Forge New Pathways to Medicaid Innovation
Massive changes are underway in how Medicaid programs finance care, manage operations, and procure crucial products and services while sharing and collaborating with other government entities. Responding to changes requires fundamental shifts in the Medicaid operating model, including technologies that facilitate cost savings, performance efficiencies, and improved care outcomes at lower total cost.
These forces are driving a transformation of traditional IT—design, development, implementation—models for Medicaid Management Information Systems (MMIS) that have been used for decades. To succeed in the rapidly evolving Medicaid sector, organizations must adapt to this new reality. Future solutions will be more interoperable, collaborative, and standardized to improve how the Medicaid community delivers cost-effective, higher-quality care.
Innovation is flourishing in several major areas:
Healthcare is shifting away from traditional fee-for-service payment methods (transaction-oriented) toward payment strategies based on quality, population health improvement, and individual outcomes.
2. Managed care convergence
Many state Medicaid programs have introduced commercial managed care organizations to drive cost savings, innovation, and efficiencies. Through capitation payment models, MCOs offer a potential for measurable, short-term spending reductions and greater predictability for aggregate program expenses. Advanced medical management capabilities used in commercial health care could potentially decrease aggregate costs in Medicaid organizations. Additionally, mitigating cost trends help reduce overall medical spending in the long term.
3. Procurement model changes
At the same time, state Medicaid programs are being challenged by Centers for Medicare & Medicaid Services to change their basic procurement models. This CMS initiative gives incentives to states shifting away from the one-source, monolithic solutions that single vendors have provided for decades to MMIS and fiscal agent needs.
CMS and Medicaid states are offering incentives for scalable, multistate shared services models to handle core function, population health analytics, and other MMIS modular capabilities. This approach will encourage participation in multitenant environments, reducing needs for customized business processes and technologies.
Finding pathways to value
Medicaid programs need faster pathways to value from their IT investments and roadmaps. These organizations should plan and act now to understand what is required to gain from more open, service- and user-oriented approaches to using technology. To achieve intended benefits, states must seek technology partners that can help them execute within a new paradigm.