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State Perspectives On Building Information Technology For Health Reform



September 18th, 2012

Note: This blog summarizes key findings from a report by the National Academy of Social Insurance (NASI) Study Panel on Health Insurance Exchanges and the Center for Health Policy and Research at the University of Massachusetts Medical School. The report draws some key lessons from the experiences of the states most advanced in their implementation of the information technology necessary to support the Affordable Care Act (ACA).The work of the NASI study panel is supported by a grant from the Robert Wood Johnson Foundation.

In the wake of the U.S. Supreme Court decision affirming the constitutionality of the ACA, many states are reevaluating their planning and implementation efforts. One of the most time-consuming and challenging activities that states must consider is establishing the information technology (IT) infrastructure to promote access to and enrollment in affordable insurance plans through Health Insurance Exchanges (Exchanges) and Medicaid/CHIP programs.

To be successful, states will need to develop IT systems that securely facilitate the movement of information in near real-time, providing consumers with answers about their eligibility for public health insurance benefits or tax subsidies and enhancing their ability to enroll in health insurance coverage. The Centers for Medicaid and Medicare (CMS) is also seeking to offer a high level of customer service to consumers by setting expectations that state eligibility and enrollment systems allow an individual to complete an online application and receive placement into a health insurance program within as little as 15 to 20 minutes.

Building new or upgrading existing large scale enterprise technology systems to perform tasks required by the ACA presents major opportunities and challenges for states and the federal government.  On one hand, there are unprecedented funding opportunities for states, such as grants for planning and establishment of new Exchanges, and new funding opportunities for modernization of existing Medicaid/CHIP systems development.

On the other hand, the enterprise IT work that has to be done to be in full compliance with ACA expectations is enormous. Most states will need to conduct major updates or complete replacements of their legacy IT systems and create new interfaces to link individual eligibility and enrollment data among Medicaid, CHIP, and the state’s Exchange. In many cases, a wholesale system replacement may be needed. And, during this process, states must also adopt a parallel strategy of modernizing and maintaining their legacy systems until everything can be transferred to the new.

The Center for Consumer Information & Insurance Oversight (CCIIO) at CMS is the organization responsible for establishing the federally facilitated exchanges (FFE) and overseeing all Exchanges across the country.  Recognizing the significant IT challenges that states and the federal government face, CCIIO has provided substantial funding to so-called “Early Innovator” states to jumpstart their efforts and share their requirements and IT systems with other states. Ultimately, three states — Oregon, Maryland, and New York — and a consortium of New England states led by Massachusetts have received funding from this initiative.

CCIIO has also offered considerable flexibility for states that may not be prepared to operate their own State-based Exchange (SBE) by 2014. These options include operating an Exchange in partnership with the federal government (Partnership Exchange) or defaulting to an FFE run by the federal government.

To promote the sharing of information in order to support implementation of the ACA, we interviewed policy and technology leaders from the Early Innovator states and other states that have made significant progress in designing and developing Exchanges and/or in modernizing Medicaid and CHIP eligibility systems. The study panel report offers firsthand perspectives regarding these efforts and highlights key themes policymakers should consider as they plan to build and enhance their own state-based technology infrastructures to meet the ACA’s deadlines and requirements, including:
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  • Agreeing on a vision, strategy, and realistic plan for Information Technology development is essential for meeting fast-approaching implementation deadlines. The advanced states all stressed the importance of coming to a shared, high-level vision for their IT systems that complements the governance, policy, and programmatic needs of the state. States also need to assess their ability to meet the 2014 deadline, realizing that a fully functioning SBE may not be completed until 2015 or later. States that cannot meet this deadline can choose a phased approach and become a certified SBE in future years.
  • Determining a state’s Information Technology approach requires a careful assessment of internal and external resources. All states interviewed began their development process by carefully examining the capabilities of their existing IT systems — especially those in need of extensive updates or complete replacement — and the ability of current staff to create and/or oversee the IT systems necessary to implement health reform. Tight timelines, CMS requirements, risks of failure, and opportunities for reuse have caused most states interviewed to significantly rely on procuring “commercial off-the-shelf” (COTS) components and services from systems integrators.
  • Navigating policy and technology integration between an Exchange and a state’s Medicaid and CHIP programs is a complicated and pressing challenge. Despite the guidance provided in the ACA and subsequent regulations, states face significant policy decisions across Exchange, Medicaid, and CHIP activities which are at the heart of health reform. Our interviews indicate that the technology development that must support the implementation of these reforms is one of the most significant challenges and an immediate priority for states. Most states interviewed have focused their initial efforts on the integration of eligibility and enrollment functions between the Exchange, Medicaid, and CHIP systems. It should be noted that even states that choose not to expand Medicaid are still required to meet all aspects of the ACA, including designing seamless eligibility systems to serve the needs of the Exchange, Medicaid, and CHIP populations.
  • Leveraging federal resources, “reusing” technologies developed by other states and federal agencies, and participating in multi-state collaboratives may accelerate development and help minimize operational costs. To control costs and accelerate project timelines, states are exploring opportunities for aligning, leveraging, and coordinating the unprecedented resources available for Exchange and Medicaid/CHIP IT development. Advanced states are also actively exploring the potential to “reuse” knowledge and IT components developed by other states, the federal government, and commercial software companies. CMS is encouraging states to share and reuse at all levels — for example, by forming multi-state collaboratives so several states might share in the development, deployment, and system-hosting costs.
  • In order to meet deadlines, Exchange implementation efforts must proceed apace, despite federal and state policy, technology, and political uncertainties. The deadlines for creating an Exchange and modernizing existing Medicaid/CHIP eligibility systems to comply with the ACA have been established, yet many state and federal policy and technical decisions are still being determined. Most states are taking a phased approach to Exchange and integrated eligibility system development by planning to meet core insurance functionality for the 2014 deadline and expanding to broader functionality and additional health and human service programs in subsequent phases. States also have the option of starting out with the FFE or Partnership Exchange and, over time, ultimately obtaining certification as an SBE.

In closing, interviews with states that have made the most progress in designing their Exchanges and/or modernizing their Medicaid and CHIP eligibility systems have confirmed that meeting the technical challenges and deadlines for establishing ACA-compliant IT systems provides unique opportunities as well as significant challenges for all states, even to those considered to be leaders in this field. Regardless of the approach — SBE, Federally Facilitated Exchange, or Partnership Exchange — states would be well advised to seek out the Early Innovators and other advanced states to ask about lessons learned, to understand successful practices, to share artifacts and products, and to explore opportunities for collaboration to accelerate their own development efforts and to better control short and long-term operational costs.

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1 Response to “State Perspectives On Building Information Technology For Health Reform”

  1. bhorton16 Says:

    Not only must states worry about organizing the exchanges but they also must consider the huge cost it will be to implement the change. Read more about the cost of HHS Health IT requirements-bit.ly/Q2haKK

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