Things got so bad with Northrop Grumman that TennCare hired an outside accounting firm a few months ago to come in and audit the contract. KPMG – which was paid $1 million for its help – told the state it might be a good idea to part ways.A year after a contractor failed to deliver a new computer system to TennCare, the agency is starting over. Northrop Grumman won the $35 million project three years ago but has never brought online the new system for determining who is eligible for health benefits.
A statement from TennCare says the two parties have “mutually decided” to split. Northrop Grumman was only paid $4.6 million for its incomplete work, and 90 percent of that money came from the federal government.
TennCare has not laid out a timeline for hiring a new contractor to build an eligibility system, but agency leaders have suggested it will cost a lot more than $35 million. Until then, the state will continue to process TennCare applications through the federal health insurance marketplace website.