Govt resuscitates Medicare legacy payments system with another $37m

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Govt resuscitates Medicare legacy payments system with another $37m

MYEFO: And prepares to restart apprenticeship IT system overhaul.

The federal government will spend almost $37 million continuing to shore up the country’s legacy Medicare payments system after dumping plans for a new bespoke platform last year.

Services Australia will use the new funding for “essential” maintenance of the 30-year-old system, the government said in its 2019-20 mid-year economic and fiscal outlook (MYEFO) today.

The funding, which includes $12.8 million in capital over the next two years, will also be used to ensure that the IT platform continues to be owned and operated by the government.

The ageing mainframe platform, officially known as the health and aged care payments system, is used to deliver $50 billion in Medicare, Pharmaceutical Benefits Scheme, veterans and aged care payments every year.

The system, which has been built-up over the last three decades, currently consists of 200 separate applications and 90 different databases.

But with the system expected to reach end -of-life at the end of next year, the government had proposed replacing the legacy system with an off-the-shelf digital payments platform.

The move followed the government abandoning plans to outsource Medicare payment processing in the wake of the so-called ‘Mediscare’ campaign in the run-up to the 2016 federal election.

The existing system had also become temperamental, with the number of outages and technical problems increasing year-on-year when last reviewed by the Australian National Audit Office.

However, despite pouring more than $170 million into the procurement, iTnews last year revealed the government had decide not to go down the path of a new platform.

While providing limited reasoning at the time, a Department of Health spokesperson said the existing system would instead continue to be improved, building on work that began following the allocation of $17 million in the 2017 MYEFO.

This would involve transitioning the payments system to “converged environments”, and “moving from older software to common, supported software” and “upgrading databases to the most current version”.

In addition to new funding for the Medicare payments system, the department will receive an additional $21.9 million this year to “support the operating costs of the My Aged Care system”.

Back from the dead

The government has also provided $2.2 million to restart the program to replace Australia’s 16-year-old Training and Youth Internet Management System (TYIMS) after its last attempt failed.

The newly created Department of Employment, Skills and Small and Family Business will use the new funding to “develop a second pass business case” to replace the system.

The current Department of Education and Training began developing a first pass business case for the work last year after it pulled the plug on its $20 million national apprenticeship management system (AAMS) after a series of delays that first began in July 2016.

The decision followed a PwC review that found evidence of significant governance concerns throughout project’s life, including around contract management and stakeholder engagement.

The report declared the system “not fit for purpose" and said it would not "realise the benefits as intended in the business case”, largely because of a lack of end user consultation.

The government expects the new system will result in “faster transactions and improved government service delivery for employers and apprentices”.

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