Hewlett-Packard Co. (HPQ) and Xerox Corp. (XRX) are vying for an estimated $500 million contract to replace New York’s Medicaid management system, the biggest in the U.S., according to two people familiar with the bids.
The companies are seeking the five-year pact as they battle for dominance in the market for Medicaid, the joint state-federal health insurance program for the poor, said the people, who requested anonymity because they aren’t cleared to publicly discuss the competition. Computer Sciences Corp. (CSC), which runs the current system, didn’t bid.
The company chosen to develop a new program to process claims for New York’s $52 billion Medicaid program may be positioned to win similar deals with other states. New York is shifting to a managed-care approach for Medicaid that’s aligned with the goals of President Barack Obama’s signature health-insurance program, and other states are likely to follow.
