In his FY 2013-2015 Executive Biennium Budget, Hawaii Governor Neil Abercrombie highlighted the daunting challenges that faced his administration during the last biennium, including a $1.3 billion potential budget shortfall that threatened deep programmatic cuts to department operations statewide. The governor utilized a fiscal strategy to only address pressing needs while investing in the state’s future, with goals to improve government efficiency and transparency. For this biennium, Hawaii’s gross domestic product (GDP) is expected to increase by 2.4 percent in 2013, while unemployment rates continue to decrease.

The new biennium budget (seen above in Figure 1) has several areas of investment, including:

• Early learning and early childhood health
• Education IT and digital curriculums
• Increased resources for Hawaii’s aging population
• Environmental sustainability and protection

The biggest gains by department from FY 2013-2014 include the Department of Human Services ($309 million), Department of Budget and Finance ($251 million), and Department of Transportation ($52 million). The Department of Hawaiian Home Lands saw a budget decrease of $140 million. Investments for FY 2014-2015 include $151 million for the Department of Human Services and $91 million for the Department of Budget and Finance.

Although the numbers in Figure 2 look as if Hawaii has invested millions in information technology, the numbers actually represent more transparency into Hawaii’s IT reporting. Deltek was able to gather more data on the total value of IT projects in the state for the biennium budget. Health IT was a major investment, including $2 million for its health information exchange (HIE), $45 million for Medicaid IT initiatives, and $15 million for an electronic medical record (EMR) system. The Department of Taxation is also investing nearly $32 million into its tax system modernization project for FY 2013-2015.

Despite tough times that followed the economic recession, Hawaii has laid the groundwork for a stable foundation and is continuing to increase both its GDP and IT spending. Vendors working in the education, health, and environmental space should check out Deltek’s analysis on Hawaii’s budget here, and brush up on the Aloha State in our state profile application. For a free trial, please click here.

April saw the release of a tenth round of Health Insurance Exchange (HIX) Establishment Grants, awarded to Arkansas ($16.5 million), Hawaii ($128.1 million), Illinois ($115.8 million), New Hampshire ($5.4 million), and Rhode Island ($9.8 million). Details about states’ plans for these funds are explained here. On a related note, the Centers for Medicare and Medicaid Services’ (CMS) also announced the availability of new funding to support navigators in states with federally-facilitated or state-partnership HIX models. Activity also picked up in states that received funding for model design through CMS’ state innovation model (SIM) initiative, including Texas and Iowa.

Notable solicitation releases in April included:

• The District of Columbia Department of Health Care Finance (DHCF) released an RFP for a Medicaid Information Technology Architecture (MITA) State Self-Assessment (SS-A). Deltek will provide updates about the future procurement of a Medicaid management information system (MMIS) here.
• The Rhode Island Department of Administration, on behalf of the Department of Human Services (DHS), released an RFP for maintenance and operations of the InRHODES eligibility system.
• Three states released RFPs for pharmacy benefits management (PBM) services, including the Kentucky Cabinet for Health and Family Services (CHFS), Mississippi Department of Health (DOH), and the Indiana Department of Administration (DOA).
• New Hampshire’s Department of Health and Human Services (DHHS) released an RFP for SIM planning services.

Notable contract awards in April included:

• The Mississippi Department of Health (DOH) awarded its Patient Information Management System (PIMS) contract to Siemens Medical Solutions for just more than $3 million.
• The Hawaii Department of Human Services awarded the Electronic Health Record (EHR) Incentive Program contract to Xerox for nearly $9 million.
• The Kentucky Cabinet for Health and Family Services (CHFS) awarded its Health Insurance Exchange (HIX) Call Center project to Xerox. Deloitte is building the state’s HIX through  a contract awarded in October 2012 for more than $100 million.
• The Alabama Department of Mental Health and Mental Retardation awarded the Integrated Health Record System contract to CoCentrix.
• The Connecticut Health Insurance Exchange awarded its Small Business Health Options Program (SHOP) project to HealthPass.

