Health starts briefing vendors on new Medicare IT

Officials from the Department of Health are set to meet with IT industry representatives in Sydney and Melbourne this week, as they prepare to take bids for the right to build Australia’s new Medicare payments engine.

The agency will partner with a third party systems integrator to build the new IT system, after plans to fully outsource the end-to-end process of calculating and paying health rebates to a bank, telco or other organisation were officially canned during the 2015 election campaign.

The Turnbull government was forced to turn its back on a proposal to privatise the rebate processing work after a major public backlash threatened to derail its re-election prospects in July.

It had been tentatively taking market proposals from potential outsourcers, including Australia Post, since August 2014.

Health will now embark on a much more run-of-the-mill procurement process to hire an IT company that will build a replacement for the legacy Medicare technology, which it will go on to run and maintain internally.

Local systems integrators are being invited to sign up to one of two meetings with officials to help them “understand the department’s requirements” ahead of a request for tenders hitting the market early this year.

The government is also looking to help vendors link up with each other with an eye to building consortia or “potential teaming arrangements” to respond to the upcoming RFT.

The first meeting will take place in Melbourne on Wednesday morning and the second in Sydney on Thursday afternoon.

Vendor representatives have until the end of today to register.

Medicare rebates are currently processed by a 30-year-old IT system which is estimated to remain usable for four more years at best.

The cost of replacing the system is estimated to be comparable but somewhat less that the $1.5 billion Centrelink systems replacement taking place in parallel.