Texas Health Database Project Delayed by Cost Concerns

September 30, 2014

Plans for a massive health database have been postponed again after Texas health officials cited cost concerns, as well as the possibility that the company that won the tentative contract was receiving inside information from a state negotiator.

The Health and Human Services Commission has further delayed the decades-old plan by ending negotiations this month with Truven Health Analytics of Ann Arbor, Michigan, the Houston Chronicle reported.

The “enterprise data warehouse” project is expected to be rebid, a process that could take months and cost the state tens of thousands of dollars in staff time.

Truven issued a statement Wednesday denying any improprieties during the procurement process.

“We were awarded the contract after an extensive bidding process and we adhered to the highest ethical standards throughout the entire process,” the statement said. “We remain committed to the state of Texas and helping modernize the Medicaid data system and deliver significant savings each year.”

The commission runs the state’s Medicaid program, foster-care system and other services. The project was originally funded in 2007 to create a massive database that would allow officials to save money by comparing figures. Truven tentatively won the contract in June and the commission included a specific $78.03 million request for the project in a biennial budget proposal it submitted in August.

HHSC Executive Commissioner Kyle Janek said it will rebid the project because there isn’t enough money to fund Truven’s proposal.

“Here’s the simple truth,” Janek said. “The Legislature has not given me enough money to cover that potential contract.”

He also expressed concerns that Truven officials gained knowledge of a closed-door commission meeting aimed at reducing their price for the project. But a spokeswoman for the Health and Human Services Commission said Wednesday that officials are examining possible ethical concerns on the part of a state negotiator who may have divulged privileged information, not Truven.

“Nobody in that room should have taken that conversation out of there and called the vendor,” Janek said. “Somebody in the agency was way too cozy with a vendor, and I cannot sit still for that.”

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