Alaska settles complaint over Medicaid payment system

    JUNEAU, Alaska (AP) — The state has reached a settlement over its problem-plagued Medicaid payment system, agreeing to pay the vendor hired to implement the system $25.9 million it is owed, provided certain terms are met.

    State health department spokeswoman Sarana Schell says the department received thousands of hours of work it won't have to pay for and says the vendor, Xerox State Healthcare LLC, assigned new management to the project.

    Xerox is to provide $1.5 million in hardware system upgrades, among other things.

    Payment of some of the money owed by the state will be linked to the fulfillment of settlement terms or department approval of work.

    The state filed an administrative complaint against Xerox in 2014, following the system's rocky rollout. In an interview last month, deputy health commissioner Jon Sherwood said the system has improved.

    The state has spent about $112 million on the system so far.

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