[A] new system to manage eligibility for Medicaid and state human services could come with a total price tag of about $129 million, and many legislators are gun-shy about the investment.
Medicaid-related parts of the project will be covered by a federal match, but, according to estimates in a memo from the Health Department, the federally funded Medicaid portion will ring in at $70.7 million — leaving the state to find more than $58 million.
Federal funding may be available for other portions of the system. So far only the Supplemental Nutrition Assistance Program (SNAP) has been identified to have a federal match of 50 percent, and the Agency of Human Services does not yet know what that amount will be.
The administration’s proposal to use bonded dollars from the capital bill, a two-year bill that funds state infrastructure projects, to fund the new tech systems has drawn concerns in Montpelier, and launched calls for more oversight of the state’s technology projects.
The eligibility system, partnered with a Medicaid management system, would replace the state’s current ACCESS platform, a 35-year-old IBM mainframe that Agency of Human Services officials say is very difficult to work with.
“It’s not easily configurable to meet the demands of the workplace,” said Stephanie Beck, director of health care operations for AHS.
Though ACCESS is used to manage eligibility for state benefit programs including the Low Income Home Energy Assistance Program (LIHEAP), Reach Up and Medicaid, the system requires that eligibility information be entered each time.
Besides which, the agency is struggling to find people to service ACCESS. It’s so old that many technicians familiar with the system are retiring.
In contrast, said Beck, the two proposed systems will be “one-stop shopping.” Between the integrated eligibility system and the Medicaid Management Information System (MMIS), the state’s Medicaid and human services would be centralized and streamlined, from eligibility to payments.
“It will dramatically change the way work is done in the district offices,” Dr. Harry Chen, commissioner of the state Department of Health, said.
The system will make it easier to sign people up for benefits, find which benefits they are eligible for, and track the benefits they are not using.
“It has the ability to transform how we do business,” Chen said.
The cost to the state
The project will qualify for federal funding from the Centers for Medicare and Medicaid Services: if the state puts up 10 percent of the cost of the IT project, the federal government will cover the other 90 percent.
That funding, however, only covers the parts of the project that relate to Medicaid.
According to estimates from the state Health Department, only 27 of the total 43 components in the integrated eligibility system will meet the requirements for the 90 percent federal match.
The state expects that of the remaining 16 human services programs, only one, the Supplemental Nutrition Assistance Program, could leverage a federal match of 50 percent. Other non-Medicaid programs that will be in the eligibility system include LIHEAP, Reach Up and General Assistance.
“The remaining programs will likely need to be paid for with 100 percent state funds,” the memo states.
The Health Department estimates that the state could leverage about $70.7 million from the federal match for integrated eligibility, which would leave the state to shoulder a price tag around $58 million.
The state is still accepting proposals from vendors to build the new systems, and likely will not have a contract in place until the fall, according to Beck. As of now, the costs are estimates, and will not be finalized until a contract is settled.
The exact percentage of the project that will be covered by the federal match depends on the system the state chooses, Beck said. There are pre-built systems, which can be transferred from another state, or Vermont could go the way of a customized system.
Under an exception that expires in 2018, the federal funding can be used on non-Medicaid parts of the integrated eligibility system to the extent that those parts are necessary for Medicaid. For instance, Medicaid requires certain data, like date of birth, to determine eligibility. Programs like LIHEAP might require the same information. The federal funds will pay for that overlap.
Beck said that in weighing proposals from different vendors, the state will consider which proposals make the most of the overlap, therefore capitalizing on the federal funding available.
In order to capitalize on the exception, AHS hopes to have health-related portions of the integrated eligibility system built by the end of 2018, when the exception expires.
The plan to replace the current AHS system has been a long time coming, and the projected timeline and costs have changed considerably over the last few years. A plan to have the eligibility system up and running by the end of 2015 was postponed when the federal fund exception was extended through 2018.
The other Medicaid-specific IT project, MMIS, has a price tag of $105.3 million. Federal funds will cover $85 million of that.
Work on one portion of MMIS, the pharmacy benefit management project, began in January with Goold Health Systems.
Skepticism in Montpelier
Meanwhile, the funding request has some feathers ruffling in Montpelier.
The administration is asking for a total of $16 million from the capital bill over the next two years, with an addition $16 million projected in the 2018-19 capital bill, to cover the cost of the two new systems.
In the shadow of big IT investments like Vermont Health Connect, many legislators are reluctant to put so much money into new projects, according to Rep. Alice Emmons, D-Springfield, who chairs the House Corrections and Institutions Committee.
“Everybody now is really gun shy,” Emmons said, “and the price tags keep increasing, because the technology gets more defined and more advanced.”
Aside from the price tag, there is some concern about funding IT projects from the capital bill, which uses bonded dollars that typically have a payback time of 20 years.
For construction of brick and mortar projects, the lifespan of the project will generally be longer than the time it takes to pay the funds back. But for IT projects, the project’s lifespan tends to be narrower.
Rep. Cynthia Browning, D-Arlington, a member of the House Institutions and Corrections Committee, has proposed draft language to create a joint legislative committee to oversee the state’s major IT projects.
The committee would include legislators and experts, and would have authority to approve spending on IT projects and, if needed, hire an independent consultant to monitor a specific project.
“It’s not that I don’t want to redo these systems, I really, really do,” Browning said. “I want them to work for Vermonters, but I don’t want to spend the money and have them not work.”
Browning would tie the language to the capital bill, which funds state infrastructure projects on a two-year cycle.
Emmons said that she and other members of the committee are interested in establishing some sort of oversight for tech projects.
The expiration of the federal funding offer in 2018 does provide an incentive to get moving on the projects, but Emmons said that the Legislature shouldn’t rush.
“We don’t want to leave federal dollars on the table, but we want to know we’re buying a system that will work and not come back in four years and say, we made a big $32 million mistake of taxpayer dollars,” Emmons said.
