States working to meet 2014 deadline to upgrade IT for Medicaid

States work to upgrade IT to meet 2014 deadline

Although more than half of the states are suing to get out of a massive Medicaid expansion under the federal healthcare overhaul, most also are working to overcome a key obstacle to growing their programs.

The Patient Protection and Affordable Care Act relies heavily on broadening eligibility in the joint federal and state program beginning in 2014 in order to extend health coverage to most Americans. The required Medicaid expansion also faces a constitutional challenge by 26 states on which the Supreme Court will decide by the end of its session in June. Those states maintain that the law creates an unconstitutional cost burden on their states beyond the federal government’s initial coverage of the cost of the new Medicaid enrollees.

If it stands, the Medicaid expansion will provide not only half of the estimated 32 million people projected to gain coverage under the law but also critical support to the functioning of state health insurance exchanges, through which the other 16 million people are expected to obtain coverage under law, according to Congressional Budget Office projections.

But the growth in Medicaid and the support those programs are expected to provide to the exchanges depend on the ability of states to upgrade the public insurance programs’ sometimes decades-old technology.

“Most of the current eligibility systems are often a part of the old cash assistance programs, and they are very much older systems, often legacy systems and have not been designed for the new world of engaging consumer-centric healthcare delivery,” said Patricia Mactaggart, a lecturer at George Washington University and the former director of the Minnesota Medicaid program.

The exact status of those technology upgrades and whether states will finish them by 2014 remain unclear, according to health policy experts following the issue. But recent evidence indicates most states—including some of those in the Medicaid lawsuit—at least are trying to enact such upgrades.

For example, 18 states have received CMS approval and funding for Medicaid IT system upgrades to help determine eligibility and aimed at allowing states to meet the 2014 requirements of the reform law, according to a recent annual Medicaid report by the Kaiser Commission on Medicaid and the Uninsured. Another 10 states and Washington, D.C., have submitted Medicaid IT upgrade plans to the CMS.

The increasing interest in that particular component of Medicaid health IT upgrades is driven in part by the offer of time-limited federal funding. The report, based on surveys of state Medicaid officials, found 19 more states expect to participate because of the increase in federal matching funds from 50% to 90% of the cost of major Medicaid enrollment-related technology upgrades before 2015.

“What you’re seeing from the report is how many states are moving fast to try to get their systems in order,” Samantha Artiga, one of the report’s authors, said when asked how the findings relate to the 2014 enrollment expansion.

States also have undertaken an electronic data