Big news surfaced in Louisiana with the cancelation of a $29 million contract with Deloitte for the replacement Medicaid Eligibility Determination System (MEDS), originally awarded in April 2011. The state’s Office of Contractual Review cited the original RFP included a preference for a .net solution while Deloitte's contract proposal uses Microsoft Dynamics. The Department of Health and Hospitals (DHH) asked for an additional requirement for the system that was outside the original scopeand warranted a new RFP release. Prior to becoming the secretary of DHH, Bruce Greenstein was managing director of Worldwide Health for Microsoft. Greenstein also hired another Microsoft employee, Zachery Jiwa, to be DHH's chief technology officer, but he left the department in November 2012. DHH now plans to release a new RFP for the replacement MEDS.

Looking to May and the upcoming summer months, we anticipate activity will pick up in states participating in the SIM initiative as CMS approves states’ proposals, of which many have now undergone changes after initial review from CMS. We also anticipate an influx of contract awards for HIX navigator programs, particularly with CMS’ announcement of the availability of federal funding for navigators. States in federally-facilitated or partnership HIX models may also begin to draft legislation and plan for takeovers of additional HIX functions in the future, such as the recently enacted House Bill 1508 in Arkansas.

Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial. 

Despite a financially cautious approach, Georgia Governor Nathan Deal proposed an additional $2.1 billion to the FY 2014 budget compared to FY 2013, bringing total spending to $40.8 billion for the coming fiscal year.

The governor wants the FY 2014 budget to focus on eliminating waste, streamlining government operations, stimulating economic growth, and preparing for economic uncertainties. While most agencies’ base spending is reduced in FY 2014, investments will continue in key areas of health care and education. Governor Deal has defined health care as the largest cost driver in Georgia’s recent budgets, and that increased Medicaid expenses will require an additional $246 million in both FY 2013 and FY 2014 over current funding levels.

True to his word, the governor increased the Georgia Department of Community Health’s budget by $888 million, and the Department of Education saw an increase of $812 million. The University System of the Georgia Board of Regents also received a healthy increase of $220 million. The average reduced funding for departments was pretty minimal – the highest being a $23 million decrease for the Technical College System, and an $8 million decrease for the Office of the Governor.

Michigan Governor Rick Snyder is utilizing his fiscal year 2014-2015 budget to highlight Michigan as the nation’s “comeback state,” calling for both fiscally responsible and innovative spending to ensure a bright future. With no big surprises, education, health care reform, and transportation are among the state’s top investment priorities. More than 75 percent of the budget is dedicated to education and health and human services, and state spending will go hand in hand with outcome measures and performance metrics.

The FY 2014 budget totals $51.8 billion, a 7 percent increase from FY 2013. The FY 2015 proposed budget tops $53 billion. Table 1 below represents the total budget starting in FY 2010.

Michigan’s FY2014-2015 budget is spot on with Governor Snyder’s goals to increase better health outcomes, education, and transportation for Michigan citizens. Touted as the “comeback state,” Michigan is turning a corner as employment rates and personal income rise. The unemployment rate is decreasing faster than the national average, and the housing market is starting to gain momentum. Further, the governor has called for a focus on long-term solutions and assistance for struggling local entities. For a deeper dive into the state’s budget, please click here for an Analyst Perspective (log-in required).

Deltek is currently tracking more than 30 core-IT opportunities in the state of Michigan, valued at an estimated $3.3 billion. Vendors interested in forming a partnership with the “comeback state” should visit our Michigan state profile to access procurement information, budget documents, and key contacts.

Since February 2013 the media has focused considerable attention on the cancellation of the DoD-VA joint effort to develop a new Integrated Electronic Health Record (iEHR). Focusing on iEHR, however, misses the point that out of the $1.3B proposed FY 2014 development budget for the Military Health System (MHS), the iEHR represents a paltry $64M. Approximately $423M will be spent on medical technology development, advanced concepts development, and medical products support, making those the true areas of business opportunity.

