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Indiana agency, IBM sue each other over $1.3B deal

Agency of Indiana, previously the partner of IBM Corporation in the past has sued IBM for almost $1.3 billion. It includes the denying of Medicaid to nun and dying patients of cancer. On the other hand IBM is asking for $52.8 million for its unresolved payments and equipment costs. The company claimed that state still has to pay for their abandoned 10 year old deal worth of almost $1.37 billion for automating the intake of food stamps, Medicaid, etc. Both parties had filed their court cases in the Marion County court of Indianapolis. According to the lawsuit filed, the Indiana Family and Social Services Administration is asking for a recovery of $437.6 million that it had paid the computer giants around 31st Jan. It also demanded for the costs for the third party cases, state employee overtime, federal penalties and much more, as a part of the deal. Under the law enforced by the state, state is looking for three types of losses whose total cost is around $1.3 billion. It blamed IBM Corporation for deliberately denying reimbursement to clients so that it can enhance its image in-front of customers for enhancing its sale.

It also blamed IBM that the company gave false and misguided information to the state agency. The state also complained about many cited cases in which IBM had hurt particular individuals by its poor work services. It explained that a dying patient of cancer was denied from the benefits of Medicaid because she had missed an interview of recertification in spite of informing the IBM guided call center that she was in hospital and so could not attempt the interview of rectification. Later on, it was due to this reason that she failed to see her food stamps. Similarly the nun wanted to reorganize the interview due to its participation at some holiday. Nun tried hard to call at least six times to the IBM call centre but they did not reply it in a well manner. Lawsuit said that nun had also sent them a fax but they did not respond to it on time. The lawsuit also said that the performance of IBM was poor from the very first day and it is very much clear from their activities that IBM had failed in obeying the terms and conditions of this agreement with state agency.

On the other hand, Clint Roswell, spokesman of IBM, stated that all the allegations of state agency are unfounded and its behavior was not good. He also stated that this project had failed due to lack of cooperation from FSSA when they refused the economic downturn in March, 2007. He also confirmed that state had ensured lots of things before starting of this project like the economic stability and many others but they could not maintain such issues. So both the parties were accused to each other for their activities and did not want to settle it.

Law suit in between IBM the computer giant and Indiana state

Indiana states entrusted IBM (International Business Machines Inc) to act as a private partner to start its welfare eligibility system. This system included a program to pay medical bills for low income families which is also known as Medicaid. In addition, the state agency also coupled with food stamp system that also supports the low income earning families to buy a monthly allowance and to support their daily consumption needs, known as the dole. Indiana state intended in awarding this contract to improve its out dated social welfare system which included Medicaid, food stamps and other benefits. This contract was in the tune of $1.37bn over a period of 10 years to automate the welfare system.

The contracting parties fell apart due to poor performance from both parties. The first party became strong when the welfare private partner ‘IBM’ denied payment for a nun and cancer patient. According to IBM, the cancer patient has not responded to a rectification interview but has informed the IBM call centre about the hospitalization. IBM has tried to contact nun through its call centre but were unable to do so. The nun tried rescheduling the interview but she just managed to send a fax. Yet the IBM ignored both these attempts of the lady.

Therefore highlighting these events the state has sued IBM to recover $437.6 as cost incurred in third party law suits; federal penalties and over time payment made to employees due to the contract. In return IBM has counter sued the state agency FSSA for $83.4 million as cancellation penalties under the contract terms, which denied by the FSSA that as IBM has intentionally denied welfare benefits citing the above mentioned two cases. Law suits by both parties were filed in Marian County courts in Indianapolis.

Finally, the Indiana state has improved their outdated welfare system by calling a private partner to participate in performing various duties. IBM, through its ineffective calling system has damaged the image of the state of Indiana in performing its welfare system to people who get a little income or having fewer resources. This has resulted Indiana state to face third party law suits and litigation from the state run organizations. In this respect, they had to go before the budget committee. Now, Indiana state has introduced a new hybrid system by replacing the call centers and documents imaging system by face-to-face contact with local case workers and automated data base management. In doing so the Indiana state hopes to expand this system to serve 10 southwestern Indiana counties this year. During the next coming year they intend to cover the remaining 49 counties and they are actually working hard on it and will surely do according to their plans.

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Call Now: +1 833-522-1003
Call Now: +1 833-522-1003