MES Vendor Strategy: Three Essentials When Consolidating IT and Business Operations

For state Medicaid agencies, managing complex multivendor ecosystems can be costly, time consuming, and inefficient. As states work to streamline costs and improve outcomes, they are exploring opportunities to simplify and rationalize their Medicaid Enterprise System (MES) ecosystems.

With fewer vendors and well-defined “swim lanes” of roles and responsibilities, a state can take control of costs, accelerate turnaround times, and more readily adopt innovations from analytics to automation.

One such strategy is the consolidation of IT and business operations support. With fewer vendors to manage, a state can reduce its administrative burden and redirect resources to more mission-critical activities. On the vendor side, having a single, integrated team to run IT and business operations significantly improves communication and accelerates lead time, enabling greater agility in meeting daily requirements and responding to regulatory and market dynamics.

While such benefits are compelling, the decision to streamline a vendor ecosystem requires careful deliberation. How can a state be sure vendors are equipped not just to keep the proverbial lights on, but also to spark and sustain innovation over time?

Experience points to a “three-legged stool” of essential capabilities: knowledge of the system, relevant operational and technical skills at scale, and a mature delivery model.

1. Knowledge of the system

When consolidating IT and business operations support, consider the experience and knowledge of the current business operations vendor. Few individuals know an MES better than the people who spend their days using it to deliver this support. That builds deep familiarity and knowledge in how the system functions, including its strengths and opportunities for improvement. As such, a state’s current business operations vendor is uniquely positioned to collaborate with IT resources dedicated to ongoing system support and enhancement.

2. Relevant operational and technical skills at scale

A vendor that is taking over both business operations and IT must possess expertise in the architecture, language, and other technical aspects of the legacy MES. This expertise must be backed by IT talent that can scale to the diverse resource needs of a large and complex state. Depending on how an MES was developed and on which type of technology, it is critical to secure the right set of expertise.

Equally important is a track record of success in managing both IT and business operations for Medicaid programs across the United States. It’s essential to collaborate with a vendor that has a proven methodology for migrating and managing support for both business operations and IT.

3. Mature delivery model

Finally, a vendor must be able to demonstrate proven best practices for communication and collaboration, offering full transparency into the IT and business operations support being delivered.

A mature delivery model should incorporate a shared services approach that aligns resources for optimal efficiency and outcomes while maintaining some critical resources dedicated to the organization. In addition, when a state entrusts both business operations and IT support to a single, experienced vendor, that company can dramatically simplify how routine work gets done and how quickly and efficiently the state can adapt to new regulatory mandates. The right vendor can ensure faster processes and added convenience for Medicaid members and providers to get the support they need.

Strengthening stability to power innovation

Choosing vendors that deliver against all three of these requirements increases the possibility that a state will achieve its desired outcomes. And while the stability provided by this three-legged stool is critical to keeping an MES running smoothly, it’s also a prerequisite for continued innovation.

Beyond the three core requirements, look for vendors with a demonstrated commitment to collaboration and experience in applying innovation in a modular fashion. For example, there may be opportunities to add a provider management module to address goals for better provider experience and higher operational excellence. In addition, targeted automations that help reduce manual processes and error rates can yield cost reductions along with improved experience for multiple stakeholders. Similarly, insights from AI-driven analytics can help pinpoint specific opportunities to enhance performance and service delivery, enabling a state to unlock further efficiencies and innovations.  

Choose wisely

Rationalizing an MES ecosystem, including consolidating IT and business operations support, is a highly strategic decision. With the right choice, a state can meet its goals for controlling costs, enhancing experience, and improving outcomes.