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HP’s Conway Growth Linked to Medicaid

3 min read

Using federal dollars to buy private insurance for the working poor is Arkansas’ novel approach to expanding Medicaid under the federal Affordable Care Act.

But in some ways the Medicaid industry is already privatized: Much of the work — in around 40 of 50 states — that’s involved in processing Medicaid claims is done by for-profit companies.

The biggest player in Medicaid processing is Hewlett-Packard Co. of Palo Alto, Calif., and Arkansas is one of its customers, to the tune of $46.8 million in the current fiscal year.

What’s more, Arkansas is also a beneficiary of HP’s work in health care: This year, the company will open a regional development center in Conway, where it already has a customer service and tech support facility. The new center will provide support for its commercial and state health care portfolio across the country, eventually hiring up to 200 employees there

HP’s work in health care goes dates back to the 1960s, and that segment has grown to become a significant revenue source for the tech juggernaut that is known mainly for computers and printers.

“Across health and life sciences — meaning state government health care, commercial health care and the life sciences base — we are the No. 1 provider for Medicaid fiscal services,” said Sue Arthur, vice president of U.S. health and life sciences for HP’s enterprise services sector. “The work we do in Arkansas, we do that work in 19 states. We serve the top 10 pharmaceutical manufacturers in the global 500, and we have relationships with a number of health plans, including some that extend 40-plus years.”

Bill Ritz, a spokesman for HP, said that HP has about 50 percent of the Medicaid market.

HP’s 2013 revenue was $112 billion, down about 7 percent from 2012. Its enterprise services, which include its health care sector, accounted for $23.5 billion of its revenue, up 8 percent from 2012.

Income in 2013 was $5.11 billion, compared with a loss of $12.6 billion in 2012.

Types of Services

So what, exactly, does Arkansas get for almost $50 million a year?

HP’s work involves everything from ensuring the claims belong to authorized Medicaid users to double-checking that the medical conditions in the claim match the patient.

According to Ritz, the company processes each year more than 1 billion claims nationwide for providers and pays out to providers something in the order of $140 billion, with Arkansas accounting for some of that.

“It’s a pretty big deal,” Ritz said. “We have to process them and make sure they’re correct.”

HP provides a range of Medicaid support services and products. For example, its InterChange Medicaid Management Information System has been rolled out in 13 of HP’s 19 client states during the past decade. Arthur said it uses HP’s hardware, software and data centers.

“It is the backbone for managing and processing claims and related transactions for the Medicaid population,” Arthur said. “We’re working with the state providers and the members to properly provide their administration.”

HP also helps states analyze the data revealed in the claims.

“We mine the data there to help states understand and get ahead of health care trends,” Ritz said. “If they’re saying there’s an outbreak of flu, or something like that, we manage registry programs for a lot of states, and that not only helps them immunize their people, but also makes sure of where the serum goes.”

“We’re almost twice as big as our next competitor,” he said.

“We’re deadly serious about that business,” Arthur added.

Arthur said HP’s status as a fiscal agent for Arkansas’ Medicaid services influenced the company’s decision to expand in Conway.

Generally, however, the new hiring has to do with the increased demand for HP’s health care services. That demand was increasing even before the rollout of the Affordable Care Act, Arthur said, but health care reform certainly has played a part.

“There’s pressure on the U.S. system from a cost and capacity perspective,” Arthur said. “So that really requires a technological strategy.”

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