MicroPact Blog

Medicaid Modularity Incentives Favor Configuration Over Customization

Shift Means New Roles, Opportunities for COTS Vendors and Systems Integrators

Stephanie Kuhnel's avatar

By: Stephanie Kuhnel

May 12, 2017 | Healthcare and Benefits

It’s no wonder that Medicaid is at the center of intense political debate at both the state and federal level. Pick your favorite statistic:

  • In 2015, the nation spent more than $532 billion on Medicaid, with about a 40/60 percent split between state and federal budgets.i

  • Medicaid consumes more than one-quarter of all state expenditures and accounts for 9 percent of federal domestic spending.ii

  • With this investment, Medicaid provides medical care to one fifth of the US population — more than 72 million children and adults.iii

Due to recent mandates from the Centers for Medicare and Medicaid Services (CMS), state governors and CIOs are under increasing pressure to modernize their aging Medicaid Enterprise Systems (MESs), systems that handle enrollment, eligibility, claims processing, and other functions for this huge population. They also have ample incentives do so over the next two years. 

  • A December 2015 final rule (80 FR 75817) makes permanent the CMS 90/10 matching funds already available to states to modernize their Medicaid Management Information Systems (MMISs) and broadens the incentive to include enrollment and eligibility systems (E&Es), with 75 percent matching funds for ongoing maintenance of compliant systems. 

  • A federal waiver (the A-87 Cost Allocation Exception) designed to encourage states to build integrated eligibility systems (IESs) that can be shared by multiple Health and Human Services systems is set to expire on December 31, 2018.

Turning on a Dime

The incentives are working: 30 states are in the process of redesigning their MMISs, and 37 are actively building or planning an IES. But the shift won’t be easy. The 2015 final rule specifies a modular approach to MES modernization — a 180-degree turn from directives in place since the 1970s, which effectively limited development to a handful of large players, mostly system integrators (SIs), and wrought a proliferation of monolithic, heavily customized systems. Under the updated ruleset, MES modules — loosely defined as reusable, interoperable solutions that address a set of business processes — can be incrementally certified and funded in the order that they are deployed. Alternatively, discrete business processes can be outsourced altogether. The updated Medicaid Enterprise Certification Toolkit (MECT)[iv] offers guidance based on the latest Medicaid Information Technology Architecture (MITA) 3.0[v] framework, but it’s up to each state to define those modules and outsourcing opportunities within an overall acquisition, procurement, and deployment strategy.

Adapt or Perish

CMS has been filling ballrooms and steadily pumping out guidance in the form of FAQs, bulletins, and letters to help states and vendors carry out the new mandates. In presentations around the country this year, CMS Director of Data and Systems Jessica Kahn has told stakeholders that the national Medicaid IT environment is ripe for innovative companies and that CMS is actively seeking new entrants that can adapt existing business solutions from comparable sectors.[vi]

The updated rules and incentives have opened the door for states to seek out IT solutions that are more nimble and interoperable  Meanwhile, SIs are seeing their role evolve as they seek new partners to fill in critical gaps with best-of-breed COTS solutions. In an August 16, 2016, letter to state Medicaid directors, former CMS Deputy Administrator Vikki Wachino acknowledged the changing but pivotal role of the SI as follows:

CMS envisions a discrete role for the SI in each state, with specific focus on ensuring the integrity and interoperability of the Medicaid IT architecture and cohesiveness of the various modules incorporated into the Medicaid enterprise.[vii]

A Perfect Fit

Since the implementation of the 2015 ruleset, MicroPact has become a veritable poster child vendor for state CIOs and SIs:

  • Dedication to the public sector — MicroPact’s case management solutions serve 98% of U.S. states, and 97% of U.S. federal agencies with more than 500 employees, and enjoy a 97% annual renewal rate.

  • Architected for government — MicroPact’s entellitrak is a low-code application development platform for case management and business process management. Hosted on-premises or in the cloud, it offers more than 20 government-focused application accelerators – COTS solutions with best practices, business rules and terminology built right in – that speed implementation and lower costs. 

Our applications support a wide variety of Health and Human Services (HHS) related areas such as disability benefits, self-directed benefits, veteran’s benefits, vocational rehabilitation, grievance tracking and appeals, and program integrity. For example: 

  • 87% of disability determination agencies in the United States use MicroPact’s Disability Case Manager software to process disability claims, including the nation's fourth largest federally funded entitlement program.

  • At the CMS Office of Medicare Hearings and Appeals (OMHA) entellitrak manages Level 2 and 3 hearings and appeals.

  • entellitrak tracks and manages the independent medical and billing reviews of California’s Workers’ Compensation claims – 400,000 cases per year.

  • The California Department of Social Services recently selected a MicroPact Global Alliance partner to implement an entellitrak-based Appeals Case Management System (ACMS) for its statewide Hearings Division.

  • The Wisconsin Department of Health Services uses entellitrak to administer its enterprise Medicaid self-directed services.

  • More than a dozen offices of inspectors general use entellitrak to manage investigations into fraud, waste, abuse, and program integrity matters.

  • MicroPact human capital grievance tracking solutions are used throughout the public sector to manage employee and labor relations, reasonable accommodation, and civil rights cases — including 90% of federal EEO claims.

Let’s Get Moving

As MicroPact’s track record alone shows, COTS, modular, agile approaches are time tested in government, and within HHS in particular. With barriers to Medicaid modernization finally behind us, let’s dig in together to support healthy populations as best we can, and as each state sees fit.

About the Author

Stephanie Kuhnel has over twenty years of executive leadership experience across multiple sectors, including public sector, technology, consumer goods, government, law enforcement, and education. In her current position she drives the strategic direction and fosters business development opportunities for MicroPact’s health, human services, and benefits portfolio. Stephanie has a bachelor’s degree in business administration from the University of North Carolina at Chapel Hill and an MBA from Meredith College.