DATE



|Project Governance |

|Project Name |MMIS Re-Bid Project |

|Date |August 24, 2011 |

|Lead Agency |Human Services Department |

|Other Agencies |Aging & Long Term Services; Department of Health |

|Executive Sponsor |Julie Weinberg, Director, Medical Assistance Division |

|Agency Head |Sidonie Squier, Cabinet Secretary, Human Services Department |

|Agency CIO/IT Lead |Brian Pietrewicz, Acting Chief Information Officer |

|Project Manager |Mario Gonzalez, PM Bureau Chief, HSD Information Technology Division |

| |Wayne Pendley, ITPM (new hire in training), HSD Information Technology Division |

|Project Abstract (Provide a brief description and purpose for this project) |

| |

|The Medicaid Management Information System (MMIS) for New Mexico, “Omnicaid”, is operated, maintained and enhanced by a Medicaid state |

|fiscal agent who is selected by competitive bid. The state fiscal agent hosts and operates the HSD-owned Omnicaid Medicaid payment |

|application, organizes payment functions and operations for Medicaid payments to health care provides, and delivers reports on the health |

|care activities of contracted health care services. |

| |

|The federal Centers for Medicare and Medicaid Services (CMS) require HSD to periodically re-open the Medicaid state fiscal agent contract |

|to competition. CMS has also mandated significant changes to the MMIS including HIPAA2 compliance and ICD-10 remediation. In this |

|project, HSD combines the satisfaction of these federal mandates with top-priority MMIS enhancements that improve customer service, and |

|increase program effectiveness. |

| |

|The MMIS Re-Bid Project re-procures all existing services from the Medicaid state fiscal agent and modifies several subsystems. CMS has |

|approved federal funding to support the following project phases: |

| |

|Procurement Phase – Federal support for costs of the NM staff who conduct the procurement. |

|Transition Phase – Support for the transition of MMIS to the new system enhancements; and for the transition of operation from the current,|

|incumbent contractor to a new state fiscal agent if one is selected. |

|Enhancement Phase – Support for costs to remedy current system issues; improve functionality; and prepare for potential changes required by|

|healthcare reform legislation. |

|Operations Phase – Federal support for Medicaid operational and direct services over the next seven years. |

| |

| |

|While CMS has approved initial funding estimates for all four phases of this project, final budget amounts have not been determined because|

|the final vendor selection and contract negotiations are still in progress. |

| |

|HSD requests approval to proceed to the planning phase in order to negotiate a contract for state fiscal agent services using the estimated|

|amounts approved by CMS. The estimated cost for IV&V varies widely -- depending on whether the incumbent or a new state fiscal agent is |

|selected; and depending on the final set of specific enhancements selected by HSD. This certification request is conservative, seeking |

|approval for the higher range of these scenarios. |

| |

|Upon approval to proceed, the contract will be negotiated and submitted to CMS for final approval of their funds. HSD will request |

|certification from the PCC for implementation of the contract within the next 60 to 90 days. |

|Planned Start Date |May 1 2010 |Planned End Date |December 22 2013 |

|Amount Requested this Certification |$1.5 million |

|Amount Previously Certified |$0 |

|Remaining Appropriation not Certified |To Be Determined |

|Total Appropriated Amount |$1.5 million |

|Certification History (Include any previous project or phase certifications and this request) |

|Date |Amount |Funding Source(s) (use specific citations to laws, grants, etc.) |

|4/28/2010 |$0 |No federal funds were required for the Initiation Phase. Staffing and operations by |

| | |NM state employees were funded by the General Appropriation Act of 2010 (2nd Special |

| | |Session, Chapter 3). |

|This Request |$1.5 M |IV&V services on the MMIS Re-Bid project. Funding sources include 90% federal CMS |

| | |grant and 10% state funds approved by the General Appropriation Act of 2011; Laws |

| | |2011, Chapter 179, Section 4, HUMAN SERVICES DEPARTMENT, Subsection (1), Paragraph |

| | |(b). |

|Appropriation History (Include all Funding sources, E.G. Federal, State, County, Municipal laws or grants) |

|Fiscal Year |Amount |Funding Source |

|SFY 12 |$1.5 M |IV&V services on the MMIS Re-Bid project. Funding sources include 90% federal CMS |

| | |grant and 10% state funds approved by the General Appropriation Act of 2011; Laws |

| | |2011, Chapter 179, Section 4, HUMAN SERVICES DEPARTMENT, Subsection (1), Paragraph |

| | |(b). |

|Proposed Major Deliverable Schedule and Performance Measure |

|Comments: The following deliverables follow the state procurement process. The dates are only approximate due to the variable activities |

|related to the procurement. Actual budget amounts are based on past expenditures. TBD is based on amount that will be negotiated by HSD |

|with contractor and approved by CMS. |

|Major Project Deliverable and Performance Measure |Budget |Due Date |Project Phase |

