Monday, March 28, 2016

Medicaid IT Modernization

The McKinsey Quarterly “IT-enabled business trends” article discusses healthcare IT systems and opportunities to substantially improve the quality and reach of services to aging populations. I gravitated to this particular example because this summer, I will be interning with a consulting firm which support CMS in healthcare related IT contracts. At a time where there is palpable healthcare-related fatigue in Washington, technological innovation is facilitating ground-breaking ways for public providers to “do more with less” by advancing budget and resource management. While there are still many kinks to be worked out, Medicaid IT is one such promising area. As CMS Chief Andy Slavitt recently declared, “investing in the future of Medicaid is one of the single best opportunities in the healthcare sector.”1
Celebrating its fiftieth anniversary last year, Medicaid and CHIP coverage provides insurance to almost 72 million people across the country. Currently, CMS invests $5 billion in Medicaid IT for states, which facilitates the ability for states to align their technological infrastructure with providers’ and beneficiaries’ needs.2 The agency has openly pushed for private companies and start-ups to invest in the IT space in 2016, as over 30 states redesign their Medicaid claims processing and informational retrieval systems.3 CMS has set up program resources on its website, connecting technology companies with states to resolve IT Requests for Proposals.
CMS also recently passed a 90/10 rule in late 2015, which provides 90 percent of the cost for states to upgrade their enrollment IT systems (for Medicaid and CHIP) and 75% of the cost to operational costs associated with these programs. Beyond the large increase in funding, perhaps the more significant part of this policy is the encouragement of modular implementation, which replaces segments of information systems rather than the whole thing at once. While some vendors have been reluctant to adopt the modular approach, some states, like Arkansas, have had success in implementing a data warehouse system and a pharmacy IT system before moving to upgrading the core MMIS. As James Joyce of Cognosante Health Consulting states, “the idea is to do one at a time, and don’t try to bite off the whole thing at once. More states are doing that and that model is much more successful.”4
As defined by the article, these are the kinds of partnerships that provide a fruitful opportunity for transformation enabled by IT innovation. While IT modernization will always operate at a slower pace in the government sector, developing these kinds of solutions and policies can go a long way toward meeting the needs of public programs.


1. "What CMS chief Andy Slavitt said at J.P. Morgan.” Government Health IT Blog.
2. Andy Slavitt. “Encouraging Investment in Medicaid Information Technology.” Official CMS BlogJanuary 11, 2016.
3. Ibid.
4. David Raths. “Medicaid IT Systems: The Perfect Storm.” Government Tech. April 7 2015.

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