under the Capitol radar," the Orange County Register reports. The five-year contract, which does not require formal approval from the Legislature or "even a public hearing," would take effect in October and run through 2007 with a three-year extension option. Plano, Texas-based EDS has been processing claims for Medi-Cal since 1987, and its contract has been renewed each subsequent year. DHS spokesperson Ken August said the contract is being "competitively bid" but added that state guidelines bar the disclosure of those companies in the running. Some state legislators say that because of the size of the contract -- the largest of its kind in the country -- lawmakers should offer "special scrutiny." Sen. Richard Haynes (R-Riverside) said, "All I'm saying is that this contract ought to be subject to strict scrutiny by the Legislature. All the information ought to be put before us" (Howard, Orange County Register, 9/3).