The Arkansas Department of Human Services (DHS) Division of Medical Services announced on April 14 that it signed a $190 million contract with Hewlett-Packard (HP) to implement its interChange Medicaid Management Information System (MMIS).

The new system is expected to give the state the flexibility to adjust quickly to changing state and federal policies while processing daily claims for the state’s Medicaid clients.

Arkansas Medicaid Director Dawn Stehle said the Arkansas Medicaid Enterprise solution is a modular system for the state. The federal Centers for Medicare & Medicaid Services worked with the DHS on modularizing its MMIS, and the agency explored various degrees of modularization before settling on a three-part modular system that includes Core, Pharmacy and a Decision Support System. HP was awarded the Core component, which consists of the claims processing engine.

“The benefits of this [modular] design is that it allows vendors, which specialize in these areas, to not have to take on the whole MMIS claims process,” said Stehle. “This leads to better service and technology for Arkansas at a lower overhead.”

The analogy often used around modularity has to do with a car, Jim Joyce, general manager of health consulting services for Cognosante, a firm that helps states with their MMIS implementations, told Government Technology last week. Some people buy a brand-new car every eight years, but they may only need to replace the tires or transmission. The idea is that instead of replacing the whole MMIS system, states should just replace modules.

“The idea is to do one at a time, and don’t try to bite off the whole thing at once,” Joyce said. “More states are doing that and that model is much more successful.”

There are drawbacks to a modular approach, however, one of which is that it requires more coordination from the state as more vendors are added in the mix -- and tasks get exponentially complicated with each additional vendor involved, Stehle said.

The state also explored a shared services model partnering with Oklahoma, she added, but ultimately landed on the modular system.

“Due to the direction we wanted to go with initiatives like Payment Improvement, the shared services model wouldn’t work,” she said. “Shared services require a majority of overlapping common functionality. Arkansas is pursing lots of innovation in health care, which makes it hard to find a state in a similar situation.”

Under the new system, health-care providers will be able to receive real-time claims adjudication and resolution via a secure provider website, and Medicaid clients will be able to access their information to make health-care decisions via a secure client website. The state will also take advantage of HP Business Process Services during and after the implementation, which will be used for provider enrollment, claims processing, reporting and audits.

The seven-year contract includes one base year with six one-year options. HP will continue to manage the state’s legacy system until the new MMIS goes live. This contract extends HP’s nearly 30-year relationship supporting Arkansas.

Arkansas is the 17th state to adopt HP’s interChange Healthcare platform.

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