In today’s climate of ongoing federal budget cuts, government contractors can be forgiven for feeling unsettled.  The good news is that the fiscal climate has stabilized somewhat, allowing us to peer ahead for potential business opportunities.  One of the areas attracting vendor interest is in military health.  Both the DoD and Department of Veterans Affairs have made the creation of an Integrated Electronic Health Record (iEHR) a priority.  Therefore, iEHR gets the lion’s share of media attention.  The iEHR initiative is only one aspect of Defense Health Programs (DHP), however, so this post will provide a high-level look at the shape of the DHP budget situation and where vendors might want to focus their business development efforts in the months ahead.

Starting with what remains of FY 2013, funding for the DoD’s Military Health System (MHS) in the 2013 Consolidated Appropriations Act (CAA) provided $32.7 billion, a $16 billion drop from the $48.7 billion called for in the President’s FY 2013 Budget Request.  The funding in the 2013 CAA represented a stunning 38% cut in the MHS’ budget, which received $52.8 billion in fiscal 2012.

Despite these cuts, the 2013 CAA also provided up to $16 billion for contracts for the remaining 5½ months of fiscal 2013.  This includes $522 million for TRICARE/MilHealth procurement until the end of September 2015 and $1.3 billion for TRICARE/MilHealth RDT&E until the end of September 2014.  Digging into the RDT&E number we find the following top 10 priorities outlined in the FY 2014 DoD Budget Request.

As we can see from this list, proposed RDT&E funding for iEHR in fiscal 2014 amounts to $64 million.  This is the issue that everyone is so narrowly focused on.  Meanwhile, there are potentially several larger pools of money that very few people are paying attention to.  For example, the proposed budgets for Medical Technology Development and Medical Products Support/Advanced Concept Development equal approximately $423 million.  Then there is the $43 million budget for basic IT Development not related to TMIP-J.

These budget areas are where opportunity at MHS can be found.  For the last few years $2.4 billion worth of MHS/TRICARE IT and concept development requirements have flowed through the Defense Systems Integration, Design, Development, Operation, and Maintenance Support (D/SIDDOMS) III contracts.  These contracts expire in December 2013 and the MHS has already stated that a follow-on contract vehicle will not be put into place.  This means that contracts for IT and concept development requirements like those listed on the TRICARE Acquisition Forecast will be competed in other ways, providing opportunities for large and small businesses alike. The TMA acquisition forecast for FY 2013 shows $225.4 million in planned procurements, equivalent to 43% of the procurement budget provided through FY 2014.  This suggests that ample procurement dollars have been provided to move ahead with a number of the technology acquisitions that are listed in the forecast.

Lastly, readers will notice that in my focus on the procurement of technology requirements I have not mentioned the $72.5 million budgeted for Medical Program-Wide Activities.  Assuming these activities comprise program management, acquisition support, and other professional services, I believe most of those budget dollars will find their way into task and delivery order contracts competed among holders of the Tricare Evaluation Analysis and Management Support (TEAMS) contracts.  A quick look through the TMA Acquisition Forecast for FY 2013 shows that the projected value of requirements which fall under the TEAMS scope of work equals $201 million out of $225 million.  This leaves $24 million in pure IT requirements available for competition in FY 2013.  Keep in mind that these are just the requirements listed on the TMA acquisition forecast.  More IT efforts are likely in the pipeline.

The Department of Health and Human Services (HHS) recently awarded a tenth round of Health Insurance Exchange Establishment Grants. Awardees this time include Arkansas ($16.5 million), Hawaii ($128.1 million), Illinois ($115.8 million), New Hampshire ($5.4 million), and Rhode Island ($9.8 million).  

