On the Way to 1 Billion – Accenture nears $250 Million in Healthcare.gov Related Contracts

In our blog published on February 18th regarding Accenture taking over the development and support for Healthcare.gov, UpperEdge predicted that the contract would ultimately net Accenture at least a billion dollars in revenue over a 3 to 4 year period. The revenue will likely be generated through three channels:

• Ongoing support for the Healthcare.gov site
• Additional contracts with CMS unrelated to Healthcare.gov
• Residual business with states and commercial clients related to Accenture’s knowledge of the Healthcare.gov website.

Recently CMS has extended Accenture’s maintenance contract for Healthcare.gov by 6 months. While the value of this contract extension has not yet been disclosed, it is reasonable to assume that it will at least equal the value of the two previous 6 month contracts that were valued at 45 million dollars each. This would put the total for item 1 at $135 million.

Accenture has also been assigned 7 additional contracts with CMS totaling a value of over $100 million dollars. All of these contracts are related to improvements in the Healthcare.gov system.

This brings Accenture total take to approximately $235 million in only the first 8 months of the relationship with CMS. Considering the 2013 billings of a mere $5,000 dollars, this has certainly been a pretty good gig for Accenture.  With Accenture set to report on fiscal 2014 year end results next Wednesday, we will keep our ears open to the growth in Accenture Health and Human Services revenue stream to determine if our predictions for growth in this sector also materialize.

Let’s hope that CMS got a good deal with Accenture on rates because Accenture is clearly on track to pull down the billion dollars we predicted.