General Dynamics Wins $80 Million HHS Contract

The Department of Health and Human Services (HHS) has awarded General Dynamics an $80 million contract to implement technology for the Early Retiree Reinsurance Program (ERRP). The contract is with General Dynamics Information Technology's ViPS health IT subsidiary.

If all options are exercised during the four-year period of the agreement, General Dynamics Information Technology's Health IT Solutions sector will add more than 100 jobs as new IT workers develop and deploy the ERRP application and payment systems, as well as support all ERRP operational departments.

Under the terms of the agreement, the company is responsible for overall software design, development, and business application support. This includes a public website and educational outreach programs as well as data center infrastructure and administration.

Art Lehrer, VP and general manager of Health IT Solutions for General Dynamics Information Technology, said Thursday that IT will play an instrumental role in implementing healthcare reform legislation.

"The ERRP is a great example of how IT can support the healthcare system and represents one of the first major initiatives assigned to HHS under the new legislation," Lehrer said in a statement. Lehrer also noted that every aspect of ERRP -- including employer application processing, claim requests, reimbursement processing, data management, data security, and claims auditing -- relies on IT to ensure that sponsors of retiree health benefits receive reimbursements in a timely and cost-effective manner.

"We are proud to bring our experience providing technological and operational support from other federal healthcare programs to bear on this critical effort," Lehrer added.

Company executives also said they will provide IT technology and operational support for the Retiree Drug Subsidy (RDS) Program, which is one of several options available under Medicare that enables employers and unions to continue assisting their Medicare eligible retirees in obtaining more generous drug coverage.

The company will also support HHS' Office of Consumer Information and Insurance Oversight (OCIIO), administrator of the ERRP program.

ERRP, launched on June 1, 2010 under the Affordable Care Act, encourages the retention of employer-sponsored health benefits for early retirees, spouses, and dependents by providing accepted employers with financial relief. Employers may receive 80% reimbursement for medical claims for retirees age 55 and older who are not yet eligible for Medicare.

OCIIO was created to aid HHS implementations of healthcare reform legislation provisions and is responsible for ensuring compliance with the new insurance market rules, overseeing the new medical loss ratio rules, assisting states in reviewing insurance rates, and providing guidance and oversight for state-based insurance exchanges. It is also responsible for compiling and maintaining data for a public internet portal providing information on insurance options.