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Committee approves Deloitte extension for TennCare Connect, agency plans competitive RFP
Summary
The Fiscal Review Committee approved a 12-month extension and a substantial increase to the Deloitte contract that runs TennCare’s eligibility system, and TennCare said it plans to release a competitive reprocurement around Thanksgiving.
The Fiscal Review Committee approved an amendment extending TennCare’s contract with Deloitte Consulting for one year and increasing the contract’s maximum liability by about $152 million. TennCare told the committee it expects the state share to be roughly $28 million with the remainder matched by federal funds.
The amendment covers the system that manages eligibility and ongoing enrollment for TennCare, known as TennCare Connect. Zane Sills, chief financial officer for the Division of TennCare, said the system was launched in 2019 and remained in operation during the federal public health emergency; the agency credited the system with helping avoid large operational pauses and with unwinding elevated enrollment levels.
“We strongly believe this system is well positioned to handle anything that comes,” Sills said, noting the system’s design and ownership by the state. He told members the state owns the system and that the contract is structured so another vendor could operate it if TennCare reprocures the work.
Committee members pressed the agency about the size and trajectory of the contract. Several members noted that the original maximum liability set at contract start (about $129 million) had grown over many years as option years were exercised and as the system moved from requirements gathering into active build and operations. Judge Yarbrough asked how long the contract has been in place; TennCare said the current contract is entering its 11th year.
TennCare said it delayed reprocurement during the three-year federal public health emergency to avoid disrupting the work of unwinding elevated enrollment, and that it expects to issue a competitive RFP around Thanksgiving. The department emphasized that the system was built so ownership remains with Tennessee and that multiple vendors should be able to bid when the RFP is released.
The committee approved the amendment by voice vote. Commissioner and committee members asked TennCare to return with procurement updates and to pursue a competitive solicitation this fall.
