The Centers for Medicare and Medicaid Services is preparing to pay $5 billion to modernize the information technology that support the Medicaid management information systems of most states.

CMS, which funds 90 percent of MMIS systems now in use, is funding development of new systems to replace current legacy systems that are typically decades old and have historically been very expensive to operate. In addition, existing systems don’t adequately support accountable care and population health management, says Steve Larson, executive vice president at Optum Government Solutions, the lead vendor.

Bloomberg/file photo

Optum’s expertise lies in pharmacy benefits management, project management and data analytics for population health and quality metrics, among other services.

Joining Optum are payer software vendor TriZetto and Medecision, which offers analytics for utilization review and care management along with a health information exchange. TriZetto already has sizable business in the Medicaid arena, processing 4 million annual transactions in 18 states. Services that Medecision offers include integration and implementation expertise.

The companies will use a range of modern modular software to upgrade functions of existing MMIS systems, and although the companies will be able to offer completely new MMIS systems, most of the modernization will involve the implementation of modules, Larsen says.

The vendor team also can run the MMIS on behalf of a state, he adds.

In the first two or three years, the market for upgrades could hit the $2 billion range, with the team picking up more business in subsequent years, Larsen says.

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