Outsourcer Electronic Data Systems said it won a $170 million contract to provide a range of tech services to the state of Tennessee's Medicaid system.

Under the four-year addition to an existing arrangement, the Hewlett-Packard subsidiary will upgrade the computer hardware and software that supports Tennessee's TennCare Health Management Information System. EDS will also implement a business intelligence system that will allow state administrators to better analyze and interpret data from the system.

Additionally, EDS will continue to provide Tennessee's Medicaid department with system management, maintenance, and enhancement services. It will also offer support for mailroom, scanning, data entry, and indexing functions.

"We are pleased to continue our partnership with EDS," said TennCare director Darin Gordon, in a statement. "We look forward to our continued working relationship and the implementation of enhanced computer systems and improved business practices," said Gordon.

Many states are looking to upgrade the IT infrastructure behind their healthcare systems in in response to President Obama's statement that all health records should be digitized by 2014. The healthcare reform bill presently before Congress also calls on the healthcare industry to adopt more efficient IT systems and processes to cut costs and improve patient care.

"Tennessee's healthcare leaders deserve credit for recognizing the power of technology to help the state reach its long-term health goals," said Barbara Anderson, EDS' VP for State Health and Human Services, in a statement.

HP acquired EDS last year for $14 billion in an effort to broaden its footprint in IT and business outsourcing services.

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