Michigan will share its Medicaid management system with Illinois in an unprecedented interstate alliance that will save the two states – and the federal government – in the tens of millions of dollars.
Under the agreement, Illinois will access Michigan’s Medicaid Management Information System as a shared service that will modernize its 30-year-old legacy MMIS system.
llinois could save $67 million and the federal government $272 million under the arrangement. Michigan could cut its operation and maintenance costs by 20 percent and potentially save $10 million over five years.
The program is being run by Maryland-based CNSI, who has also done similar systems for the states of Washington, Utah, South Dakota and Maryland.
“This innovative and unprecedented alliance is a testament to the success of Michigan’s Medicaid Management Information System, and the opportunity it presents for other states,” said Nick Lyon, chief deputy director of the Michigan Department of Community Health. “We anticipate a decrease in overall administrative costs for both states to make better use of program dollars which will help ensure better quality services for residents of both Michigan and Illinois.”
The Centers for Medicare and Medicaid Services has confirmed that this approach is fully consistent with the applicable federal standards and regulations.
Under federal law, each state must operate technology to support the back-end administrative functions of their Medicaid programs. MMIS allows for information retrieval and claims processing. Illinois and Michigan worked together and with the federal government to ensure that this alliance would comply with laws of each state and federal law, officials said.
Illinois has been working for over a decade on an economical way to implement a replacement system. By partnering with the state of Michigan, Illinois will effectively implement a modernized MMIS solution quickly and cost-effectively, while drastically reducing the high risk associated with such complex projects.
“Through this exciting joint venture, Illinois will make a dramatic leap forward in delivering high quality healthcare services to our citizens, Medicaid clients and providers while at the same time increasing the efficiency of state resources and saving taxpayers’ money,” Illinois Department of Healthcare and Family Services Director Julie Hamos said.
The first phase of the Michigan-Illinois system will launch in conjunction with the Michigan Community Health Automated Medicaid Processing System in early 2014 with full operational implementation in 2016. In addition, the electronic Medicaid Incentive Payment Program module implementation will also be part of phase one.
“This new, innovative alliance will meet Illinois’ MMIS modernization needs in an efficient, swift and cost effective way,” said Illinois CIO Sean Vinck. “This venture is an advanced solution for Illinois that we hope will be a national model for interstate collaboration and systems modernization.”
Vinck, along with colleagues in the Governor’s Office and Illinois’ Department of Healthcare and Family Services have worked with their counterparts in Michigan and the federal government for more than a year to drive the initiative.
Added Michigan CIO David Behen: “DTMB is focused on providing technology services that enable Michigan’s reinvention, and this partnership to support the business needs of the Department of Community Health and the State of Illinois is another strong example of how we are doing just that. Sharing of government services is the right approach for taxpayers and you will continue to see the implementation of shared services across all levels of government.”
The platform that will be used to migrate to the cloud-based solution is the Michigan MMIS which was developed by CNSI and known as CHAMPS, a federally certified system by the CMMS.
CNSI has worked with the state of Michigan since 2006, when it designed and implemented the Michigan Community Health Automated Medicaid Processing System for the Michigan Department of Community Health.
Through the partnership, the cost for implementing the system will be significantly reduced from an estimate of $190 million for a stand-alone system, to $85 million for implementation within the shared cloud model. Since the project is 90 percent federally funded for implementation, this translates to a savings of $10 million for Illinois and $76 million to the federal government.
The partnership is expected to save Michigan 20 percent in operation and maintenance costs, as well as potentially $10 million over a five year period. In addition, anticipated operational savings of this partnership are estimated to be $196 million for the federal government and $57 million for Illinois over a five year period versus a traditional stand-alone system.