States Using Health Information Technology to Enhance Medicaid Efficiency

STATES USING HEALTH INFORMATION TECHNOLOGY TO ENHANCE MEDICAID EFFICIENCY

Volume 28, Issue 487 March 19, 2007

Kory Mertz

States are choosing to spend the lion’s share of recently awarded Medicaid Transformation Grants on health information technology (HIT).

The grants—which will total $150 million and be distributed over federal FYs 2007 and 2008 —were included in the Deficit Reduction Act of 2005. Last January, the Department of Health and Human Services awarded the first round of $103 million to 26 states and the District of Columbia.

The law allows states to use the grants for a wide variety of purposes, ranging from increasing the utilization of generic drugs through education programs, to improving access to primary and specialty physician care. But in a reflection of the importance of HIT, most states plan to use their funds to invest in technologies to improve the flow of health information.

The largest of the grants, almost $12 million, went to Arizona to establish a web-based health information exchange utility that will allow Medicaid providers to instantly access patients’ electronic health records. Of the grants focused on HIT, three will be used solely to implement ePrescribing programs. Six states will use automated systems to detect fraud in Medicaid, with a strong focus on improving the verification of Medicaid eligibility. One state will employ HIT to analyze prescription drug claims data for fraud and quality improvement.

A few of the grants step out into territory that’s not been well explored.

Mississippi received a grant to create its “As One—Together for Health” system—a Web-based electronic health information highway. Born out of Mississippi’s recent experience with Hurricane Katrina, the state plans to use the Internet to enable providers to share “real-time” information in disaster situations, said Cynthia Brown a spokeswomen of Mississippi’s Division of Medicaid Providers. The HIT highway will allow providers to be updated about factors such as the need for, or availability of, staff and supplies. Providers will then be able to more efficiently manage patient flows and transfers.

An innovative feature of the highway is that it will be able to communicate with Alabama’s health system during disasters. This will tackle the cross-boarder communication failures that occurred in the aftermath of Katrina and other calamities such as the tornado that recently struck Enterprise, Alabama, near the Mississippi-Alabama border. “We’re hoping at some point in time in the future [for] the gulf states to be able to communicate as neighbors,” Brown said.

“Moving toward an electronic health record system from our perspective needs to be a step-by-step process, not something we can jump into full force,” she added. “The electronic health information highway is providing the infrastructure upon which those types of things can be built and we hope they will be.”

One-Stop-Shop

Michigan’s proposal for “One Source Credentialing” aims for cost savings in an area that not many have considered. Providers must typically be credentialed by three different entities: state government, health-care groups and facilities, and payers. The process of jumping through these multiple hoops makes the credentialing process time-consuming, paper-intensive and expensive.

Over the next 60 days, the Michigan Department of Community Health will work with all the health-care associations in the state to design a one-source credentialing process, said department spokesman T.J. Bucholv. If all providers and payers embrace the system, Michigan could realize an estimated $35 million in annual cost savings. “We really hope Michigan will become a model other states can follow,” Bucholv declared.

“Persons with disabilities are generally less likely to receive age- and gender-appropriate preventive health-care services,” says Kansas’s grant application. To remedy this situation, the state plans to embrace predictive modeling technology. In this case, the model will use claims data to calculate whether a disabled individual has been receiving appropriate screening and preventive care.

The disabled individual’s case manager—who will have access to this information through a computerized system—will be able to alert providers and/or payers if his or her clients have not been receiving appropriate preventive care. “We believe this will truly give us a tool to ensure screenings and preventive-care opportunities are met and overall health outcomes will improve, saving the state’s Medicaid program critical dollars,” said Dr. Andy Allison, acting Medicaid director and deputy director of the Kansas Health Policy Authority.

The first round of $103 million in grants that were awarded will be followed later this year with a second solicitation for the remaining $47 million. No state matching funds were or will be required. The second grant application forms are forthcoming at: http://www.cms.hhs.gov/MedicaidTransGrants/.