Tom Graves, SVP State Government Solutions with Optum sat down with Rob Waters, VP & Program Director with HITC to discuss the company’s launch into the MMIS market, Optum’s services based approach and where this fits into the future of the Medicaid enterprise!
Rob Waters: There’s a buzz in the marketplace that says Optum is jumping into the MMIS market with both feet. Is that true?
Tom Graves: Yes, it is! However, our approach is new and different from past practices. We think states spend too much time focused on how their technology needs to work, and too little on how their program needs to be managed. It may be that Medicaid “systems” have historically held states back from modernizing and reforming their programs. But at Optum, we think there’s a better way. Our approach starts with a few basic premises:
1) Medicaid members and providers deserve similar care and support irrespective of how the state chooses to purchase it: either via capitation or fee-for-service (FFS).
2) There are many things that work effectively today in the managed care setting, such as claims administration, call centers, medical management and analytics that can be re-used in the FFS side of Medicaid.
3) States can get the support they need by purchasing services alone as opposed to building massive systems, which are then followed by purchasing services — it’s similar to buying electricity rather than designing and building a power plant.
4) Medicaid health plans should be considered as a source reference model for an approach that works for managing care since they sit in a position in the market today that most closely resembles that of a state: they take on medical cost risk for Medicaid recipients while delivering better care at a lower cost.
Our approach is a well-thought-out derivative of the same capabilities we use to help Medicaid health plans manage billions in medical cost every day.
RW: What does Optum think the Medicaid enterprise of the future looks like?
TG: All the changes states and CMS are trying to drive (such as modularity, MITA, etc.) are really about providing better services and outcomes at a better cost for people and for communities — that’s the Medicaid enterprise of the future. To do that, we recommend the following to states:
1) Shift the thinking from transaction-centric to data-centric.
2) Rationalize requirements to maximize the parallels to, and alignment with, commercial capabilities that already exist.
3) Stop buying technology that you don’t need and stop trying to use state Medicaid uniqueness to create a separate health care market vertical.
4) Deploy precious state program talent on managing and evolving policy that gets to your broader health care and cost objectives rather than using the resources to update systems and administer day-to-day claim transactions.
If states can do this, they will be able to tap into the heavy capital investment and innovations made by companies in the commercial health care industry, and then reap the benefits of more competition as a flood of new market entrants seek to help.
RW: What is required by states to adopt this “managed care derivative” approach for fee-for-service populations?
TG: States should procure modules, but procure them “as-a-service” or “business process as a service” (BPaaS) wherever possible, avoiding the system-build altogether. We understand it’s not exactly the same and it is a change, but in Medicaid managed care, states purchase similar services all the time — they’re just baked into the capitation rate. There are no systems to buy — not for claims processing, not for pre-authorization services, not for provider enrollment or any other business function. It’s all done “as-a-service.” The implementation is usually six months or less and that includes time to build out the network.
RW: How do you think this approach fits within the CMS definition of a modular MMIS?
TG: CMS has shown great flexibility in what constitutes a module. We find it interesting that most states, therefore, view a “module” as an MMIS “function” and see common definitions like provider enrollment, claims (or core) services, care management, etc., where each module is then integrated with the others via a systems-integration layer. Think of this approach as a horizontal slicing of MMIS requirements into modules. In this case, the state has essentially replicated the functionality required for their MMIS in multiple horizontal components, and therefore has multiple complex projects and vendors that have to cooperate and interoperate for a successful outcome.
What we’ve seen less of, but recommend states do more of, is to cut their MMIS requirements vertically — that is, by eligibility or service category, geography, or perhaps claim type such that all MMIS requirements are delivered for each vertical slice and then each vertical slice is integrated for core data needs. Nebraska is doing this with their residual FFS population; Massachusetts is doing something similar with their Long-Term Services and Supports (LTSS) program. And Montana did this some time ago with both their CHIP and Medicaid Expansion programs. With CMS documenting their willingness to certify this approach under “Administrative Services Only (ASO)” procedures through guidance issued last spring, there’s really no reason every state shouldn’t consider it.
RW: What are the other benefits states can receive with this paradigm shift to a services-based solution?
TG: With the Optum approach, which we call Optum Medicaid Management Services, the number-one benefit for states is that we truly put data at the center of Medicaid enterprise. We create an administrative environment for FFS that uses proven commercial capabilities for claims processing, etc., and then install a data analytics framework between them to ingest transactions and data from both worlds. In this framework resides an enterprise data warehouse that aggregates, organizes and enriches data for use in developing the program-wide insights and understanding needed to drive policy and program improvement and reform. This data analytics framework becomes the “system” for the state and transactional functions are performed through purchased services. Altogether, it’s a much simpler Medicaid administration model that is much less difficult to implement, operate and change as the program evolves over time. It is also ideally suited to do a better job of managing to better health care at lower costs. And since it leverages commercial services, new requirements for things like health savings accounts and beneficiary cost sharing coming to Medicaid are already baked in. There’s really no downside.
If states think creatively about how they can leverage this new CMS flexibility, we can collectively take Medicaid to a whole new level. And back to the original question about Optum jumping in, we collaborate with partners across the system to lead change in health care. It’s our mission to help make the health system work better for everyone. We’re anxious to do our part!
Join Optum and participating panel members on:
“What Comes First? Implementing a 21st-Century Modular HHS Ecosystem” on Tuesday, March 28, 10:45 a.m., and
“What Does Your Future Look Like? Taking the Mystery Out of a Services-Based Approach” on Wednesday, March 29, 11:30 p.m.
Register to Attend the 2017 State Healthcare IT Connect Summit | March 28th – 29th | Hilton Baltimore, Baltimore MD.