After penning an alliance with CHOICE Administrators Exchange Solutions for delivering a cloud-based Health Insurance Exchange (HIX) solution, office automation and equipments major Xerox Corporation (XRX) is in the news again.
The company is going to renew its relationship with New Mexico’s Human Services Department for running and upgrading the state’s health care delivery mechanism to Medicaid recipients.
The contract awarded to Xerox is worth $105 million and is slated to run for a period of 58 months. In addition, the contract has three renewal options of one year each. The contract renewal does not come as a surprise since Xerox has managed New Mexico’s Medicaid services for almost two decades.
Under the refreshed terms, the company will not only continue its management of the state’s Medicaid Management Information System (:MMIS), but also work towards upgrading it. Last year, Xerox had processed 23 million claims while managing $3.5 billion in Medicaid payments.
The new deal will also help Medicaid recipients to have increased participation in the program as the Medicaid Web portal will be revamped. Users will be able to analyze their eligibility data along with placing requests for replacement identity cards and look for providers within a hundred mile radius from their addresses or ZIP codes. This will certainly be a welcome change for recipients as they currently do not have access to such features.
Moreover, the upgraded portal will enable real-time processing of claims as health care providers will be able to submit enrollment applications online. This will eliminate the pile up of enrollment forms and streamline the entire process. Also, health care providers will come to know whether the claim has been approved for payment instantaneously.
Xerox is focused on bringing innovation in the health care sector and currently administers Medicaid systems for another 11 states along with the District of Columbia and the U.S. Department of Labor. The company processes over 570 million Medicaid claims and handles $50 billion in payments every year.
Xerox, which competes with Canon, Inc. (CAJ) and Hewlett-Packard Company (HPQ), maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. Currently, we have a long-term Neutral recommendation on the shares of Xerox.
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