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Alaska health department and Xerox settle over botched Medicaid payments: 7 things to know

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Xerox State Healthcare and the Alaska Department of Health and Social Services have settled complaints concerning the management of Medicaid claims, the Alaska Dispatch News reports.

Here's what you should know.

1. The state filed a complaint in 2014 against Xerox claiming it had failed to issue timely and accurate payments to the state provider.

2. In the settlement, the state will continue to pay Xerox millions of dollars, but the company will provide several hours of free work "to drop some prior charges."

The company will perform performance reports and provide hardware system upgrades as part of the settlement.

3. State Deputy Commissioner Joe Sherwood said the claim will create the "efficient, accurate system," the state desired.

4. The state was originally seeking $46.7 million in damages. Xerox filed a counterclaim alleging the state owed it money.

The state paid the $26 million it owed, and through the settlement, the state will not have to pay for nearly 100,000 hours of work from Xerox.

5. In total, Alaska as paid $112 million for Xerox's Medicaid system.

The health department expects to pay Xerox the original contracted amount of $124.7 million. The contract also has three one-year extension options for $15 million each.

6. Xerox claims it has received federal certification for 32 state Medicaid programs, but has had large-scale issues in Texas, Montana and California.

Texas terminated its contract with Xerox, and Xerox ended its development of programs for Montana and California.

7. Xerox's Alaska system has 167 defects. 69 of them affect payments.

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