|Request for Proposal (metric=Timely release) |$0 |Jan 28, 2011 |Planning |

|Executed Contract for MMIS Fiscal Agent Re-Bid (metric=Approval by |TBD |Oct 31, 2011 |Planning |

|CMS, DOIT and DFA; provision for maximum available federal match) | | | |

|Request for Proposal for IV&V on MMIS Re-Bid (metric=Approval by CMS,|$1.5 M |Nov 03, 2011 |Implementation |

|DOIT and DFA; provision for maximum available federal match) | | | |

|Executed Contract for IV&V on MMIS Fiscal Agent Re-Bid |TBD |Mar 31, 2012 |Implementation |

|(metric=Approval by CMS, DOIT and DFA; provision for maximum | | | |

|available federal match) | | | |

|Transition of Omnicaid System (metric=Timely completion with minimal |TBD |Sep 30, 2012 |Implementation |

|transition issues) | | | |

|Transition or Replacement of Peripheral MMIS Components |TBD |Sep 30, 2012 |Implementation |

|(metric=Timely Transition or implementation with minimal transition | | | |

|issues) | | | |

|Implementation of Enhancements—see p. 7 for descriptions |TBD |TBD |Implementation |

|(metric=Timely and accurate implementation of purchased | | | |

|enhancements). | | | |

|REQUIRED | | | |

|Convert to ICD-10 coding by national deadline | | | |

|Replace legacy reporting system with data warehouse | | | |

|Add client eligibility span dates to web portal | | | |

|Claim status inquiry/response for HIPAA 276/277 | | | |

|Eligibility verification/response for HIPAA 270/271 | | | |

|Develop MCO premium payments for HIPAA 820 | | | |

|Benefit enrollment & transactions for HIPAA 834 | | | |

|OPTIONAL | | | |

|Develop web-based direct data entry | | | |

|Develop web-based provider enrollment | | | |

|Develop a Medicaid client web portal | | | |

|Initiate electronic billing of other carriers | | | |

|Automated processing and posting of 3rd party liability payments | | | |

|Subrogation transaction codes for NCPDP 3.0 | | | |

| |Description |FY11 |FY12 |FY13&After |

|Staff - Internal |Some costs will be covered by CMS |$0 |TBD |TBD |

| |matching funds. | | | |

|Consulting Services|IV&V and other transition costs will be |$0 |$1.5 M |TBD |

| |determined at a later date. | | | |

|Hardware |Mainframe HW is owned by the contractor; |$0 |TBD |TBD |

| |local HW requirements and ownership | | | |

| |provisions will be determined. | | | |

| Software |Omnicaid code is owned by HSD; other SW |$0 |TBD |TBD |

| |requirements will be determined. | | | |

|Total | |$0 |$1.5 M |TBD |

|IT System Analysis (On this document, or as an attachment, provide a summary description of the technical architecture) |

| |

|The core of the Medicaid Management Information System (MMIS) is the Omnicaid payment application. Currently, the application is hosted in |

|a facility managed by the current state fiscal agent, ACS Healthcare. Other HSD systems (TIE, ISD2, etc.) interface through the Department |

|of Information Technology data center. |

| |

|To detail the MMIS more clearly, the following is a description of the Omnicaid architecture as published: |

| |

|Omnicaid utilizes a three-tiered client-server architecture: |

|Client workstations currently run Windows XP or Vista with the Omnicaid application’s PowerBuilder client presentation layer. The |

|presentation layer contains front-end edit logic. |

|The middle tier uses Sybase Enterprise Application Server as a middleware application engine. This middleware layer provides access to |

|CICS applications and DB2 on the back-end. It also provides load balancing and fail over capability. |

|The back-end processor is a mainframe IBM CICS and DB2 relational database management system. CICS connectivity is provided via MQSeries. |

|Connectivity to DB2 is provided to the middle tier and to the client workstations using IBM DB2 Connect. The mainframe processes all data |

|requests from the middle tier and client workstations, operates the claim engine, runs all batch processes and delivers a wide range of |

|reports. |

| |

|This project will produce a service contract to enable HSD to continue to outsource all Medicaid state fiscal agent activities. All IT |

|related services will be included in this Medicaid state fiscal agent contract. Upon contract award, HSD will submit the new technical |

|architecture to the TARC for review and approval. |

|Independent Verification & Validation (Include Status of IV & V Process) |

| |

|HSD intends to procure IV&V services for this project in a manner consistent with state and CMS requirements. This includes requesting |

|90/10 federal funding through an Implementation Advance Planning Document. HSD has evaluated the possibility of the incumbent winning the |

|bid or a new vendor winning the bid. To that end, it has developed two IV&V contract vehicles for the transition of the contract. The |

|major deliverables of the MMIS transition/enhancement effort will be determined as the first step in MMIS contract negotiations so that the|

|scope of the IV&V contract can be finalized, federal matching funds secured, and an IV&V vendor engaged before design of the MMIS |

