E-Prescribing and Medicaid CMS' Perspective
Rick Friedman
10/7/2008

Slide: 1
E-prescribing under the microscope

So let me go ahead and introduce our first speaker who is Rick Friedman. He is with the Center for Medicaid and State Operations, CMS. Rick’s division is responsible for developing and overseeing CMS funding policies for automated claims processing and information retrieval systems. He also directs CMS Medicaid system involvement with HIPAA and is leading a major national initiative to redefine the Medicaid IT architecture, otherwise known as MITA based on patient-centric web-enabled service oriented architecture for the Medicaid enterprise and serves as the Medicaid Health Information technology health information exchange lead with then CMS. He will be talking about the flow of e-prescribing within Medicaid systems and how we may be able to work within this architecture to expand Medicaid and prescribing. I’ll turn it over. Thank you, .... It’s a pleasure to be here. I am delighted to be associated with Medicaid which I think is probably the most dynamic and interesting program across the country. If there are 51 different states and the District of Columbia, each of which, are really trying to solve huge challenges. Its 51 different laboratories, if you got a problem with Medicaid, there’s probably somewhere in the country where it’s been resolved or certainly being worked on. So the trick is, to try to put all these parts together and to share that information. The secretary mentioned that e-prescribing is really part of a much larger agenda, relative to e-Health. I want to talk about both e-prescribing and e-Health and we we’re doing from the federal side relative to CMS and support of states and the district relative to what their initiatives are in terms of the information technology.

Slide: 3
Chart of number of enrollees in Medicaid

To begin with, in terms of Medicaid, it’s really been a straight line north in terms of the numbers of folks that have been enrolled in the Medicaid program. Beginning in the mid 1960’s, when I joined back in 1978, you could always say there are 22 million people enrolled in Medicaid. Those 22 million kept changing but the numbers were fairly flat. Today, it’s over 50 million.

Slide: 4
Summary of Medicaid statistics

In terms of Medicaid, just to summarize a program as complex as Medicaid on one slide, is a huge challenge. But in the upper left quadrant, is basically a discussion of the types of people that are enrolled, 55.2 million folks and the amount of money that is spent, federal tax dollars and state dollars, state tax dollars combined. The light blue in the left column are the numbers of children and you can see that represents more than half the column. But in terms of the expenditures on the right column, most of the expenditures really are devoted over 60% for the aged and disabled. It comes as no surprise, but it’s sort of the way that Medicaid shapes out nationally. If you go over the right - upper right column. The circle represents the total amount of spending in Medicaid, federal and state combined. The administrative costs are the blue slice and this white slice represents the amount we spent together on IT. We spend about $1.5 billion a year on information technology in Medicaid programs across the country, that’s a lot of money. But compared to the over $350 billion that represents less than one-half of 1% on IT. The lower left represents the six original, what we call subsystems for the claims, processing, and information retrieval system, the MMIS, Medicaid Management Information System. It’s the basic core system that all states wind up using to process claims overtime in their Medicaid program, but it does a lot more than process claims. It really becomes the neural network for states to try to control their costs and to stay on top of the quality of care. So the MMIS represents historically these three, these rather six circles which have changed. And there is sort of a paper chase states need to go through in order to get funding from the Feds. There is a 90% match available from the federal government to state governments to build systems that meet certain standards, 90. The typical administrative match is 50-50. So it is a huge incentive for states to be as creative as possible, as thoughtful as possible in terms of making of systems that make sense on behalf of their clients. They do have to go through an advanced prior approval process with our 10 regional offices and if they build the system, it’s a 90% match, once they throw the switch and operate it, it’s a 75% match and for all things unrelated to the MMIS, it’s a 50% match. With then go around the country and certify these systems.

Slide: 5
If you look at the country as whole with about 330 million people, 1 out of 6 folks are on Medicaid today, about 55 million. The numbers of births on average across the country, 2 out of every 5 are covered by Medicaid. There are 9 states where 1 out of every 2 births in that state is covered by Medicaid. So if you want to think about the future of this country in terms of healthcare and how well we can keep our citizenship healthy, Medicaid is a key driver compared to Medicare, there are more folks on Medicaid in terms of spending 1 out of every 5 dollars spend on healthcare in this country goes to Medicaid.

Slide: 6
From our prospective, what do we really see the world looking like from a healthcare perspective over the next 5 to 10 years?

Slide: 7
Evolutionary stages of adoption of e-prescribing

Historically, we have really focused on accuracy and timeliness of payments to providers to make sure that we’re paying things appropriately. And that really is largely a systems design. That shifting, to pay more attention to quality and efficiency in terms of the healthcare delivery and ultimately, we really want to improve both beneficiary healthcare outcomes as well as population health. And so the outcomes really become the focus of all of these. And that’s clearly is what e-Health is driving towards and certainly e-prescribing.

Slide: 8
There are number of things from our perspective that we think is really important sort of political critical underpinnings for e-Health. It starts with making sure that the consumer, not the government, not even the providers are at the center of healthcare. The consumer needs to be driving this. They need to be able to have enough information to make appropriate decision relative with the care. That’s where the personal health records and other e-Health activities come into play. It’s also important that clinicians of course have a longitudinal record. Not just to the care that they deliver, but that everybody else did too. So that in the secretary’s example of where - the secretary from Rhode Island, the Governor rather where they got all these manilla folders, you can pull that together in some sort of a logical way to see what that person’s medical history has been. Quality, public health and moving really from transactions to actions sort of get out of the way of what the machines are doing and make sure that the focus is on people and the outcome is the ultimate objective.

