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Deltek Pulse: Health care and social services – February 2012 recap

As the January 2014 implementation deadline fast approaches, February was yet again chock-full of news surrounding health insurance exchanges (HIXs). While some states continue to make progress toward meeting the deadline, others are still contesting the federal HIX mandate and plan to wait out the results of this month’s Supreme Court case surrounding its legality.
On Feb. 22, the Department of Health and Human Services (HHS) awarded additional Level One and Two establishment grants to 10 states, totaling nearly $230 million. Among them, Colorado, awarded $18 million, completed proposal submissions for two HIX-related procurements: HIX Services and HIX Operational Services. Other consulting and quality assurance-related procurements are in the pipeline. Nevada, awarded its second Level One grant worth $15.3 million, will use the funding to build a rules-based eligibility engine, to develop an operational plan, and to determine certain business and IT requirements unrelated to eligibility.
As the 2013 fiscal year (FY) approaches, governors continued to release state budget recommendations throughout February. A commonality amongst states is the continued battle to fund the ever-growing Medicaid population, particularly in the face of Medicaid eligibility expansion resulting from the Affordable Care Act (ACA). Beginning January 1, 2014, states will be required to expand Medicaid eligibility to all people below 133 percent of the federal poverty level, adding approximately 15.9 million newly-eligible beneficiaries to the Medicaid program. Based on the state budgets Deltek has analyzed since the start of the year, Massachusetts will see the biggest increase in Medicaid spending in FY 2013, with a 64.4 percent increase since FY 2010. Other major increases since FY 2010 include Alaska at 49.7 percent, Delaware at 36.4 percent and California at 35.4 percent.
On Feb. 23, North Carolina announced it would once again extend its current contract with Hewlett-Packard (HP), while Computer Sciences Corporation (CSC) – awarded the replacement Medicaid management information system (MMIS) contract in December 2008 – continues to build its MMIS for the state. This $122 million, two-year contract extension is the second awarded to HP for the MMIS, bringing the total contract value up to an estimated $616 million. Meanwhile, CSC was awarded another replacement MMIS contract with the Maryland Department of Health and Mental Hygiene, valued at $297 million.
Further, Florida was selected by the Centers for Medicare and Medicaid Services (CMS) to pilot the latest version of the Medicaid Information Technology Architecture (MITA) initiative, MITA 3.0. In doing so, the Agency for Healthcare Administration (AHCA) will complete a state self-assessment (SSA) and develop a roadmap to be used in planning future system upgrades and replacements to be completed by the end of June 2012.
Continuing to work toward the HIX implementation deadline, I predict states will be busy hiring consultants, producing technical plans, and releasing HIX solicitations throughout the next few months. However, this all may come to a halt pending the outcome of the March 26 – 28 Supreme Court case surrounding ACA. Expanded Medicaid eligibility may also be affected by the outcome of the case.
Throughout March and April, Deltek will continue to delve into state budget recommendations and take a closer look at Medicaid spending data. Be on the lookout for the round 3 of our series on the rising price of health care costs! As always, remember to follow Deltek’s Health Care and Social Services team on Twitter @GovWin_HHS, or connect with us through LinkedIn!

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