States need direction on how to obtain and use IT dollars to innovate and develop health IT within their Medicaid programs. According to Rick Friedman, the money is out there but "the real challenge is to find it."

During Government Health IT's recent eSeminar "Medicaid's Health IT Makeover", Rick Friedman, Director of the Division of State Systems within Centers of Medicare and Medicaid Services (CMS), spoke on how they are working to incorporate new health IT systems and practices into Medicaid's business systems. Just to provide some context, total Medicaid spending in 2007 was over $300 billion dollars of which 11 percent was spent on administrative overhead costs. Friedman reported that Medicaid IT spending across the country totals around $1.5 to $2 billion a year. This is less than one percent of the total Medicaid spending. The chief IT investment is the states' claims processing systems, called the Medicaid Management Information System (MMIS).

The ultimate goal, according to Friedman, is to transform Medicaid's outlook from one characterized by departmental silos to one based on interoperability and health care outcomes. The future vision is that medical information will follow the consumer, which is very difficult to do with today's claims processing system because of the way they were originally built. The states customized their own systems for processing capabilities, but now the current models do not easily share information with their own sister agencies or with other states.

Enter the Medicaid Information Technology Architecture (MITA), a web-based, patient centric, interoperable system framework that is based on industry IT standards. Friedman compared MITA to claims processing as "what we've had in the past on steroids". But he was also quick to point out that MITA is based on state input, not the Feds trying to figure it out and push it down to the states. Friedman said their objective it to make sure to adopt data and industry standards, and try to build things that can be reused as components in other places. Friedman likened MITA to a Tinkertoy set; the classic construction toy that comes with spools, rods and connectors. He described the Tinkertoy framework as one in which the pieces are built by certain standards but you can take two boxes, mix up the pieces and build something to meet your unique needs. Someone else could take the remaining pieces and build something completely different. Each built something that met their individual needs but used standard pieces to make it work. Finally, if we want to combine the two separate creations, we can still use additional Tinkertoy pieces to connect it.

So where are they in terms of developing the new architecture? Friedman said the business architecture is largely completed, the technical architecture is about third of the way done, and they are getting started on the information architecture. Freidman suspects it will take longer than the next administration for this IT transformation to take place, anywhere from five to ten years. Funding concerns are evident from the multiple questions raised by the audience about whether we can expect to see another round of Medicaid Transformation Grants (depends on Congress) or if the Federal 90/10 technology matches or the 75/25 administrative funding apply to acquiring EHRs in state facilities that treat Medicaid patients (it does not). Friedman said the mission should be to sustain the Medicaid transformation projects once the grant funds dry up and to use the MMIS dollars where appropriate to support efforts toward MITA and e-health. He affirmed that "there is a way to do this. You gotta have some faith, but there is some money and ways to pull this off. The real challenge is to find it."