More Information Needed: How CMS Can Best Partner with State Medicaid Agencies

Focus Area:
State Health Policy Leadership
Delivery System Reform Medicaid

In a recent Health Affairs blog, Centers for Medicare and Medicaid Services (CMS) leaders in the Biden administration shared their vision and objectives for the country’s health care system. They set forth guideposts for the next 10 years of value-based care: “an unwavering focus on equity, paying for health care based on value instead of the volume of services provided, and delivering person-centered care that meets people where they are.” They emphasized “serving low- and modest-income, racially diverse, and/or rural populations,” and explicitly recognized this goal will require increased engagement with state Medicaid agencies.

So far, so very good. As they embark on this path, however, CMS leadership will need to keep in mind the support and tools that state Medicaid agencies will need to be full partners in these efforts. More specifically, moving the strategic objectives listed in the article — drive accountable care; advance health equity; support innovation; address affordability; partner to achieve system transformation — from aspiration to actuality will require data. For Medicaid agencies, the necessary data will need to come from the information technology (IT) systems that support today’s Medicaid business processes.

For example, the strategic objective to advance health equity requires “patient-level demographic data and standardized social needs data, as well as tracking data on penetration of Innovation Center models in underserved communities.” Yet very few state Medicaid agencies are prepared to access this type of information because they and the health provider community do not collect and store it in a consistent fashion.

In their description of the strategic objective to support innovation, the authors recognize that some providers may need additional tools to deliver home- and community-based care. One essential tool is interoperable electronic health records (EHRs), yet previous federal efforts to advance them left out essential Medicaid providers, those serving individuals with behavioral health and substance use disorder needs, individuals with intellectual and developmental disabilities, and the elderly. If Centers for Medicare and Medicaid Innovation (CMMI) seeks to ensure that data is gathered from a broader patient and provider community, early federal support is needed.

“Support” is not a euphemism for cash. Financial support for technology alone cannot build agency capacity. The federal government already demonstrates the value it places on Medicaid IT systems through the high levels of federal matching funds available to states to cover it — 90% for development and 75% for operations. Instead, coordinated federal and state attention to policy, people, operations, and technology is needed. State Medicaid agencies will need all four elements to procure and establish new IT systems or modify existing systems in order to build the data collection and reporting systems required to achieve CMMI’s strategic objectives. And prior to the acquisition of the technology, work will be needed to understand and implement any changes to underlying business processes, such as how new providers or covered services are defined, or claims paid by managed care sub-contractors collected.

There are three immediate steps that CMS could take to strengthen state Medicaid agency capacity to be full partners in innovative models:

1. Align efforts across federal agencies to support cross-agency state level alignment

This step applies to legislative mandates and policy directives from the federal government in general. It is even more crucial when testing new models of care. Innovation requires coordination and partnership not only across CMS but also the entire Department of Health and Human Services (HHS). For example, is the current Centers for Disease Control and Prevention effort to shore up weak public health data systems coordinating with the Center for Medicaid and CHIP Services? Duplicated patient identifiers in siloed state health systems developed to meet different federal needs are a recipe for conflicting information, unreliable reporting, and poor service. Data interoperability at the state level is facilitated by agency interoperability within HHS.

2. Facilitate procurement and access to services and solutions

States often cite their own procurement processes as obstacles to rapid deployment of initiatives. CMMI’s initiatives may be implemented more rapidly if attention is paid to developing alternatives to single-state procurements. Alternatives might include the promotion of multistate efforts such as the National Association of State Procurement Officials’ ValuePoint model or other models of shared services across states. Solutions that the federal government establishes for all states to use, such as the Federal Services Data Hub, which facilitates premium subsidy determination on ACA exchanges, are extremely helpful. Another helpful model is the recently announced Department of Labor’s initiative to use American Rescue Plan Act funds to centrally develop open, modular technology solutions that states can use.

CMMI innovations should also allow states to test alternatives to the current cost-allocation requirements for the enhanced federal matching rate for information technology. The factors that supported the time-limited, specific exception to cost allocation requirements during the implementation of the Affordable Care Act (ACA) — which allowed state agencies to share investments across Medicaid, health insurance exchange, and human service eligibility systems – should apply to the implementation of health information technology systems. The advancement of health equity and CMMI’s other strategic objectives will be accelerated if human services and public health programs can benefit from Medicaid and CHIP investments in information systems. Application of an exception similar to the one deployed during ACA implementation would allow states to thoughtfully consider cross-program use and benefits of interoperable health information.

3. Provide sufficient and appropriate technical assistance

Meeting these challenges will require that state Medicaid agencies build an organizational capacity that is sorely lacking in most states. State Medicaid agencies need technical assistance that recognizes that they have broad and varied responsibilities subject to interpretation and that must be flexible in order to respond to new demands. Such assistance should include how to operationalize ongoing and regular business process reviews; build an evaluative component in every initiative; effectively manage vendors, negotiate contracts, and manage projects.

States often cite the technical assistance provided through CMMI’s State Innovation Model (SIM) programs as extremely responsive to their needs. Due to the broad scope of the SIM grants, the technical assistance was long-term and flexible throughout the SIM process. It included both direct state assistance as well as the opportunity for states to learn from each other. While our organizations and others (such as the National Association of Medicaid Directors and the Robert Wood Johnson Foundation) have invested resources and thought to the modernization of state Medicaid agencies, federally driven technical assistance is essential.

Medicaid is routinely described as a state–federal partnership. Partnerships imply mutual responsibilities and mutual aid. The health policy agenda that Administrator Brooks-LaSure and her colleagues have set forth will require ongoing innovation by states in information management. Innovation, in turn, requires flexibility, agility, and room for experimentation that may not always succeed. We encourage CMS leaders to support state Medicaid agencies to enable them to become the partners that CMS needs to improve the value and equity of the care that all Americans receive.