The way from here: The collaborative future of MMIS procurement

As states move forward with plans to overhaul aging Medicaid Enterprise Systems (MES), collaboration is only going to increase in importance. That’s why organizations like the National Association of State Procurement Officers (NASPO) are working to streamline Medicaid Management Information System (MMIS) procurement. In NASPO’s case, they’re harnessing resources from multiple states to create cooperative agreements in their ValuePoint program.

NASPO ValuePoint: Creating continuity and collaboration
ValuePoint is a cooperative purchasing program NASPO has offered since 1992. Here’s an overview of how it works:

  • A state raises a procurement need to ValuePoint, which surveys other states for interest and designates a project lead state.
  • ValuePoint assembles sourcing teams of procurement specialists and subject matter experts from the lead state and any other interested states.
  • The sourcing teams develop RFPs, evaluate proposals, and recommend master agreement awards to a management board. In the case of MMIS modules, the Centers for Medicare and Medicaid (CMS) reviews and approves the master agreement since they’re a significant funder of Medicaid technology for states.
  • Once a master agreement is awarded, it’s available to all states. Individual states can create contract addendums to meet their specific needs. But the core of the agreement’s terms and conditions remain the same for all participating states.

Cooperative government contracting isn’t new or uncommon. According to NASPO’s 2018 Survey of State Procurement Practices, 100% of responding jurisdictions (48 states and the District of Columbia) purchased from NASPO ValuePoint contracts. That’s a 28% increase from 2015. What is new is that NASPO ValuePoint now offers a nationwide contract for an MMIS provider services module.

In 2018, CMS approved master agreements for the provider services module. This allows six pre-certified vendors, including Optum, to market it to states. Like all MMIS modules, it’s a COTS (commercial-off-the-shelf) product. So it’s built to baseline specifications and assumptions about Medicaid programs. What NASPO ValuePoint offers states is a significantly reduced procurement timeline, set pricing based on established criteria, and core functionality that’s already vetted by other states and CMS. This foundation of standards allows states and vendors to start from a shared understanding of those baseline capabilities as they talk through expectations and outline potential opportunities and customization needs. Most importantly, they minimize future surprises. As a result, states and vendors build plans together in an active, well-defined, two-way dialogue that saves time and energy, with an expressed intent to reduce change orders and implementation timelines.

Why is this important? Well, as I’ve noted in past blog posts on managing traditional MMIS and streamlining IT procurement cycles, traditional state procurement is an arduous process, particularly when enterprise-wide technologies are involved. It also requires state personnel to be prognosticators, understanding all that needs to be done, sometimes for ten years into the future before they’ve even selected a vendor! And imagine all that can be done in terms of technological innovation in a decade. It’s a big ask that requires states to assume huge risks, and focuses vendors on winning the contract, not on meeting expectations or correcting faulty assumptions. Meanwhile, neither side has an eye on the future. After all, how do you know which road to take when you don’t have time to consider what needs to change to make your MMIS more effective?

If cooperative contracting is such a game-changer for MMIS, why aren’t all states on board? Well, as anyone who’s involved in procurement knows, system change is rarely easy or fast. This is also a brand-new approach in MMIS procurement; awareness takes time to grow, particularly among time-strapped state employees who are already juggling numerous tasks and priorities.

But in spite of the hurdles, momentum for cooperative MMIS procurement continues to build. Montana, as the lead state, released a NASPO ValuePoint RFP for claims processing and a management services module. Several states have already expressed interest in participating.

Personally, I’m interested in the potential for standardization that cooperative contracting offers. If we could get to a point where 70% of contract terms and conditions were prewritten and vetted in a master agreement, I’d consider it a massive win. But while I’m excited about what NASPO ValuePoint brings to the table from a consistency standpoint, ultimately, I believe its biggest contribution to procurement lies in bringing vendors and states to the table before implementation to collaborate and define, and then work together on providing, the most efficient and cost-effective solution.

What are your thoughts on cooperative contracting in the MMIS space? Let me know in the comments.

About the author

Tom Graves

Tom Graves
Senior Vice President at Optum

Tom Graves has been involved with the federal, state, and commercial health care markets for more than 30 years. He oversees the product and market development of Optum’s Medicaid Management Information System (MMIS) solution, Optum Medicaid Management Services. With more than 20 years in the Medicaid Fee-for-service market, managed care, pharmacy, medical management and analytics, he brings broad-based industry experience to this new approach to Medicaid enterprise systems. He has also amassed experience in federal and commercial information technology, project management and engineering. He holds a B.S. in engineering and an M.B.A. in finance.

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