In the latest unhappy meeting between government and technology, the US Department of Health and Human Services has ordered work stopped on a huge new computer system designed to make the Medicare payments system faster and more fraud-proof.
In a 15 August letter reported today by the Associated Press, the agency ordered the main contractor on the project, GTE, to "stop all work, make no further shipments, place no further orders, and terminate all subcontracts."
Estimates of spending on the project to date range from US$35 million to $90 million. At stake are billions of dollars in savings expected from heading off overpayments. Last year, Medicare estimated its overpayments at $23 billion. The new system, which was to unify 10 systems run by 72 different companies, was expected to save at least $3 billion in the next decade.
The project joins a long list of ambitious technology efforts at the federal and state level that have cost taxpayers hundreds of millions of dollars and produced little in the way of usable systems.
Topping the list: an Internal Revenue Service paperless-filing project on which the agency acknowledged squandering $400 million before giving up. Another headliner: a California system for tracking deadbeat dads. The system was supposed to cost $99 million and be online for the whole state two years ago. Now two years after deadline and at least $161 million over budget, the system now serves fewer than half the state's counties, and state officials concede that the project may never be finished.
