Roughly $400 million in information technology projects, including one that would underpin a new single-payer health care program, are behind schedule and at risk of not being completed on time, according to the legislative Joint Fiscal Office.
Those projects include an integrated system for determining eligibility for human services, Vermont Health Connect, and the Medicaid Management Information System (MMIS).
There is a “high risk,” according to JFO, that MMIS won’t be in place by 2017. That’s the anticipated start date of Green Mountain Care, the state’s planned universal, publicly financed health care program — often called single-payer.
The federal government currently pays 90 percent of qualifying IT projects. The funding is expected to be scaled back to 50 percent at the end of calendar year 2015, but state officials have said they expect the feds will extend the higher funding level into next year.
In the short term, Green Mountain Care could launch without a new Medicaid system, but according to JFO, using Vermont’s outdated IT systems for Green Mountain Care “while not impossible, is not a viable, or realistic long-term option.”
Launching with the old IT systems would reduce potential savings and could actually increase costs, JFO says.
Vermont is in the bidding process for the two largest components of the Medicaid project. It has already hired Goold Health Systems to be its pharmacy benefit manager.
The larger contracts will be awarded in November and December and work is expected to start in early 2015.
The previous 21 Medicaid information systems built over the past 10 years by states throughout the U.S. have been “late, over budget, or some combination thereof,” according to a 2012 report produced for Colorado.
Human services IT projects an issue of scale for VT?
Vermont Health Connect has cost more than $100 million and in its first year has enrolled 160,000 people in Medicaid and qualified health plans; a cost of $625 per person. Federal funds have covered 97 percent of the cost.
By contrast, Covered California, that state’s exchange, has spent $587 million to enroll 3.4 million people in Medicaid and qualified health plans; a cost of $173 per person.
Both states have struggled with the federal mandates of the Affordable Care Act. Neither has built a website that small businesses can use and both have had issues with increased Medicaid eligibility.
Californians are able to make changes to their personal information or coverage online, according to Covered California spokesman Roy Kennedy. That’s something Vermont Health Connect users aren’t able to do, which is a source of ongoing public frustration.
State officials also recently took down the Vermont Health Connect website and disconnected from the federal data hub to address security concerns.
Both states say they intend to use their full federal allotment to finish their exchanges; that’s $1.06 billion for California and $171 million for Vermont.
But the comparatively high cost of building IT systems for a small state raises questions about whether that’s an efficient use of federal money.
“I do think that’s the right question, nationally,” said Lawrence Miller, Vermont’s chief of health care reform.
A spokesman for CMS declined to answer specific questions about Vermont’s exchange.
Vermont has worked closely for years with the Centers for Medicare and Medicaid Services (CMS) developing its planned human services IT overhaul — a slate of projects that is decades overdue, Miller said.
Leveraging the work of other states on such systems isn’t practical, he said, because Vermont has already invested in software to underpin its own systems, and a product from another state would need to be customized to fit Vermont’s specific regulations.
A one-time $400 million IT investment is worthwhile for Vermont, he said, if it can allow the state to more efficiently direct the billions of dollars that flow through its social service programs.
The federal requirements for state-based exchanges and Medicaid information systems are the same for Vermont as they are for California or any other state, Miller added.
“That’s the scale problem that’s baked into the cake,” he said.
CMS has been deeply involved in all of Vermont’s contracting and project management decisions and knows where these projects stand, Miller said.
“They follow their money tightly,” he said. Federal support for these projects is undiminished, according to Miller.
