After nearly 50 years, it’s time to retire traditional MMIS procurements

There are only 51 of them in the entire country, but their reach affects millions and their impact is profound.

Cumulatively through the years, these systems have cost states billions of dollars and consumed thousands of hours of productivity. They’ve caused headaches, heartburn and sleepless nights for agency IT experts, financial executives and policy analysts alike. In the nearly four decades of their existence, scores of projects have failed or been delivered late. Dozens of contracts have been canceled, and lawsuits and finger-pointing between states and vendors have been commonplace. For those systems that have reached completion, cost overruns are frequent for projects that may already exceed hundreds of millions of dollars.

Yet, grim track-record notwithstanding, no state (or Washington D.C.) can live without access to a Medicaid Management Information System (MMIS). MMIS is the huge, powerful, transactional data-rich claims processing engine and IT foundation upon which rests the administrative and payment needs of hundreds of thousands of doctors, clinicians, technicians, pharmacists and other providers who serve millions of Medicaid beneficiaries across the country.

But it’s time for a better way. It’s time for states to buy outcomes, not systems.

Some version of MMIS has been contemplated as part of the Medicaid landscape since 1972, when Public Law 92-603 provided Federal Financial Participation (FFP) to states that developed “automated claims processing and information retrieval systems.” Most “modern” systems arrived on the scene about 30–35 years ago. But sadly — up until very recently — little has changed in the way these critical systems are bought, paid for, built and used.

In some locations — at least when adhering to “traditional” procurement methods — a new MMIS can represent the largest information technology contract in a state’s history. That traditional method generally entails a state procuring a massive, customized system in one fell swoop. Such “big-bang” implementations will likely take years to complete, and require the state to:

  • Assume huge risk
  • Buy hardware, software and services
  • Expend millions in annual maintenance costs
  • Seek bids from just a handful of vendors capable of completing such massive projects, reducing options for both competitive pricing and innovative solutions

The traditional MMIS model also forces Medicaid agencies to expend precious resources on their technology, rather than focusing on the clinical aspects of their programs and the health of citizens.

Even when traditional MMIS systems operate relatively problem-free, they can be inflexible and prohibitively expensive to maintain. They often serve as a technological straight-jacket constraining forward-looking states that dream of implementing creative and innovative health care solutions. And because IT advances occur at lightning-fast rates, when these systems become dated, states are left with two unpalatable options. They can limp along with a broken system, making “fixes” in haphazard, inefficient ways. Or they can scrap the system and begin another laborious, resource-draining process to replace it.

The time is now for states to re-think their MMIS approach. What if states could procure Medicaid services to achieve outcomes, rather than own gigantic systems? What if they could use proven commercial health care capabilities to meet their Medicaid needs? What if they could achieve unprecedented flexibility, gain exposure to new ideas, encourage competition, implement solutions faster, reduce risk and cost of ownership, and accomplish their program goals more quickly by acquiring specific services in a modular way to manage their Medicaid programs?

Now they can — and they should.

Our new white paper, “How to succeed with your MMIS procurement: Buy outcomes, not systems” offers real food for thought. Learn practical ways to approach your MMIS procurements. A sampling of suggestions includes how states can and should:

  • Share knowledge with large Medicaid health plans (MCOs) on a variety of program challenges such as supporting provider participation and realizing the power of better data integration and analytics
  • Align their MMIS requirements to commercial-off-the-shelf (COTS) capabilities to encourage new industry players to offer more robust solutions used in the broader health care market
  • Expand the definition of “qualified vendor experience” to take advantage of COTS-based solutions from vendors who have not specifically deployed them in state MMIS settings
  • Purchase Medicaid services and align deliverables based on a Software as a Service (SaaS) and Business Process as a Service (BPaaS) — or as we say, “Why build your own power plant when you can just buy the electricity?”
  • Focus on and specify in requests for proposal what they want to accomplish, not how the technology should work

There’s plenty of detail on these and many other topics in the white paper, which I think you’ll find comprehensive and enlightening. There is no longer a need for MMIS system limitations to drive program decisions, or for states to be constrained by procurement methods of the past.

It’s time to explore how Medicaid enterprises can lead the way on addressing our health care goals of the future. Read the white paper.

About the Author:

a.cone_img_1616.jpgAndrew G. Cone
Sr. Vice President, State Government Solutions

Andrew Cone leads solution and business development / strategy for Optum State Government.  His experience spans the health spectrum, including commercial, government (Medicare and Medicaid), payer, provider and pharmacy benefit services.  A graduate of Hamline University in St. Paul, Minnesota, his 30 + year career includes business and software development, service delivery, and consumer engagement.

2 thoughts on “After nearly 50 years, it’s time to retire traditional MMIS procurements

  1. Keep up the good work as you try to help state medical departments become more efficient.
    Remember to work hard but also be sure to spend quality time with your family!

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