States are able to use these grants to improve and enhance key functions of their insurance exchange. Each grant is made through an extensive examination of funding requested by the state, in addition to an analysis to determine reasonable funding from the federal government. Establishment grants will continue to be awarded through 2014.

Here’s a look at key insurance exchange initiatives from this month’s awardees:

Hawaii: The state will be using funds to hire staff, develop and execute contracts as it continues to develop a robust insurance exchange system. CGI was awarded a $53 million contract in December 2012 to build Hawaii’s exchange. The state has also plans to procure for a Small Business Health Insurance Options Program (SHOP) exchange in the near future.  

Arkansas: The state will be using its award to fund an Arkansas In-Person Assister (IPA) Guide program to assist in the deployment of more than 500 certified IPAs to assist consumers across the state during open enrollment. The state chose the partnership model for its exchange and is currently in the process of securing health connector outreach and education campaign services.

Illinois: The state will be using funds for a variety of tasks including recommending qualified health plans, operating its IPA program, raising awareness for its exchange, and implementing systems. Illinois will also be utilizing the partnership exchange model and is in the final evaluation stages for selecting its insurance exchange project vendor.

New Hampshire: The state will be using funds to continue planning and developing its consumer partnership marketplace, which includes hiring consultants to add capacity and manage activities. New Hampshire will be moving forward with a partnership model for its exchange.

Rhode Island: The state will be using funds to assist in the design of its comprehensive IPA program, in addition to developing a product and delivery system for its state-based insurance exchange, which it awarded Deloitte a $105 million contract to build. Rhode Island is also in the process of securing contact center services for its exchange.

Want more? Be sure to check out Deltek’s latest report on insurance exchanges. Deltek’s database contains a wealth of information about states’ efforts in implementing insurance exchanges. Not a Deltek subscriber? Learn more and sign for a free trial, here. 

Today President Obama delivered a $3.8 trillion spending plan to Congress which includes a $1.2 trillion request in discretionary funding levels and nearly $82 billion for information technology for FY2014.  The budget focuses on jobs creation, economic growth and to strengthen the American middle class.

The budget proposal also includes $1.8 trillion in additional deficit reduction measures over 10 years to reach a total deficit reduction of $4.3 trillion.   The proposed deficit actions would reduce the deficit to 2.8%of GDP by 2016.

Additionally, the budget proposes $400 billion in cuts to health programs including Medicare.  Savings and cuts would come from negotiating better prescription drug prices, fighting waste and fraud, and requiring the wealthiest seniors to pay more.

The table below shows the FY2013 enacted budget levels and the proposed FY2014 levels.

Other budget highlights:

• Includes $50 billion for upfront infrastructure investments to invest in repairs to highways, bridges, airports, transit systems, and to encourage innovative infrastructure projects 
• Invests in in education reforms and training with a commitment to early childhood education
• Simplifies the tax code and raises $580 billion for deficit reduction by limiting tax benefits, but not raising tax rates
• Creates new “ladders of opportunity” to ensure that hard work leads to a decent living by developing pathways to jobs and partnering with communities to rebuild after the recession 
• Includes $200 billion in savings from other mandatory programs, such as reductions to farm subsidies and reforms to retirement benefits 
• Proposes $200 billion in discretionary savings from both defense and non-defense programs 
• Offers $230 billion in savings from changes in the way the government calculates inflation for annual cost-of-living adjustments for benefits programs

Information Technology

The president’s budget proposes nearly $82 billion in IT funding, a 1.8% increase from the FY 2013 CR and a 2.1% increase over FY 2012 estimated level.

