January 11, 2016
By Andy Slavitt, Acting Administrator (@aslavitt)
Encouraging Investment in Medicaid Information Technology
Over the last two plus years, more than 13.5 million new people gained the security of Medicaid or CHIP coverage, solidifying its role as the foundation of the nation's health system providing insurance to almost 72 million people nationally.
At the same time that we at CMS are focused on helping interested states expand coverage, we are equally focused on rapidly transforming and modernizing Medicaid coverage, focusing on the enrollment experience, access to care and the quality of care with the goal that Medicaid coverage works as well or better than any insurance program. And there is great opportunity to do this in a manner that respects and capitalizes on the ability of each state to innovate in a way that's appropriate to the needs of its local population, but also one that aligns with national goals for improving the delivery system.
This last year, we proposed rules to modernize how Medicaid managed care works, how states and CMS ensure access to care, and are working state by state on their plans to improve incentives to the delivery system for delivering care that results in better care, smarter spending and healthier people. And thanks to the Affordable Care Act, we now have a fully automated eligibility and enrollment process for Medicaid consumers.
Serving the Medicaid consumer better takes meaningful investment in infrastructure to help serve low-income individuals, many with less regular interactions with the health care system, coordinate care, organize long-term services and support, and ensure quality measurement and delivery system reform plans can be executed. Investing in the future of Medicaid is one of the single biggest opportunities in the health care sector.
That's why last month CMS permanently extended the 90 percent federal match for investments Medicaid systems. Overall, CMS’ annual investment in state Medicaid Information Technology (IT) is more than $5 billion, enabling states to modernize their Medicaid IT systems to best meet their program, providers’ and beneficiaries’ needs. CMS and states are prepared to invest in innovative solutions.
For this investment, we expect significant advances. Our new regulations require that states evolve their legacy Medicaid IT systems to leverage reusable solutions, and to practice industry-proven IT methods such as use of modularity, reuse, shared services (including Software-as-a-Service) by fundamentally shifting the financial incentives away from custom development. This opens opportunity to smaller vendors to develop focused solutions for use across multiple states or to introduce solutions from comparable sectors such as commercial insurance or large provider systems. We believe this approach will expedite states’ IT timelines, decrease overall costs, and ignite adoption of advanced technology solutions
To help the technology community, and in particular new entrants, enter this solution space, we are not only providing the funds, we've also created a one-stop-shop set of resources to begin the work. To help the tech community connect with states looking for innovative solutions, today we are launching a new Medicaid program resource (https://www.medicaid.gov/
medicaid-chip-program- information/by-topics/data- and-systems/procurement- opportunities.html) that will help private sector companies identify opportunities to participate in this important market. On this site, vendors can easily find links to states’ Medicaid procurement websites and to any open state Medicaid IT Requests for Proposals.
Building upon the final regulation and new state procurement webpage, CMS will also be issuing a series of state guidance documents, initiating a new certification process for Medicaid system modules, and issuing a Request for Information (RFI) that will ask the broader IT vendor community how we can best position our investments coupled with states’ technology needs and break out of the same old solutions. We welcome input from industry, states, consumers, and the private sector on our vision to transform Medicaid IT.
Why should small, innovative companies and their investors be attracted to the state Medicaid IT space? As a former entrepreneur myself, I give you three reasons:
- The opportunity is big: Medicaid and the Children’s Health Insurance Program (CHIP) provide health coverage to nearly 72 million Americans, and are consistently growing as more states choose to expand coverage. With over 30 states currently redesigning their Medicaid eligibility and/or claims processing and information retrieval systems, 2016 will the most active year to date for Medicaid growth and new IT business prospects. CMS and states want to make the most of this opportunity.
- The problem-solving opportunity is exciting: The Medicaid program is undergoing tremendous change, such as a growing emphasis on managed care, offering home and community-based services to seniors and people with disabilities, and developing new models of delivery system reform to improve health outcomes while controlling costs. State Medicaid agencies are hungry for innovation and have pioneered new IT adoption. They were early adopters of Health Information Technology and have issued more than $10.2 billion in incentive payments to providers for adopted and meaningfully used electronic health records.
- There's no better mission: There's no better mission than helping families get the care they need, piloting new approaches that will serve as models for care delivery in the U.S., and building a lasting business around it.
And we are making it easy -- with access to funding and resources -- to encourage our best and brightest to be a part of this important change occurring right now. The improvements that come from this will not only provide consumers with a better experience, they will improve the fairness of our system, the efficiency of how care delivery works and the health of our nation.