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Medicaid Enterprise System Modernization: Debunking 5 Modularity Misconceptions

In 2015, the Centers for Medicare and Medicaid Services (CMS) published the Modularity Final Rule, which included the Medicaid Modernization Initiative. As part of the rule, CMS recommended that states follow a modular approach for their Medicaid Management Information Systems (MMISs) to increase member engagement, enhance the member experience and provide better care.

Since that time, many states have embarked on the journey to modernize their systems. However, many more have either just started or haven't yet begun. Work to date across the country has shed light on five common misconceptions about Medicaid modularity:

Misconception 1: Technology Drives Modernization

Business and operational processes are the foundation of successful Medicaid system modernization efforts. Modernization projects provide states with a great opportunity to review their existing business and operational processes and transform them as needed. Modern technology should be viewed as an enabler. For example, as states transform call center processes, they may decide to leverage the massive advancements that have occurred in call center technology.

Misconception 2: Every Medicaid Modernization Journey Looks the Same

Some states have wholeheartedly embraced the shift to modularity, while others are taking a slower approach. Neither path is better than the other, however. State contracts for legacy MMIS systems all have different renewal dates. If a contract isn't up for renewal until 2027, for example, the state has a longer runway to plan for MMIS modernization and more time to gather lessons learned from other states’ implementations. The sequence of modularization can be different based on the specific state situations. The modernization/modularization journey for each state can look different, but at the end of the day, they all will achieve the same goal of improving health outcomes.

Misconception 3: The More Vendors Involved in Modernization, the Better

While vendor diversity can be a long-term benefit of modularity, experience has shown that when large numbers of module vendors are involved in the modernization process, project risk increases. Every additional vendor introduces more coordination and communication channels and increases the risk of failure. All projects face the "weakest link" problem — that is, successful vendors can be delayed by struggling vendors when dependencies exist among modules. As the number of vendors on a project grows, the weakest link problem becomes a bigger issue. It's important for states to make a conscious effort to limit the number of vendors involved in their MMIS modularization projects.

Misconception 4: Modernization Is All or Nothing

There are different ways to achieve MMIS modernization, and modularization is just one of them. The most risk-averse approach is for a state to "modernize in place," which involves modernizing the existing, functioning MMIS system. The first step is revisiting the underlying business and operational processes and then modernizing the system in phases. Another way is for states to keep their core claims processing and financial solution and modernize by pulling out the smaller modules — for example, the provider module and enterprise data warehouse — from the core solution to minimize the overall risk. It is not all or nothing.

Misconception 5: States Need to Own the Codebase

The IT industry as a whole has moved toward software-as-a-service (SaaS) models. SaaS will bring modular Medicaid solutions up to date with the market, drive cost savings and provide the flexibility to allocate state resources from IT-focused tasks to the business side of the program.

Another way to reduce the risks associated with modularization is to deploy modules in an incremental fashion rather than pursuing a large-scale, "big bang" implementation where all modules go live simultaneously.

When planned carefully, Medicaid modernization initiatives enhance the user experience, making it easier for beneficiaries to enroll for benefits and find providers, and streamlining the process for providers to submit claims for processing. Every state's journey to modernization, however, is unique. Gainwell Technologies can help states choose the best way to modernize, which will keep risks low, but achieve CMS' modernization objectives.

To learn more about mitigating risk on the journey to modularity, join Gainwell for an informative session on MES implementation at the 2023 State Healthcare IT Connect Summit, or visit us at booths 42 and 43.