The Role of IT in Running an Effective Medicaid Program

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The Role of IT in Running an Effective Medicaid
Program

• William D. Hayes, Ph.D., President
• whayes_at_healthpolicyohio.org
• Health Policy Institute of Ohio
• http//www.healthpolicyohio.org
• 37 W Broad Street, Suite 350
• Columbus, OH 43235
• 614-224-4950
• September 8, 2005

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Medicaid Functions in a Highly Flawed U.S. Health
Care Delivery System

• Per the Leapfrog Group, the quality of the U.S.
  health system is equal to how well the airline
  industry handles baggage versus the safety
  record for flying planes
• Per researchers at Rand Corporation, providers
  follow best practices on average 54 of the time
• Per Midwest Business Group on Health, 30 of U.S.
  health spending adds no value or creates negative
  value (overuse, not enough use, or misuse)

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Medicaid as Four Different Types of Health
Insurance Plans

• Medicaid consists of 4 types of health insurance
  plans, with differing eligibility requirements,
  provider systems, and delivery approaches
• High risk pool (even for higher income families)
• Regular health insurance plan, especially for
  children and some of their parents
• Long term care plan (even for middle income
  families)
• Largest Medicare Supplemental plan

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Medicaid Delivery System Realities in Ohio

• Two delivery systems for acute care services
• fee-for-service and full risk managed care
• Over 35,000 fee-for-service providers
• Currently 5 full risk managed care plans
• Pharmacy runs through a point-of-service system
• Long term care costs account for almost 40 of
  spending, occurring either through a set of
  institutional or various community-based long
  term care providers
• Consumers get a medical care monthly showing that
  they are enrolled in the Medicaid FFS or managed
  care delivery system

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Medicaid and Private Health Plan Comparison

• Medicaid is an entitlement plan must take all
  who meet eligibility standards
• Almost 50 different mandatory or optional
  eligibility categories with different standards
• Eligibility based on some or all of the following
  criteria age, income level, asset level,
  disability status, residency, pregnancy
• Limited cost sharing options
• Typically, administratively set provider payments
• Part of Medicaid population more expensive
  sicker to cover than the general population

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Medicaid and Private Health Plan Comparison

• In Ohio, Medicaid administration involves
  management relationship with federal government,
  single state agency, other state agencies, and
  local government agency
• Medicaid programs spend, on average, around 4-5
  for all administrative functions
• Medicaid program often seen as liability, cost
  center versus a profit center
• Administrative appeals process typically favors
  the consumer, especially on clinically-based
  actions
• Public rule making process for all program
  changes
• Population-based orientation

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Critical Operational Processes for the Medicaid
Health Plans

• Medicaids operational needs similar to private
  plans. These needs include
• Eligibility determination and notification
• Provider enrollment and relations
• Consumer education and relations
• Claims payment
• Fraud detection and investigation
• Outcomes monitoring and evaluation
• Contract procurement and management
• Coordination of benefits (Medicaid to be payor of
  last resort)

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Critical Operational Processes, continued

• Account reconciliation with federal government
• Budget forecasting
• Value purchasing, including support for move to
  pay for performance
• Consumer cost sharing
• Public health system surveillance and tracking
• Health outcomes improvement
• Information system maintenance, development, and
  integration
• Health system research
• Ability to answer program questions in timely
  fashion
• Audits from federal and state oversight bodies

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How Medicaid Match Works with IT

• Medicaid program runs on state funds combined
  with federal matching funds
• IT efforts currently get an attractive match,
  often at 90 or 75 for development. (The match
  is usually 50 for regular operations)
• Current federal government proposals, especially
  setting a block grant on administrative
  expenditures, could hurt IT investment
• Often Medicaid can support IT efforts of other
  state agencies, if effort has an effect on the
  administration of the Medicaid program (e.g.,
  immunization tracking system development)

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Medicaid Administration Challenges IT

