PROVIDENCE, R.I. (WPRI) – House Speaker Nicholas Mattiello said Wednesday he is “concerned” that the cost of Rhode Island state government’s biggest-ever IT project has nearly tripled to $364 million.
WPRI.com reported Tuesday that the Unified Health Infrastructure Project (UHIP) – a sprawling effort to build a new computer system to handle public-assistance programs such as Medicaid and food stamps as well as HealthSource RI – has seen its projected budget grow from $135 million to $364 million.
“I am always concerned when there are major cost overruns because state government should run as efficiently as possible,” Mattiello told WPRI.com in a statement Wednesday.
“The House Finance Committee and fiscal staff have been monitoring this issue closely, but it has been difficult because the numbers have been changing and they are not final,” he said. “Our concerns will be incorporated into future budget hearings.”
Michael Raia, a spokesman for the Executive Office of Health and Human Services, said the budget for UHIP hasn’t increased because of cost overruns but rather to take advantage of “an opportunity for additional federal funding to enhance and build upon the system that was first started four years ago.”
He said the state is already required to replace InRhodes, its 25-year-old eligibility system for most public assistance programs, and currently has “a unique opportunity” to use federal matching money to help pay for the project thanks to the president’s health care law, with the federal government covering 90% of some project costs instead of around 50%.
The second phase of UHIP, when it would replace InRhodes, was at one point in time expected to be finished by April 2015. That target date has been pushed back to July 2016 to allow time to build more functionality and do additional advance testing, Raia said.
“The goal of the UHIP remains the same and has been constant – it’s to streamline services and replace technology,” he said. “With additional support from the federal government we’ll be able to add more services, add more functionality, add more customer support and add more fraud protection.”
Senate President M. Teresa Paiva Weed directed questions about UHIP to state Sen. Lou DiPalma, the Senate’s point man on the project.
DiPalma said he learned about the new cost estimate during a meeting with Raimondo administration officials on Friday and is satisfied the project is still on track. He attributed the rising cost to “new requirements that have been added in” and the fact that the “scope of the work has increased” for Deloitte, the contractor.
“It’s a big number, and we have to remain vigilant, we have to continue the oversight to make sure we’re doing what we need, what’s necessary, and we’re not necessarily going to things that are ‘nice-to-haves,'” DiPalma, D-Middletown, told WPRI.com.
He added: “We can’t let it grow to be too large that it becomes unwieldy, because future maintenance of it becomes challenging.”
DiPalma said he asked for the meeting – which was attended by, among others, HealthSource RI executive director Anya Rader Wallack and chief digital officer Thom Guertin – after learning that about $3 million of a $20-million federal health grant the state won would be going toward UHIP. He said he also wanted to learn more about the possibility of collaborating with other states to save money.
“It’s a very large project. It’s a complex and complicated project,” DiPalma said. “Knowing that Thom Guertin and someone from his team is working on it gave me comfort, because I trust Thom to the nth degree. … We’ve got the right people from an oversight perspective looking at this from the technological side of things.”
Former Republican gubernatorial candidate Ken Block, founder of the advocacy group WatchdogRI and president of a software company, was far more critical of state officials. He said the public should be given more information about how the projected tab for UHIP grew to $364 million.
“The fact that Rhode Island has a third of a billion-dollar software project going on right now should be horrifying to everybody,” Block said.
DiPalma cautioned against abandoning UHIP due to concerns about the new price tag. “Let’s not cut off our nose to spite our face,” he said.
Raia also pushed back against critics. “We see this as a unique opportunity, because our systems are so dated, to truly build a 21st-century technology platform that will provide us with the IT infrastructure for years to come,” he said.
“Frankly, we’re not going to have this kind of opportunity to make this capital investment going forward,” he added. “With another administration in Washington it is unclear as to whether this kind of opportunity to get federal support and federal funds to build a system like this would be possible. Then it would fall on Rhode Island taxpayers.”Ted Nesi (email@example.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes the Nesi’s Notes blog. Follow him on Twitter: @tednesi