Is it time for a change?

In this time of pandemic, states are counting on their data systems to perform. More than ever, it’s critical they’re well-maintained and optimized — delivering the insights needed to fight COVID-19.

With the demands put on state Health and Human Service agency IT systems and applications, modifications and enhancements are commonplace. 

Now is not the time to stick with inefficient or ineffective systems or vendors. But are states ready to take on the potential cost, risk and time it takes to make the switch? 

The case for change

Agency leaders often feel locked into existing contractor relationships, and it goes far beyond any contractual obligation. “The general perception is that the vendor who developed the system has the knowledge and no one else can replicate that,” says Virendra Yadav, Optum vice president of State Government Solutions.

It’s a perception Yadav says states should reconsider. For some vendors, their true expertise lies in the building and installation of the system. They may not be the right partner for ongoing M&O work. Even so, states are understandably apprehensive to change.

There’s the perceived risk of switching away from a vendor that currently has custody of all the state’s data. There’s also concern over the time it takes to transition and the potential loss of productivity. The perceived risk of cutting ties with incumbent vendors often prevents agencies from considering it — even in cases of extreme dissatisfaction.

But states don’t have to settle for “just OK.” They can and should embrace the benefits of transitioning. It often far outweighs any perceived risks — especially considering that, with the right help, risks can be reduced or eliminated.

M&O vendor change can bring opportunity

There is precedent for migrating Health and Human Services M&O over to a new vendor. Optum currently provides M&O services in Massachusetts, Vermont and West Virginia. 

“We have taken over systems which were developed by someone else,” Yadav explained. “And we do the maintenance and operations in a much more cost-effective fashion.”

In West Virginia, Optum took over for a vendor that had been doing the M&O work for 20 years. Because of a complication in the previous vendor’s contract, it had to be done fast. 

“We were able to do the transition within a month,” says Yadav. “We have been executing, augmenting, and operating that system for three years now at less than 50% of previous costs.”

After it switched M&O vendors, Vermont saw its highest ever batch enrollment success rate. That’s just one real-world example of how outsourcing M&O work can be more efficient, less costly and improve administrative outcomes.

Finding a qualified M&O vendor

How does a state find the right M&O vendor to meet their needs? Agency leaders should consider looking not just at the services they offer. They should also look at the skills required to deliver those services. A few key examples:

1. Possess the expertise, capabilities and knowledge to manage the information transfer. For Health and Human Services agencies, this means a background in health care and HHS eligibility so they can handle challenges unique to the industry.
2. Have established processes and practices around data protection and security that meet industry best practices.
3. Evidence the vendor can stabilize the system — by identifying key gaps, pain points or weak points, and resolve them, ensuring it’s ready for peak-season traffic.
   
4. Evidence the vendor knows how to transform the system by:
   
   • Implementing best practices and tools
   • Taking advantage of improvement opportunities
   • Conducting root cause analysis
   • Establishing a corrective action plan

These attributes are key to a smooth transition with minimal system disruption.

Before selecting a M&O vendor, Yadav recommends considering the following:

• The additional value and versatility a M&O vendor could provide
• Expertise and track record of a M&O vendor
• The arrangement and cost of exiting the current outsourcing contracts

Timing a vendor transition

If a state decides it is time to switch vendors, timing is key. In an ideal situation, the process begins at least six months to a year ahead of the current contract renewal.

The first step is to analyze the contract with the existing vendor and determine exit options. States can then solicit bids from vendors. Understanding the timeline for awarding a new contract can prepare you for a successful transition.

A new vendor will also need time to conduct a knowledge transfer with the outgoing vendor. That can take several months depending on the expertise of the new vendor in transitioning the system.

The most important consideration is the people who rely on these systems for critical benefits. The changeover needs to happen at a time and in a manner that won’t interfere with business, eligibility enrollment or care coordination, or cause eligibility system outages or other disruptions. 

Guidance is available

If states need help determining whether their current vendor is meeting their needs, there are options for determining that objectively.

“If a state would like an outside opinion, we can evaluate and advise on the health of the system and estimated costs to run it.  Or if they want to explore options in helping their vendors perform at a certain level, we can provide that guidance as well.”

“Transitioning vendors may seem daunting, but it can be done. Optum has done it,” Yadav adds.

Optum has partnered with states to manage data and systems for more than two decades. We help improve outcomes and prevent eligibility system incidents and outages. To learn more, click here.