Procurement is emerging as one of the public sector’s biggest stories of the year. A central motivation behind the creation of 18F, this desire to transform how government buys things is spawning portals and experiments in cities nationwide. And instatement of the Affordable Care Act bolstered a tech marketplace that states are feeding as they fulfill requirements for Medicaid systems, an annual federal investment that exceeds $5 billion and serves 71 million Americans.
In recognition of federal and state procurement’s complexity and limited vendor pool, the Centers for Medicare and Medicaid Services (CMS) changed its course in January with the launch of a State Medicaid IT Procurement Opportunities portal.
This portal was the first step in what was revealed last month to be a comprehensive overhaul of how one chunk of federal government manages private-sector vendors and governs large state technology projects. The agency’s new trajectory aligns government’s mainsail with the same star followed by the innovators in 18F, who advocate for modern practices like iterative development and open cooperation with a diverse vendor community.
The agency’s new approach has several key components:
The purpose of all these efforts, said Jessica Kahn, director of the Data and Systems Groups (DSG) in the Center for Medicaid and Children's Health Insurance Program (CHIP) Services at CMS, is to create new opportunities for government through increased cooperation with the private sector.
CMS Acting Administrator Andy Slavitt wrote in a more recent blog that there’s “apprehension by … IT companies” of all sizes to bid on government contracts. And likewise, Kahn said, government is sometimes apprehensive to enter relations with companies lacking big name recognition.
“Anytime government, federal or state, is doing a large IT project with public funding, there’s always a heightened sense of accountability and a desire to engage with partners that are going to be less risky and have a greater likelihood of success,” Kahn said. “For better or for worse, that often is attributed to vendors that are well known, and we do this as consumers in our own life. If you’re picking a certain contractor for your house, you ask [people you know]. Very few people just go through the Yellow Pages and pick a name. People like to have a referral, they like to have some level of confidence that somebody else has had success with that provider. … We’re just trying to introduce additional avenues into the marketplace so states have greater choices.”
So far, Kahn estimated that the portal is succeeding in its goal of providing state projects with greater exposure to the vendor community. States don’t share information about the inquiries they receive until it’s time to award contracts, she explained, but anecdotal evidence suggests the portal is working to some degree. And states are pitching in with new efforts, too, she said.
“South Carolina held a vendor conference to talk about what their strategies are going to be for a bunch of upcoming opportunities in their Medicaid IT space and they did have a lot of new companies come to that pre-bidders conference,” she said. “Whether or not they’ll all submit a bid is to be seen, but they did report to me that they had some people there that they’ve never engaged with before.”
The CMS playbook, now under development, will attempt to flatten the learning curve that bars some uninitiated vendors from joining the fray, said Kahn.
“In the case of state Medicaid IT, there’s also a need for new companies to understand the role of the federal government,” she explained. “How do we fund it, where do we have approval authority or not, what are the things that states are really looking for, what are the things that raise concerns to the states? It’s like an insider’s guide to decoding state Medicaid IT procurement and the companies that have been engaged in this space for a long time know all this information, but a newer tech partner may not.”
In addition to additional exposure and new partnerships, CMS is also encouraging an ecosystem that supports iterative development. Government agencies sometimes complain that they’re unable to adopt new practices, like iterative software and systems development, because today’s procurement structures and laws don’t practically allow it. In the case of a Medicaid provider enrollment system, for instance, states must procure systems that have been certified to meet certain standards if they want to maximize federal funds matching. But CMS doesn’t want states to procure a giant monolithic system, Kahn said – they want states to procure piecemeal, and so they’re allowing vendors to certify their software that way.
Vendors will be allowed to have software modules “pre-certified,” and those modules will be listed on Medicaid.gov for states to choose from, like tapas, as they round out their systems.
“A state still has to take that and integrate it into their state platform in order to get it certified, but at least they know it meets the functional criteria, and what's left is interoperability and integration, but they don’t have to worry about if the darn thing [can] enroll a provider because we’ve already verified that, so it gets them a little bit of the way toward the confidence [they’re looking for],” Kahn said. “Ultimately, it would be great to have a really robust list with many choices of pre-certified modules so that states might be able to certify and streamline their procurement processes by pointing toward that list or giving greater weight for software that’s on that list, but we’re still a ways away from that. We have to have a good robust set of choices first.”
An entrepreneur-in-residence position, for which CMS is now interviewing, will serve for 13 months assisting the agency in understanding which information vendors need to know and what’s preventing them from engaging government. CMS received 60 applications, and another 40 applicants are in the process of applying, said Kahn.
“It’s just great for us as long-time federal bureaucrats to see such interest in coming and working with us,” she said. “It’s pretty encouraging in terms of that partnership. … Generally it’s the rule of federal government in this space is to lead the way, but we don’t want to assume that we have all the answers. And so we really want to encourage people to work with us to make sure that it is a mutually beneficial process for the vendor community, the states and the beneficiaries.”