• How to keep slow the rate of ongoing cost growth,
  preferably to at or below average cost of state
  revenue growth (4 a year)
• How to coordinate eligibility, services, and
  information sharing across mixture of federal,
  state and local agencies, each with aspects of
  management responsibility and power
• How to foster effective emphasis on IT
  enhancement within existing state government
  structures and processes
• How to make sure that policy makers consider
  realities of implementation when making decisions

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Office of Ohio Health Plans the need for
change
CRIS-e

• OHP runs Ohios Medicaid program and is
• 6th largest public health care purchaser
  nationally
• 33 state expenditures
• 76 Ohio Department of Job and Family Services
  expenditures
• 12 billion in SFY 2004
• Value Purchaser covering
• 1 in 3 births children
• 1 in 4 seniors over the age of 85 years
• 75 of long term care costs
• 3rd oldest legacy system in the country
• Build by SMEs served OHP well in the past
• MISs largest customer

1.8M members 94 CRIS-e cases 96 Delink
MMIS
65M claims 30 Rx, 25 Tape, 10 Paper 42 OHP -
Operations
Financial
12B OHP
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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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Business Drivers

• Change Realities
• Legacy system, hard code
• Slow, inflexible costly
• Control-D Reporting
• Work-around mindset
• Limited automation projects
• Project Results
• HIPAA 3 yrs 30M
• TPL 6 yrs, pay chase
• Buy-In 13 yrs, huge county problems
• CRISe De-link 8 yrs
• Request backlog - 350

• Business Pressures
• Regulatory Demands
• Rapid Change
• Demand Growth
• Cost Containment
• Legislative Commissions Recommendations
• Audits Oversight
• Workforce Changes

PACMAN of State budget. - Governor

• Technology
• Antiqued technology
• Multiple core systems
• Numerous stand-alone, non-integrated systems
• Lack of management data, data integrity,
  privacy/security protections

• People
• OHP functional silos
• IT Medicaid IS legacy system staffing, lack
  customer service focus
• Reactivecrisis oriented
• Task, not analysis, oriented
• Limited skill sets-COBOL

• Process
• Manual, work-arounds, re-work
• Policy without implementation
• Paper, Paper, Paper
• Limited business case, impact analysis,
  prioritization, governance

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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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Strategic Change ?requires Technology Change
As Medicaid agencies move from a regulator to
value purchaser of quality services for health
plan enrollees, they must fundamentally shift
their design, management, technology
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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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Enterprise ArchitectureE-Gov Federal CIO Council
The value of IT is best measured by the
contribution IT makes towards achieving agency
business goals and business objectives. - ODAS
ITP-D.4
Business Governance roles, decision making
process
Business Architecture Business Reference Model
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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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CMS Medicaid IT Architecture Enterprise Business
Needs Enterprise Architecture

• Increasing Costs
• Increasing Needs
• Obsolete Systems
• Emphasis on Business Benefit

Medicaid Information Technology Architecture

• Rate of Change Increasing
• New Public Health Focus

• National Initiatives
• Focus on Beneficiaries
• Focus on Data Exchange

• Ongoing Standardization Supports Data Exchange

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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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MITS GoalsCMS selected Ohio as early adopter of
MITA
To implement business drive architecture technology that supports the business needs of the Medicaid enterprise
To streamline systems development building on the MITA business model
To implement value purchasing tools to improve performance results, health outcomes quality cost management
To improve Ohios return on investment through federal enhanced reimbursement for MITS planning, design, development implementation
Rate of Change Complexity Growth Workforce
Changes Increasing Demand Tech Rigidity Oversight,
Audit Motivation, Skills
Adopter MOU (1) Ohio Business Model, (2) MITA
Self-Assessment, (3) APD Process, (4) Hub
Architecture
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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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MITS Business Model
To Be Model
CMS MITA 6 core processes, 27 sub-processes