|enhancements. |

|Significant Risks and Mitigation Strategy |

|NOTE: Risks and Mitigation is carried over from initial contract phase as it continues to apply to this phase. |

|Risk 1: Interruption of claims processing due to delayed transition or serious start-up issues if there is a period between vendors (the |

|procurement is organized to enable HSD to work with two vendors for a one year transition period). |

|Mitigation 1: Project schedule provides for a 12 month Transition phase to assure adequate time to complete all tasks. |

|Mitigation 2: None of the system enhancements is required to be implemented prior to the start of operations, reducing the scope of work |

|during the Transition Phase. |

|Risk 2: Failure to meet the October 1, 2013 compliance date for ICD-10 diagnosis and procedure codes if the procurement is delayed and the|

|new contractor does not have enough time to complete its tasks. |

|Mitigation 1: An ICD-10 assessment was completed through another project in 2009. A number of key business decisions were finalized by HSD|

|and several system changes are being made in conjunction with the HIPAA 2 (5010) project, including all table conversions. This has given |

|HSD a significant head start on the 2013 deadline. |

|Mitigation 2: Project schedule gives the contractor 12 months after the start of the Operations Phase to remediate the MMIS for ICD-10 |

|compliance. |

|Interoperability (Describe If/how this project interfaces with existing systems/Applications) |

| |

|The MMIS incorporates the Omnicaid claims processing component, a Pharmacy Benefits Claims Processing Component System (PBCPCS) for drug |

|claim processing, a data warehouse, and other peripheral systems that interface with Omnicaid. Any replacement components implemented as |

|part of this project must continue to interface with the core Omnicaid component. |

| |

|Omnicaid interfaces with the ISD2 system hosted at the NM DoIT Data Center to obtain client eligibility data. Omnicaid also receives |

|eligibility data from DOH (Children’s Medical Services) and CYFD (children and adults for which CYFD provides medical services). |

| |

|Currently, Omnicaid also interfaces with the Transaction Interface Exchange 3.0 (TIE 3.0) system for receipt of electronic claims and |

|encounters. However, this function will be terminated prior to the start of the new contract operations. |

|Transition to Operations: (Describe agency plan to migrate project solution to production. include agency plans to fund and maintain this |

|project after deployment. ) |

|The contract will define several project management sub-deliverables to ensure that Transition Phase and Enhancement Phase activities are |

|completed in a timely manner and that the systems as deployed meet HSD requirements. The contractor will be required to operate and |

|maintain the systems after implementation. CMS funds MMIS operations at a 75% match rate. The State share of this cost will be included in|

|the budgets for FY 2013 and beyond. |

For ease of readability and format, the following table describes the enhancements that may be procured based on negotiations and costs of the final contract. The RFP defines two categories of enhancements: (1) Required enhancements which must be completed to meet CMS requirements, and (2) Optional enhancements that will improve operational efficiency and customer service but have not been mandated by the federal government.

|Enhancement |Description |Status |

|Client Eligibility Span Dates on the Web |Allow providers to inquire on a span of dates when checking client |Required |

|Portal |eligibility instead of a single date of service | |

|HIPAA 276/277 |Implement claim status inquiry and response transactions to comply |Required |

| |with HIPAA standards | |

|HIPAA 270/271 |Implement eligibility verification inquiry and response transactions |Required |

| |to comply with HIPAA standards | |

|HIPAA 820 |Implement premium payment transactions for Managed Care Organizations |Required |

| |to comply with HIPAA standards | |

|HIPAA 834 |Implement benefit enrollment and maintenance transactions for Managed |Required |

| |Care Organizations to comply with HIPAA standards | |

|ICD-10 Remediation |Meet national deadline to convert to new ICD-10 diagnosis and surgical|Required |

| |procedure codes from the current ICD-9 standard. This deadline is | |

| |October 1, 2013. | |

|MARS Replacement |Replace the legacy Management and Administrative Reporting System with|Required |

| |a data warehouse-based system to comply with the ICD-10 standard and | |

| |increase reporting flexibility | |

|Automated Processing and Posting of Third|Modify the system to accept electronic payment transactions from |Optional |

|Party Liability Payments |insurance carriers and use the information to post payments and adjust| |

| |claims to reflect recoveries | |

|Client Web Portal |Give clients new self-service options via a Web portal, including |Optional |

| |finding service providers and selecting a Managed Care Organization | |

|Electronic Billing of Other Carriers |Replace current paper billing of other insurance carriers with |Optional |

| |electronic billing when it is discovered that a client has other | |

| |insurance coverage | |

|NCPDP 3.0 |Implement the new National Council of Prescription Drug Programs |Optional |

| |(NCPDP) subrogation transaction to bill other insurers for drug claims| |

| |when it is discovered that a client has other insurance coverage | |

|Web-based Direct Data Entry |Allow providers to submit claims electronically via the Web portal |Optional |

|Web-based Provider Enrollment |Allow providers to submit enrollment applications via the Web portal |Optional |

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