In December 2015, the Centers for Medicare & Medicaid Services (CMS) published its “Modularity Final Rule,” which recommended states follow a modular approach for Medicaid Enterprise Systems (MES).
While shifting from legacy Medicaid Management Information Systems (MMIS) to a modular architecture offers many benefits, including greater agility and interoperability, shorter development efforts and fewer challenges related to vendor lock-in, it can also come with risks.
By recognizing potential pitfalls upfront, states can avoid the dangers associated with Medicaid system modernization. Here are five proactive steps to consider:
- Address the most significant risk associated with modularization. The claims, encounters and financial module is the most critical and complex component of a state’s MES. Due to their complexity, it is recommended that these modules be included in the last wave of modularization. While system integration projects are technology-heavy, business process changes are at their core. Thus, it is imperative to use a vendor with vast domain expertise and thought leadership towards modernization. Due to the complexity of the integration, it will also serve states better if they use a vendor partner to handle both systems integration and the claims, encounters and financial modules.
- Be conscious of the number of vendors used in your modular MES. As the number of vendors in your modular MES grows, the number of points of failure in integration also increases exponentially. This is further complicated by the varying vendor maturity levels for domain expertise, technical acumen and operational performance. For this reason, it is recommended that states be conscious about the number of vendors used in their MES journeys and contain this number to the low single digits.
- Embrace cloud-agnostic solutions. Consider using cloud-agnostic solutions that allow state agencies to avoid vendor lock-in, negotiate prices and have the freedom to move their solution workloads to cloud providers of their choice. This allows agencies to adopt newer technologies and services as they become available on different cloud providers.
- Adopt the right cloud architecture. While single-tenant SaaS models offer isolation, better processing power and easier customizations, state agencies can enjoy many advantages like lower costs due to economies of scale, smoother deployments and resource efficiencies by embracing true multi-tenant cloud models.
- Deploy industry-standard architecture solutions. A state’s MES must be interoperable with many different systems, including those of public health agencies, human service programs and other organizations. Thus, a modularized MES will require interoperable, open standards-based access channels that use web services, APIs, batch interfaces and other emerging concepts. This includes using interoperability solutions such as Fast Healthcare Interoperability Resources and Electronic Data Interchange that allow each Medicaid stakeholder to access MES functions using industry-accepted standards.