I. Member Management
II. Provider Contract Management
III. Payment Management
IV. Utilization Quality Management
V. Information Management VI. External Data Sharing Exchange
ODJFS MITS 11 core processes, 60 sub-processes
Project Management
Member Services - Eligibility Enrollment Benefits Service Administration
Customer Relationship Mgmt (Provider Services) 5. Contract Management
Financial Management Claims Encounters
Program Integrity? Quality Management?
Management Information Privacy Security?
Integrate LTC functions across business processes
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from 10/29/2004 OHHIT Summit presentation by
Ailene MacKay,   Ohio Medicaid Information
Technology System (MITS)Business Transformation
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MITS Business Model
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Findings Technical Gap Assessment
MITA Portfolio Description ODJFS Score ODJFS Score ODJFS Score Key MITA Scoring Rationale
Interoperability System-to-systems communications System-to-systems communications 1 Systems developed and maintained separately Point-to-point interfaces limit commonality Integration achieved through individually developed interfaces Systems developed and maintained separately Point-to-point interfaces limit commonality Integration achieved through individually developed interfaces
Data Management Medicaid enterprise-specific data Medicaid enterprise-specific data 1 Data modeling performed on a system by system basis No enterprise standardization of data affects reporting capability Data modeling performed on a system by system basis No enterprise standardization of data affects reporting capability
Data Sharing Coordination Collaborative agreements standards to enable data sharing in/outside Medicaid enterprise Collaborative agreements standards to enable data sharing in/outside Medicaid enterprise 1 Limited to point-to-point interfaces that are necessary for claims processing No data sharing being performed outside of the organization for health outcome purposes Limited to point-to-point interfaces that are necessary for claims processing No data sharing being performed outside of the organization for health outcome purposes
Security Privacy Secure private mechanisms to facilitate exchange of information among multiple organizations Secure private mechanisms to facilitate exchange of information among multiple organizations 1 Most systems have their own security and privacy design Access to each system managed and administered separately Most systems have their own security and privacy design Access to each system managed and administered separately
Adaptability Extensibility Utilities that can be tailored (adapted) added (extended) to meet state needs Utilities that can be tailored (adapted) added (extended) to meet state needs 1 Adaptability and extensibility limited to look-up tables maintained for individual systems Changes to code are hard coded and performed manually Adaptability and extensibility limited to look-up tables maintained for individual systems Changes to code are hard coded and performed manually
Performance Measurement Standard policy performance measurement capabilities Standard policy performance measurement capabilities 1 Focused primarily on claims processing measurements Data warehouse solution not optimally targeted Focused primarily on claims processing measurements Data warehouse solution not optimally targeted
Business Area Improvement Applications to improve Medicaid business processes Applications to improve Medicaid business processes 1 Business improvements primarily focused on claims processing only No transparency into claims adjudication process Business improvements primarily focused on claims processing only No transparency into claims adjudication process
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Recommendations

• Transfer MMIS
• Significant, additional capabilities
• Incorporate Info Delivery Internal Admin
  requirements
• Assess CRIS-e to Modify or Replace
• Do not delay MITS to complete assessment
• Determine Sourcing Strategy
• In-house vs. fiscal agent new system operations
• Implement Infrastructure Changes now to enable
  systems change
• People ? Process ? Technology

Very favorable business case 3.81
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What Information Needs Do People Want to be
Solved?

• To enhance effectiveness of Medicaid program for
  consumers, providers, and program staff could
  use
• Online enrollment for consumers and providers
• Online eligibility status check
• Access to electronic health information,
  especially diagnoses and prescription medication
  data
• Easier linking between eligibility and
  administrative data systems within and among
  agencies
• Improved value purchasing and fraud detection
  tools
• Better communication on practice patterns with
  providers and consumers

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The U.S. Health System is in Crisis
We have tens of millions of uninsured Americans,
significant medication errors in 7 out of every
100 inpatients, tenfold or more variation in
population based rates of important surgical
procedures, 30 overuse of advanced antibiotics,
excessive waits through our system of care, 50
or more underuse of effective and inexpensive
medications for heart attacks and immunizations
for the elderly, and declining service ratings
from patients and their families.
(Don Berwick, M.D., 2002 Escape Fire
speech) http//www.cmwf.org/usr_doc/Berwick_escap
efire_563.pdf
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