Phased Modernization in Medicaid: A Smart Strategy for Provider System Upgrades

Author: Mason Mabry

Since its inception, Medicaid has faced challenges in engaging and retaining providers. Many of those challenges stem from the program’s inherent complexity and lower reimbursement rates — systemic issues that every provider must navigate. Implementing even simple policy changes can be cumbersome because of the time-consuming and expensive hard-coding required for some legacy provider systems. More concerning, these aging systems can often lead to data inconsistencies that degrade overall data quality. This combination of factors may lead to dissatisfied providers who then leave the Medicaid network, creating gaps in coverage for enrolled members.

Why Provider Systems Need Modernization

Modernizing provider systems and operational processes can solve many of these challenges and address several strategic goals. First, a modern system is essential for improving provider experiences, aligning them more closely with the frictionless interactions users expect. For providers, better experiences yield higher satisfaction. That, in turn, improves network adequacy and member access to care.

Second, modernization helps optimize the way limited resources are used to keep a provider network healthy and engaged. With a more modernized system, agencies can reduce their spend on basic system maintenance, enrollment operations, and implementation of federal CMS or state policy changes.

Finally, modern provider service platforms have better speed, agility, and scalability. By modernizing, agencies can adopt configurable systems and use business rules to exponentially improve adaptability. Similarly, by moving from on-premise to cloud-based provider systems, agencies gain the flexibility to throttle resources up or down depending on evolving needs.

When Phased Modernization Makes Sense

In an ideal world, agencies could modernize their provider systems all at once. While this would be efficient, it can be impractical depending on budget constraints, workforces stretched thin because of conflicting priorities, and concern about straining provider communities.

Phased modernization provides another approach for agencies that have invested significantly in legacy provider systems that remain fundamentally sound. These agencies can quickly and sustainably extend the life of their existing systems to enjoy several more years of productive use. By modernizing in phases, agencies can improve the provider experience, while also controlling costs and risks by limiting the scope of changes and their impact on the provider community.

Similarly, phased modernization can be an appropriate choice for states that have elected to delay full system replacement for any number of reasons. These may typically include competing agency priorities, budget constraints, and the need to prioritize other critical business areas, such as member services or claims processing.

Ultimately, phased modernization works best when a provider system can serve as a foundation for meaningful improvement, while the state extends its return on investment and plans for full modernization over the longer term.

Phased Modernization of Provider Systems: Five Keys to Success

If your state has identified phased provider system modernization as a strong option, make sure you include these five critical capabilities to achieve your objectives:

1. Strategic planning built through assessments and insightful analytics

Understanding your current position requires comprehensive benchmarking against key provider metrics. That includes comparing your performance against both neighboring states and national performance. Doing so demands a thorough operational assessment and comparative analytical capabilities that most states lack internally such as the ability to collect, normalize, and interpret complex performance data across multiple dimensions of provider experience.

2. Objective-driven modernization roadmap

Once you understand your baseline performance, you need expertise in provider system best practices to set objectives that are realistic and achievable within specific timeframes. That process requires deep knowledge of what’s possible with different technologies and approaches — insight that comes from extensive experience across multiple implementations and diverse state environments.

3. Real-time performance monitoring

Continuous tracking of progress requires monitoring tools, dashboards, and expertise in relevant key performance indicators (KPIs) and benchmarks. The ability to quickly identify when initiatives aren’t delivering expected results and to pivot accordingly are contingent on having a strong analytical foundation and continuous support to derive meaningful insights from the data.

4. Provider engagement and change management

Provider communities are inherently diverse, presenting with varying needs, technical capabilities, and attitudes toward change. Successful phased modernization requires providers to be engaged early and often, from planning through execution and beyond. In fact, regular communication and feedback loops aren’t just helpful; they’re essential for ensuring that improvements translate into better provider experiences.

5. Adaptable and reusable solutions

The greatest advantage of modern approaches to phased modernization lies in shared development costs and continuous innovation. By treating the solution as a product, agencies can leverage centralized research and development that benefits all users. These solutions are reusable in more ways than one. First, because they are developed once and deployed broadly through rule-based configurability, they offer a scale advantage and shift states from working on IT developmental projects to deploying products. But perhaps more critically, these solutions aren’t temporary patches; they’re modern components that bridge the gap between old systems and new ones.

Additionally, keep your eyes focused on the long-term goal of a product-based provider system. Avoid solutions that offer short-term progress that isn’t conducive to future full modernization and which burden providers with additional change and disruption. Instead, opt for phased modernization in which each of the discrete components contributes to an endgame of a modern provider solution.

A Bridge to Full Modernization

Think of phased modernization as your strategic bridge for achieving near-term improvements while building toward inevitable full modernization. The goal is to build on existing investments while systematically addressing provider experience challenges based on priority and need, ultimately gaining operational efficiencies along the way.

For virtually any state, success requires recognizing that this isn’t a simple internal project. From comprehensive analytics to specialized change management expertise, the resources required to execute in accordance with the five keys to success typically exceeds individual agencies’ capacity. The complexity of modern provider expectations, combined with the technical sophistication required to meet them, suggests the need to engage partners who offer proven experience and scale.

Learn more about how Gainwell’s provider service capabilities, including Provider Flex and our Provider modernization consulting, can help you modernize intelligently.