Can States Work Together?

If Handler from Illinois is dissatisfied with the traditional MMIS procurement process, he has company in Steve Fletcher, CIO of Utah, which is currently weighing its options for MMIS replacement.

“These systems cost on average about $120 million, and that is outrageous,” Fletcher said. “Many vendors build these systems from scratch, and basically it’s mainframe technology. That’s why they get this pricey, and I think it’s the wrong way to go. If someone would offer me a transactional service so I don’t have to build it, I would be very interested.”

Fletcher also wants to look at whether states could work together on procurements, which he has begun talking with CIOs in other states about. He noted that Minnesota created an unemployment insurance system for $37 million and gave the code to Iowa, which made $3 million in adjustments and was able to use the same system. “Can we do the same thing with MMIS?” he asks.

Fletcher said he has spoken with federal CTO Aneesh Chopra and CIO Vivek Kundra about this topic. “It drives them crazy that there are 50 MMIS systems,” he said.

But Fletcher stressed that if the federal government wants states to change, it must provide different incentives to the program executives. “The CIOs get it,” he said. “But on the business side of Medicaid, they hear that the feds are going to provide a 90/10 match to do something, and that sounds pretty good to them, even though we have to pay $12 million.”

If Utah creates an MMIS with another state, the federal match would only be 50 percent, he added, so the state Medicaid business people see that as proposing something that will cost around $20 million more, even though it saves money overall. “I think the incentives have to change,” Fletcher said.

Danes from CSG Government Solutions noted that her firm is working with North Carolina, South Carolina, Tennessee and Georgia on a feasibility study for procuring a single unemployment insurance system that each state could customize. “If we can develop a set of best practices there, perhaps we can bring that over to Medicaid,” Danes said, although she added that it’s tough to work through governance and ownership issues.

Fundamental Change in Arkansas

Officials in Arkansas echo Fletcher’s cost concerns as they begin an innovative — and abbreviated — MMIS procurement process. “We expect to fundamentally change the health-care system in Arkansas, and the MMIS by definition has to be changeable and agile,” said Gene Gessow, director of the state’s Division of Medical Services. “We are not going to buy a design/build system. We can’t afford the time or the risk.”

Time is critical due to mandated changes to Medicaid, ICD-10 deadlines and the contractual end of the existing MMIS contract. The state’s MMIS procurement strategy calls for an ambitious one-year development cycle followed by six months of testing. It expects the shorter implementation time frame will be possible because a systems integrator will create the MMIS by assembling loosely coupled “best-of-breed” modules that already exist rather than creating something from scratch. Gessow stressed that Arkansas is interested in hearing proposals from vendors new to the Medicaid environment.

State CTO Claire Bailey said that unlike some states, Arkansas does not yet have a functioning health information exchange. “But that is good in the sense that we don’t have to retrofit anything. We can look at it with fresh eyes,” she said. “We envision a common portal for the health benefits exchange, the health information exchange and the Medicaid system. We think it makes sense to use a core set of solutions for all these purposes.”

Bailey realizes that Gessow’s ideas are innovative and his timeline ambitious, but she is optimistic that it will get done. “We need the vendors to step up to the challenge of delivering this on time and on budget,” she said.

David Raths  |  contributing writer