IT-related budget highlights:

• $575 million in savings is anticipated from DoD Data Center Closures. 
• $324 million is being cut from the DoD’s Global Hawk UAV program. 
• $22 million is being cut from Computer and Information Science and Engineering Research Programs at the National Science Foundation; CISE is the organization responsible for promoting R&D on big data.  NSF’s budget takes big hits for its small size, which will affect grant spending on technology R&D.  
• $81 million is being cut from the DoD’s Precision Tracking and Space System, which is part of Ballistic Missile Defense at the Missile Defense Agency. 
• $38 million in savings related to the Joint Polar Satellite System is anticipated at the Department of Commerce. 
• $29 million in savings is anticipated from IRS Business Systems Modernization at the Treasury. 

All told, the president’s budget request includes 215 cuts, consolidations, and savings proposals, which according to the administration, are projected to save more than $25 billion in FY2014.  The budget proposal outlines the administration’s priorities and proposed methods for generating more revenue, cutting costs, and reducing the deficit.  However, it joins competing budget plans in the House and Senate.  Serious Capitol Hill budget negotiations are not likely to take place until this summer.

As written last week, Deltek’s Health and Human Services Team is taking an in-depth look at Statewide Automated Child Welfare Information Systems (SACWIS) across the nation. This week, we take a look at SACWIS plans shaping up in Big Sky Country.

In the FY 2014-15 biennial budget, currently winding its way through the Montana legislature, an appropriation for $350,000 exists for planning the replacement SACWIS (called the Montana Adult and Child Welfare Information System, or MACWIS). The planning appropriation contains a provision that the Department of Public Health and Human Services conclude planning efforts and report back to the legislature when it meets again in 2015. Deltek is anticipating a procurement process; however, specific plans are not yet known.

These planning efforts over the next few years line up nicely with the state’s human services technology priorities. In 2012, the Department of Public Health and Human Services (DPHHS) awarded a contract to Deloitte for the combined health care information and Montana eligibility system (CHIMES). The MACWIS is next in line for replacement and will replace the current child welfare system, CAPS, which is nearly 20 years old and not SACWIS compliant.

Though the MACWIS project is now behind schedule, the allocation of funding is promising for Montana’s future protection of children from abuse and neglect. It is no small wonder that, as with most human services departments across the nation, DPHHS prioritized the replacement of legacy systems in an effort to expend state resources in an efficient and logical way.

Stay tuned this month for additional information on state efforts to replace SACWISs. Deltek’s GovWinIQ database contains a wealth of information about other SACWIS replacement and modernization projects across the nation. Not a Deltek subscriber? Learn more and sign up for a free trial. 

This month, Deltek’s Health Care and Social Services team is taking a closer look at Statewide Automated Child Welfare Information Systems (SACWIS). A SACWIS provides an official case record on all children and families served by the Title IV-B/IV-E State agency. According to the National Resource Center for Child Welfare Data & Technology, “By law, a SACWIS is required to support the reporting of data to the Adoption and Foster Care Analysis Reporting System (AFCARS), the National Child Abuse and Neglect Data System (NCANDS) and the National Youth in Transition Database (NYTD).” Furthermore, “A SACWIS/TACWIS is expected to have a bi-directional interface with a state's or tribe's title IV-A (Temporary Assistance for Needy Families, or TANF), title XIX (Medicaid), and title IV-D (Child Support) systems. SACWIS/TACWIS also must collect and manage the information necessary to facilitate the delivery of child welfare support services, including family support and family preservation.” 

According to our data, 24 states have active procurement plans related to SACWIS, while 36 states and the District of Columbia have an operational SACWIS. One state moving toward implementation of a federally compliant SACWIS is Mississippi. Last month, the state’s Department of Human Services (MDHS) released an RFP for independent verification and validation (IV&V) services. The selected IV&V vendor will assist the state in the procurement of a design, development and implementation (DDI) vendor and will oversee the DDI vendor’s replacement of the legacy system, in place since 2001.

Deltek’s GovWinIQ database contents a wealth of information about other SACWIS replacement and modernization projects across the nation. Not a Deltek subscriber? Learn more and sign up for a free trial here!

Stay tuned throughout the month for additional blogs featuring SACWIS projects taking place around the nation!