State officials Tuesday sought to quell some lawmakers’ fear that Vermont is spread too thin as it moves forward with $420 million in IT projects to improve the delivery of human services.
Harry Chen, acting Secretary of the Agency of Human Services, began his remarks to the Health Care Reform Oversight Committee on Tuesday by assuring the panel that he is now responsible for Vermont Health Connect, the state’s troubled health insurance market.
He will also be in charge of two other major IT projects slated to begin next year for the Agency of Human Services. One is a new Medicaid system and the other would create an integrated system for determining eligibility for the agency’s programs.
Lawmakers were eager to hear what lessons from the state’s struggles with Vermont Health Connect could be used to keep the upcoming projects from following the same course.
Closely managing their scope and having a strong a governance structure are key to making those projects a success, said Lawrence Miller, Vermont’s chief of health care reform.
The state and its contractors failed to do either, according to reports from vendors and consultants — most recently Optum — going back to at least late 2012.
Breaking these projects into “digestible pieces” will be crucial going forward, Miller said.
Unlike Vermont Health Connect, where the state was building a new system on a tight timeline, Vermont has working eligibility and Medicaid systems, Chen said.
That will allow the state to not launch the projects until they’re ready.
That means the new systems can be tested until they’re ready and launched in phases, Chen said. Miller said trying to use the new Medicaid system to support the transition to single-payer would be “reckless at best.”
However, the legislative Joint Fiscal Office recently warned that without these new systems in place, savings from single-payer could be lost and the program could actually drive up costs.
Rep. Janet Ancel, D-Calais, chair of the House Ways and Means Committee, appeared wary that the federal timeline for Vermont Health Connect was the only reason that project has faltered.
“Maybe the issue wasn’t the timeline for the ACA, it was how we responded to that timeline,” Ancel said.
“How many balls can you juggle?” she asked, “Because anyone who’s lived through a (Medicaid system) rebid knows that it doesn’t matter who gets the bid, during that start-up there’s bumps in the road.”
The Medicaid Management Information System (MMIS) is the state’s management tool for Medicaid recipients.
The state is taking into account what resources it has to oversee contractors, said Stephanie Beck, program director for the Health Services Enterprise, who joined Chen and Miller. Health Services Enterprise is how the state refers to all three projects.
The state is required by federal law to put the Medicaid system out to bid Miller said, and when the contract was awarded last time, there was an agreement that it would be overhauled, Beck said.
However, Beck said the state has had preliminary discussions about delaying work on the integrated eligibility system if higher matching fund levels from the feds, which are set to expire at the end of 2015, can be extended.
Chen and Miller said they were confident that funding would be extended based on conversations with federal officials.
Procurement underway
The integrated eligibility (IE) system is expected to cost $80 million and will replace the outdated ACCESS program to determine people’s eligibility for state services.
That project is being split into two parts, the first will do eligibility for health related programs and is expected to be completed by the end of 2015 to take advantage of higher levels of federal funding. Previous estimates from the state project those costs at $23 million. The second phase will cover other agency services, such as Reach Up.
Vermont is in the final stages of vetting bids for the integrated eligibility contract. The bidders are Optum, the state’s new primary contractor for Vermont Health Connect, Deloitte, Engage Point, Monad Solutions and WIPRO.
The MMIS system is split into three parts, with the first being a new pharmacy benefit manager. The state has hired Goold Health Systems for that, and that portion is expected to launch in January.
A care management component will launch in 2015. A list of bidders for that portion could not immediately be obtained.
The core Medicaid management system, which includes operating a call center, will be implemented in stages, beginning in July and expected to be completed by 2017.
The call center is currently managed by Maximus and the core system was built and maintained by Hewlett Packard, both companies have bid again for those contracts.
Contractors were able to bid on either the core system and call center. CNSI Inc. bid for both, as did Hewlett Packard.
The contracts for all portions of the Medicaid system will be awarded before the end of the year, and are expected to cost a combined $100 million.
Maximus bid for the call center only, as did Connexions, a subsidiary of Optum.
When combined with the cost of completing Vermont Health Connect, the Agency of Human Services projects cost are expected to cost a combined $430 million. The state says it will pay only $28.5 million of that, with the feds picking up the balance.
