Modularity for Medicaid Systems: More Than Just Technology

A Public Sector Perspective

The next generation of MMIS technology promises to transform the way states manage what is, for many of them, their single largest program. Most states have multiple agencies that make up the Medicaid enterprise, with MMIS as the hub. Those agency partners - along with providers and recipients - may all be served by having a more modular system.

Current, monolithic solutions lock in a single vendor, which makes implementing business changes much more complex and constrains the Medicaid enterprise. It makes it difficult to modify business processes, and it limits the ability to seek the latest, best-of-breed industry technology. These monolithic systems are straining to adapt to the changing environment as more states move away from fee-for-service programs and adopt managed care models.

Use modularity as a catalyst to transform the enterprise

Modularity, on the other hand, allows access to commercially available products that also support private sector payers for certain business functions. Changes in care management can be accomplished faster with the use of plug-and-play components. Other key benefits of modularity include:

  • Operations can be designed to service customers, not the software
  • Components of the system can be shared - saving taxpayer money
  • Incremental system improvements will be cheaper and quicker

At least that's the promise. In reality there is no defined path for states to achieve the promised benefits of MMIS transformation. No state is like any other, and CMS is still finalizing its guidance on the new standards. The vendor landscape is constantly shifting while MITA is becoming more complex. It's a risky environment, with billions of dollars and millions of beneficiaries at stake. Nobody seems to have all the answers.


The risks of navigating such a complex environment can be reduced and controlled by adopting a well-planned, business-driven strategy.

Oftentimes, the MMIS technology is viewed as the driver. Rather, with modularity, the organization starts with an enterprise strategy, maps how that strategy may be executed throughout the enterprise, and then plans the technology as one of the many enablers of the strategy. Letting the technology drive the strategy can lead to blind alleys and costly mistakes, but starting with the strategy guarantees that modularity serves a holistic vision of the enterprise.


Consider all of these impacts by adopting a structured approach to making key decisions on the path to a future state. 


Developing - or evaluating - a Medicaid enterprise modularity strategy requires the organization to answer some key questions. What outcomes should be expected of the new MMIS? What is the current state of business processes, IT systems, and finances? What kind of solution does the marketplace offer? Do current processes and systems enable the organization to reach its goals? Start with the modularity strategy. Or, if the organization already has a well-articulated strategy, then assess whether it addresses all of the following components - it should.


Modularity allows an organization to design processes around the key functions of a program. Take a deliberate approach to evaluating current mission-critical processes, with the goal to increase quality and speed of services while also reducing costs.


Process alignment can improve operations. It can drive positive changes within the organization by transforming existing functions or building new ones. It's an opportunity to elevate workforce capabilities and help teams drive business results in new roles with new skills.


Modularity can enrich the exchange and use of information that can be used to support evidence-based practices and improvements in care. The enterprise strategy should consider the changing landscape of data management options in the context of key objectives.


The world's leading companies use data to improve performance. Operational Medicaid analytics provide the information needed to evolve and improve the Medicaid enterprise through the organization's people, processes, and technology.


The procurement strategy needs to be assessed, considering the added complexity of evaluating and procuring modular systems, to deliver the best value. It should be approached as a strategic tool to support all of the above factors: enterprise strategy, process alignment, organizational excellence, information management, and operational analytics.


Modularity affects the role of the integrator by expanding its scope to involve internal and external stakeholders across the enterprise of state government, providers, and beneficiaries. A Medicaid Enterprise Integrator is the key role that coordinates and combines all key elements through a holistic approach. The integrator should be in place early to manage the entire process.


While the MMIS technology may be the primary focus, adopting modularity will create impacts that ripple throughout the enterprise. It will change internal processes that need to be aligned with the new system. It will change the way the Medicaid enterprise organization operates. It will change the way stakeholders capture and utilize data.

Start with a strong modularity strategy - or by evaluating the current strategy - to ensure a structured yet flexible approach. Ultimately, the end result will be improvements to beneficiaries' health and quality of life.

For more information, please contact:

Rick Zelznak


Barbara Ray



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