As more states are planning for and progressing on their Medicaid Enterprise System (MES) modernization journeys, some State Medicaid Agencies (SMAs) are reimagining alternatives to traditional procurements for acquiring modular solutions. Multi-state cooperative purchasing has recently become a hot topic. Organizations like the purchasing arm of the National Association of State Procurement Officers (NASPO) ValuePoint are facilitating public procurements and competitive contracting by harnessing resources from multiple participating states.
With competitive group procurements, states can reduce the time and cost traditionally needed for procurement with less demand on state staff, all while:
- Spurring new and innovative ideas for requirements from a collective of states versus in silos.
- Introducing the flexibility to negotiate with multiple vendors versus a single “best and final” vendor, ultimately reducing the risk of protest in states with procurement laws (assuming the state procurement chief agrees with the approach).
- Shortening the time to benefit through prebuilt contracts with Service Level Agreements (SLAs) that further reduce the time to award and onboard a vendor. Once the final master agreements (MAs) are finalized by NASPO, any state can use them. The state simply needs to submit a participating addendum to Centers for Medicaid and Medicare Services (CMS) with the bonus of potentially fulfilling CMS’s reuse requirements. However, states should note that making use of the MAs on the backend may require negotiations to add any state-specific requirements not covered.
Group purchasing is a tried-and-true concept for the private sector, yet it is new to MES market. In an effort led by Montana, CMS approved six master agreements for provider services in 2018, the first module to be procured via a multi-state cooperative procurement. Building on that momentum, Montana is initiating a new procurement for Claims Processing and Financial Management via NASPO ValuePoint in which Connecticut, Georgia, Missouri, Nebraska, Oklahoma, and Wyoming are participating states.
As it’s probable that we will see more multi-state collaborative purchasing on the horizon, states and vendors alike may be wondering whether participating is right for them. Participation and growing interest from states with large Medicaid populations are dispelling the myth that collaborative purchasing is just for small Western states. With the first two modules being Provider Management and Claims Processing, it is clear multi-state purchasing can be successfully applied to complex solutions and services. From a vendors’ perspective, the prospect of responding only one time to a cooperative purchasing solicitation’s core requirements, then proceeding directly to negotiations (versus responding to multiple single state RFPs), has strong appeal.
Proper planning is key to determining whether to use multi-state procurements and contracts. Developing a comprehensive strategy and roadmap for your state’s MES transformation can help determine whether leading or participating in a group procurement, versus leveraging an existing competitively sourced contract, is more appropriate for specific modules.
North Highland is currently providing planning and procurement support services to multiple states as they evaluate and navigate the cooperative purchasing process for the Provider Management, Claims Processing, and Financial Management modules. From our experience we’ve learned the states that succeed are those that closely manage their involvement to ensure they’re realizing the benefits of the group purchasing process, including speed to value and enhanced flexibility.
As states adopt modularity, traditional procurement processes must also evolve to be as efficient and seamless as the modular MES is designed to be. Breaking free of state procurement “business as usual” requires states to look at innovative approaches, such as cooperative purchasing, that make purchasing agility, innovation, and value realization a reality.