Slide: 9
And CMS places a very high value on cross fertilization. To be able to share the data across the silos. And that’s true both at Medicare and Medicaid. Today, the MMIS or the systems states use are really not interoperable. If you were a migrant worker and you started picking oranges in Florida and you move with your family - you’re on Medicaid and you move with your family up the Atlantic Seaboard, from Florida to Georgia, through the Carolinas and then in the fall you wind up at upstate New York. If you became ill anywhere along that journey, it will be very difficult for Florida’s Medicaid program to share the healthcare record, the payment history with Georgia, with the Carolinas, with upstate New York. What we are trying to do is to change that and to make sure that the systems can talk to each other across the boundaries and what were doing is we’re adopting standards and approaches that are true in other industries whether its banking or transportation in order to be able to share data across boundaries, make sure that it is both patient-centric, that it’s secure, its confidential, but is enterprise-oriented rather than silo-oriented and part of this relates to HIT and HIE. We refer to this effort not as MMIS, but as MITA or the Medicaid IT Architecture.

Slide: 10
Skipped Slide

Slide: 11
Let me just run through a couple of these things. MITA basically is a state-driven program as well as federal, so it’s not a one-size-fits-all. We’re not trying to develop the universal holy and apostolic solution for Medicaid IT systems. What we’re trying to do is to create tools and the standards so the state themselves can craft decisions and build systems that are interoperable, but meet their specific needs, not something to post on them from the beltway. It really is business-driven to be sure that standards are key in these for interoperability and to make sure that security and privacy are also important.

Slide: 12
I think about MITA as if its Tinkertoy set in which Tinkertoys basically are built to certain standards. The blocks are of certain size, there are a number of holes in them that are basic and the lengths of the dowels are the same. But people can build different things using the set of instruments inside of a Tinkertoy box just as they can with MITA to meet their customized needs. It really is a framework, it’s a tool kit and a road map and it’s not a one-size-fits-all approach.

Slide: 13
You never know when the last bullet is going to show up on something like this before you slide over to the next screen, but I think I am there. But with regards to the goals and objectives of MITA as the screen really shows you that is basically about interoperability, it’s about standards and it’s about ensuring that it’s patient-centric. We also want to make use of COTS to the highest degree possible in terms of commercial off-the-shelf software.

Slide: 14
How would we handle some of the funding issues associated with this?

Slide: 15
E-health schematic

If you think about e-Health and certainly e-prescribing is in there, but it also relates to electronic health records, electronic medical records and personal health records. From our perspective, it really is a set of pieces, there’s a data warehouse, there is some hardware and software associated with it, there’s probably a web portal associated with that too and there’s a decision support system that sits on top of it.

Slide: 16
In this instance, if that purple box in the middle that represents sort of the heartbeat of e-Health, in this case e-prescribing. If it’s built by the state Medicaid agency in terms of a web portal, so that when somebody walks in to the physician’s office and information is sent both to the green box which represents the Medicaid agency as well as through the web portal are both claim information and the prescription that goes into that web portal. It ties back into the longitudinal medical history, medication history of that patient which sits in there. Information goes on to the pharmacy. Information comes back from the pharmacy and the information relative to the pharmacy claims goes into the Medicaid agency. So there’s both financial information, healthcare information and Medicaid information that’s associated with this. The way that it works is that to the degree that that web portal decision, support system, that mechanism to facilitate e-prescribing as built by the state agency, we consider that to be part of MMIS. Therefore, its eligible or 90% federal matched. There is a 75% once the thing is built to operate it. So - is that a warning, I should be done? Five minutes, okay. I’ll slow it down, I only have another slide left. Anyway, so there’s a 90% match to build it in 3 quarters of a match, 75% to pay for operations which is a pretty sweet deal. There is however in this example, costs incurred by the physician and by the pharmacy. Well, there are sort of key stumbling blocks together with privacy and confidentiality and e-prescribing, who is going to pay for those costs. Our authority currently does not allow us to pay for physician costs or pharmacy costs relative to IT. Our funding goes to the green box which is the state agency. If there is a special grant, that is a whole different story, but in terms of standard and the last funding, we support the state agency which then builds things or contracts with others to build thing and we help pay for the cost.

Slide: 17
Another example, probably one more familiar to you is one in which there is an electronic switch involved which sits outside of the Medicaid agency and frankly is serving multiple payers and multiple providers. In that case, the flow of information is very similar. The matching rate for this is that in terms of the MMIS, they have to change what they have there in their medical history file information that they want to send that electronic switch. That’s part of their MMIS. The Feds will use your tax dollars and mine to help pay 90% of those costs associated with the state agency participating in that activity. In terms of changing the internal system within the Medicaid agency to make it compatible, to be able to share in. They will also pay for 75%, the operations costs, to help pay at least 50% of the administrative cost of the contract between the switch and the state agency. Again, there really is no what we call FFP or federal financial participation in the costs incurred either by the physician, the prescriber or the pharmacy. And that’s the end of my story.