Dive Brief:
- Xerox announced it will post a $385 million pre-tax charge in its third quarter for delaying implementation of its new Medicaid payment systems in Montana and California.
- Montana state officials and Xerox had negotiated a new deadline of May 2017 for project completion, two years past the original deadline. Another report issued in July predicted the project could take until 2023, although Xerox said its review of the report found the methodology flawed.
- The company said it remained committed to implementing its Health Enterprise platform to other states and it will still process claims in the 35 states currently using its platform to avoid any interruptions in service.
Dive Insight:
Montana's chief information officer, Ron Baldwin, said in a statement, "Montana is engaged in intense negotiations with Xerox to ensure that Montana taxpayers receive a state-of-the-art system, don't pay for any services not delivered, and are fairly compensated for any delays."
Xerox will report third quarter results on Oct. 26 and still expects adjusted earnings, excluding the pre-tax charge, between 22 and 24 cents per share. Overall, its shares are down 16% over the past year.
According to MarketWatch, this will be the company's first quarter posting a loss since 2010.