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The ongoing MMIS saga

Deltek has repeatedly reported on the issues states are facing when implementing their Medicaid management information systems (MMIS) – they are typically over budget, deadlines are missed, and systems are outdated by the time they are installed. The request for proposals (RFP) process is even cumbersome, with some MMIS proposals exceeding a thousand pages. This is costly for the vendor to produce, and the state to process.


Recently in the news, facing the MMIS monster, is New Hampshire. The state’s $61 million MMIS contract with ACS (now Xerox) was the largest computer contract in state history in 2005. While the state now estimates the system will be running by April 1, 2013, that mark is five years behind schedule, prompting a $15.8 million contract extension. Issues around federal requirements have been cited for the cause in delays, as well as modifications to fit new managed care laws in the state. Each delay requires an extension of the incumbent Hewlett-Packard contract, which is currently processing Medicaid claims until the new system is up and running. If Xerox does not make the April deadline, the vendor will be fined $5.5 million.


West Virginia recently awarded a staggering $248 million contract to Molina Medicaid Solutions to build its new MMIS, which was the lowest bidder on the project. The problems for West Virginia started when the MMIS RFP had to be canceled twice, the second due to a conflict of interest. HP was second in the running, and Xerox and CNSI overbid Molina, but received worse technical scores. West Virginia plans to withhold portions of payments on the contract until it is satisfied that Molina has done the proper work.


Although government recognizes that changes need to be made to the costly, burdensome MMIS procurement field (with its few titans), the right answer hasn’t been discovered yet. With a new set of individuals gearing up to enroll in Medicaid in the coming years, now may not be the time to switch things up. Take Arkansas, for example. The state tried to be as modular as possible in its approach, but found that vendors couldn’t support its vision yet. One thing is for sure though: States can’t continue to afford these systems, let alone those that take several more years to be developed than promised.


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