RI officials request up to $124M more for biggest-ever state IT project

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PROVIDENCE, R.I. (WPRI) – Rhode Island officials recently requested another $124 million to fund state government’s biggest-ever IT project, but they say much of that number represents a “wish list” of possible enhancements, and far less money actually will be needed to run the system.

At issue is the Unified Health Infrastructure Project (UHIP), a sprawling effort to build a new computer system to handle social services such as Medicaid, food stamps and HealthSource RI. Its cost has soared from less than $200 million to $364 million as of last year, with most of the money provided by the federal government. Its second and final phase is set to go live on Tuesday.

In an application filed in July and obtained by WPRI.com, the R.I. Executive Office of Health and Human Services (EOHHS) requested federal approval to spend $124 million on UHIP in the 2017-18 fiscal year, which the documents show would bring the project’s total cost to $487.4 million from 2011 through 2018.

But in an interview last week, EOHHS Deputy Secretary Jennifer Wood was adamant that the next year of UHIP spending will come nowhere near $124 million. She described the amount as an opening bid in months of discussions with federal and state officials over how many additional tools should be added to the system.

The total cost to build UHIP and get it up and running is still $364 million, Wood said, though she acknowledged there always will be annual maintenance and operations costs once it’s in place. But, she said, without putting every possible wish-list item on the new application, the state would lose the opportunity for the federal government to pick up as much as 90% of the tab for those features.

“There’s a weird incentive here to ask for as much as you can get,” Wood said, adding: “This is an aspirational document we put in front of them.” She compared it to taking out a home-equity line of credit from a bank.

Federal officials are expected to make their decision on the latest UHIP application sometime in the next month.

Wood and Wayne Hannon, EOHHS’s deputy secretary for administration, also acknowledged an error in the UHIP document spotted by WPRI.com: while the annual project budgets have been listed as showing estimated spending through 2020, the later years were being left blank, so the numbers were only through the following fiscal year. (There is no significance to the year 2020 for UHIP, they said.)

UHIP was created in an effort to solve two problems: how to sell insurance in Rhode Island under President Obama’s health law, and how to replace InRhodes, the state’s existing computer eligibility system for social-service programs, which has been in use since the 1980s. The Chafee administration decided in 2011 to do the two projects as one so Obamacare funding could also be tapped to replace InRhodes.

“This is an all-in, integrated system,” Hannon said. “It includes basically one-stop shopping for anybody who could be eligible for these services in the state of Rhode Island. I believe it’s the first … fully integrated system [in the country].”

The latest UHIP numbers are likely to draw attention from lawmakers, who are keeping a close eye on the huge project after its price tag jumped $109 million last year. While the federal government is picking up about four-fifths of the project’s cost, state taxpayers are responsible for the rest, with the state share totaling almost $79 million as of the current budget.

The Raimondo administration has defended the rising cost of UHIP by arguing the system will more than pay for itself over time, starting with about $16 million in this year’s budget, through streamlining operations and removing residents from the benefit rolls more aggressively when they are no longer eligible.

While the federal application process for last year’s bump of $109 million is the same as for this year’s bump of $124 million, Wood insisted the two requests are much different. She said the state would not have been able to finish the system without last year’s additional appropriation, but it can continue operating with much less than the $124 million requested for next year.

“You don’t get to $364 [million] in FY17 and never spend another penny for functions,” Wood said, referring to the 2016-17 fiscal year. “There will be additional enhancements in the coming years. But we will not be building a whole system.”

Wood and Hannon said they could not give an exact estimate for the minimum amount that would be required to run UHIP in 2017-18. But they indicated they expect the cost of standard annual maintenance to be between $10 million and $14 million, versus nearly $18 million in the new application, and that other costs will also come in lower depending on what federal regulators and state leaders decide to authorize.

The state had originally hoped to launch UHIP’s second phase in April 2015 but has pushed back the date repeatedly due to technical issues and expansions in the project’s scope.

In an interview last week, Health and Human Services Secretary Elizabeth Roberts said she expects “some problems” when the state flips the switch on Tuesday, but said all “major problems” had been fixed. More minor issues “we think will impact a small number of people,” she said.

“What we have is we have ways of managing around the system if it’s not perfect,” Roberts said. “And if problems come up that are unexpected – which will happen with a system this big – we’re going to have lots of extra employees there to help so that people get the service they need.”

The state’s contract for UHIP with Deloitte, the private contractor building the system, has been amended more than 30 times since the company was hired in early 2013, according to state officials, who continue to emphasize they’re satisfied with Deloitte’s work on the project.Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes The Saturday Morning Post and hosts Executive Suite. Follow him on Twitter, Facebook and InstagramSusan Campbell contributed to this report.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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