Shumlin administration postpones Medicaid IT project - VTDigger

Shumlin administration postpones Medicaid IT project

Hal Cohen

Secretary of Human Services Hal Cohen. Photo by Elizabeth Hewitt/VTDigger

The Shumlin administration is proposing to postpone a major information technology project and follow Hawaii’s example to build out part of another.

Key officials from the Agency of Human Services testified on the issue Tuesday before a joint hearing of the Senate Institutions Committee, the House Institutions Committee and the House Government Operations Committee.

Hal Cohen, the secretary of the Agency of Human Services, gave cost estimates for the long-awaited integrated eligibility project, which is part of the framework for Vermont Health Connect. Integrated eligibility is a system that would help Vermonters determine which of 43 state benefit programs they could qualify for.

Back in February, the Shumlin administration canceled a bid process for two projects — the core component of the Medicaid management information system (a billing system) and integrated eligibility. Both projects are part of a $771 million suite of projects called the Health Services Enterprise Platform.

Cohen told lawmakers on Tuesday that the administration would postpone the Medicaid billing system project, MMIS core, in order to focus on building a smaller integrated eligibility platform than previously planned.

Cohen did not say how long the MMIS core program would be postponed. His spokesperson said in an email that the current MMIS core contract is set to expire on Dec. 31, about three weeks before Gov. Peter Shumlin leaves office.

“We realized that what we needed to do was to chunk, or break up these projects into smaller projects, smaller programs that we can succeed with and then go on to the next one,” Cohen said.

Cohen reported that the state and federal governments have already spent $350 million since 2009 on the Health Services Enterprise Platform. The majority of the money spent—about $200 million—went to Vermont Health Connect. The Shumlin administration also built two smaller Medicaid programs with the money.

His team proposed to spend $51 million in state and federal money over the next 18 months to build out what he called “Phase 1” of integrated eligibility. The U.S. Centers for Medicare and Medicaid Services would fund most of the buildout.

Cohen said Vermont would pay for around $5 million of the total. Because the agency has already been promised about $7 million in bonded money from the Legislature’s 2015 and 2016 capital bill, he said the agency may be able to refund about $2 million of the money.

Phase 1 would focus on building the foundation of the integrated eligibility system. The state would follow the lead of Hawaii, which shut down its state health insurance exchange and used the underlying technology to build an integrated eligibility platform.

Hawaii has the same software as Vermont, made by a company called Oracle and allows the state to input what rules it has for state benefit programs. For example, a rule could say that only people making under 138 percent of the federal poverty level can qualify for Medicaid, or a rule could say that says people making under 185 percent of the federal poverty level can receive food stamps.

Cohen is proposing that Vermont use the Oracle software to set up six benefit programs over the next 18 months that all have to do with health care. He is proposing that those six programs serve as a foundation for the system.

In Phase 2, he said Vermont would expand the system to include about a dozen total programs, such as heating assistance and supplemental nutritional assistance (food stamps).

Both phases of integrated eligibility would replace Vermont’s decades-old computer system called ACCESS, which requires state workers to manually enter people’s eligibility information in order to determine which programs they qualify for. The manual errors often lead to compliance problems with the federal government.

“It’ll help us be more efficient,” Cohen said. “It’ll give Vermonters the ability to do a great deal of forms online, to do eligibility online. It’ll give our staff the ability and the time to focus more on case management.”

Cohen structured his testimony in response to six questions from Sen. Peg Flory, R-Rutland, the chair of the Senate Institutions Committee. Flory said he needed to answer the questions in order to keep funding in the upcoming fiscal year for the information technology project.

Rep. Cynthia Browning, D-Arlington, asked Cohen’s team what kind of risks are associated with the projects. Major components of the Health Services Enterprise Platform is considered to be a moderate risk of not being completed, according to the Shumlin administration.

John Stern, the deputy chief information officer for the Agency of Human Services replied: “Not to be snarky, but I’m very concerned about funding.”

Browning replied, “You should be.”

Erin Mansfield

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