The Reinvention of MMIS Procurements

Deltek Analyst Kate Tussey reports.

In any realm of government contracting, some states come out on top of others. South Dakota recently found itself on the losing side after pumping an estimated $49.7 million since 2008 into a Medicaid management information system (MMIS) that still remains inoperable. After two years of disputes with CNSI, the Department of Social Services canceled the contract last October and is now facing a new system that could cost in excess of $80 million to complete. South Dakota should probably take a cue from states across the country that are no longer procuring MMISs in the traditional sense – one contract hinging on one vendor worth tens to hundreds of millions of dollars. INPUT recognized this growing trend last August and released a report detailing the new wave of Medicaid systems. Due to policy implications of the Affordable Care Act (ACA), Medicaid can no longer stand alone as a system. States are planning for integrated eligibility systems, health information exchanges, health insurance exchanges, ICD-10 upgrades, etc., all in an extremely short period of time. States need their new MMISs to be modular, interoperable, and easily adaptable to any future health care reform requirements thrown their way.

Illinois is one of those states looking to scrap its 30-year-old legacy system for a new MMIS implemented under a modular approach. The first phase is to automate federal Medicaid reporting for reimbursement of federal funds, with the second phase leading to the implementation of a pharmacy benefit management (PBM) system. Last will be the core MMIS that will provide infrastructure to all modules and process all other claims.

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Susan Thomas


Why does the system in South Dakota not work? Was there no contract oversight? Just curious. Does the state have any recourse?

Kyle Ridley

Hi Susan, we currently have an analyst researching the contract cancellation and will let you know when we uncover some valuable information. Thanks so much for your comment.

Kyle Ridley

Hi Susan, sorry for taking so long to get back to you, but the Assistant Attorney General from SD finally got back to our analyst and said they are not releasing any information about the MMIS contract with CNSI that was canceled due to ongoing litigation.

Susan Thomas

Kyle, I figured there would be an answer like that. Mouths tend to slam shut during litigation. I have worked for attorneys so I know the drill. Thanks for the follow-up.