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TennCare updates multiple vendor agreements including OptumRx timing change and KPMG extension
Summary
TennCare presented several procurement updates: a 15-month term modification for OptumRx to shift the contract cycle and avoid January 1 federal-pharmacy changes (maximum liability just under $21 million, state share ~ $10.5 million), an expected final extension for KPMG consulting on Medicaid modernization, and several renewals and amendments (CAQH, Equifax, Kepro, Mercer, NTT DATA); the committee approved all items.
The Fiscal Review committee reviewed a package of TennCare contract actions that the agency said are intended to align operational cycles and finalize outstanding extensions.
Zane Sills, chief financial officer for the division of TennCare, outlined multiple items. He described a request to amend the OptumRx pharmacy benefit administrator contract to add an extra three months to an option year (making a 15-month window) so TennCare can move the contract cycle away from January 1 — a day when many federal pharmacy changes take effect — to an April–March cycle. Mr. Sills said the “maximum liability request is a little less than 21,000,000. State share is… a little less than 10,500,000.”
TennCare also sought a final extension of KPMG’s consulting contract for Medicaid modernization, a renewed sole-source relationship with CAQH for provider data validation, renewals with Equifax, an amendment for Mercer to reset pharmacy professional-dispensing fees (a periodic, once-every-three-years process) and continued work with Kepro and NTT DATA. Agency staff said IT spending peaked in the previous fiscal year and is projected to decline through FY29.
All TennCare items in this package were approved by committee voice votes. Members asked clarifying questions about timing, the rationale for the OptumRx cycle change and the periodic nature of some consulting and pricing work.
What’s next: TennCare will implement the OptumRx timing change, proceed with the vendor renewals and continue the planned reprocurement activities described for consulting and IT contracts.
