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The Role of IT in Running an Effective Medicaid Program

The Role of IT in Running an Effective Medicaid Program. William D. Hayes, Ph.D., President whayes@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. 1.

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The Role of IT in Running an Effective Medicaid Program

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  1. The Role of IT in Running an Effective Medicaid Program William D. Hayes, Ph.D., President whayes@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 1

  2. 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) 2

  3. 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 3

  4. 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 4

  5. 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 5

  6. 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 6

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  8. Critical Operational Processes for the Medicaid Health Plans • Medicaid’s 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) 8

  9. 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 9

  10. 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) 10

  11. 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 11

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  13. Office of Ohio Health Plans…& the need for change… CRIS-e OHP runs Ohio’s 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… • MIS’s 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 13 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  14. 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 Drivers • Business Pressures • Regulatory Demands • Rapid Change • Demand Growth • Cost Containment • Legislative & Commissions Recommendations • Audits & Oversight • Workforce Changes “PACMAN of State budget.” - Governor • People • OHP functional silos • IT Medicaid IS legacy system staffing, lack customer service focus • Reactive–crisis 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 • Technology • Antiqued technology • Multiple core systems • Numerous stand-alone, non-integrated systems • Lack of management data, data integrity, privacy/security protections 14 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  15. 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 15 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  16. Data Architecture Applications Architecture Conceptual Process Model Interoperability Model Technical Architecture Technical Models Technical Reference Models Standards 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 16 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  17. 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 17 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  18. MITS GoalsCMS selected Ohio as early adopter of MITA* 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 18 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  19. MITS Business Model To Be Model *Integrate LTC functions across business processes 19 from 10/29/2004 OHHIT Summit presentation by Ailene MacKay, Ohio Medicaid Information Technology System (MITS)Business Transformation

  20. Project Management Customer Relations Mgmt (Provider Svcs) Member Services (E & E) Benefit & Service Admin Privacy & Security Contract Management MITS Financial Management ManagementInformation QualityManagement Program Integrity HIPAA E-Claims & Encounters MITS Business Model 20

  21. Findings – Technical Gap Assessment 21

  22. 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 – 3.8:1 22

  23. 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 23

  24. 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_escapefire_563.pdf 24

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