South Carolina Awards BIS Contract: the First Multimillion-Dollar Opportunity of Many

James Samimi-FarrJames Samimi-FarrOn December 30th, the South Carolina Department of Health and Human Services (SCDHHS) indicated its intent to award the SAS institute with a substantial contract to furnish a new Business Intelligence System (BIS). The contract, finalized on January 10th, represents a $45 million dollar, seven-year commitment on behalf of South Carolina. Other bidders on the contract included Truven Health Analytics, Deloitte, Optum, and Elder Research.

This business intelligence platform constitutes part of South Carolina’s overall Medicaid Management Information System (MMIS) replacement project. A business intelligence system  comprises a set of tools and technologies to help and collect and analyze business data. South Carolina’s DHHS stated in its Request For Proposal (RFP) that its objectives were to acquire a BI system that could address its needs for the following components:

  • Decision Support System (DSS),
  • Surveillance Utilization Review Subsystem (SURS),
  • Transformed Medicaid Statistical Information System (T-MSIS),
  • Management Administration Reporting Subsystem (MARS).

Some of the key objectives of the procurement is a BI system that meets the following needs:

  • Efficiently deliver and promote a higher quality of care
  • Promote new models and modernization of care delivery
  • Manage costs and cost saving provisions
  • Provide data verification programs and quality assurance initiatives that help detect and reduce waste, fraud and abuse

Another key requirement was a BI system that includes “a robust library of algorithms” dedicated to detecting waste as well as fraud and abuse, which, though unusual for most business intelligence systems, is a common concern in the Medicaid space: fraud and abuse costs states tens of billions of dollars per year, with criminal elements, from dirty doctors to organized criminal entities stealing between 10% to 30% of the total  taxpayer money used to fund Medicaid and Medicare as well as private sector health insurance.

This story is detailed in an article in Britain’s The Economist titled: The $272 billion swindle-Why thieves love America’s health-care system. For this reason fraud detection is one of the key objectives of BI systems within the Medicaid space. As discussed in the article Applying Business Intelligence Concepts to Medicaid Claim Fraud Detection, marshalling statistical methods to detect scamming in claims payment data will be critical, together with other modern business intelligence tools and approaches. And this is in fact one of the key reasons behind CMS’ open Medicaid IT strategy. Existing monolithic MMIS platforms simply can’t do the job. CMS is looking to a modular framework and platform so that the best modern fraud detection tools can be used.

The original solicitation for this contract was issued by South Carolina’s DHHS in June 2016, which reflects a typical average for MMIS replacement projects of roughly six months between soliciting for proposals and awarding a contract.

The contract clearly reflects South Carolina’s commitment to modularity and the open Medicaid IT approach to replace its MMIS. In fact, the business intelligence module represents the first of seven that South Carolina has envisioned for its new MMIS. The contract also shows that the state is sticking to the roadmap it set for itself in May of last year, in which it imposed a deadline of early January for procuring its BI system. 

While, as mentioned above, the business intelligence system contract totals almost 45 million dollars, all told, South Carolina’s MMIS replacement project is expected to total over $200 million. As noted, this is just the first of seven modules. And this is just for South Carolina. As the first of many states that have committed to revamping their MMIS, South Carolina has just provided a concrete example of the huge potential business to be had in the MMIS space over the coming years for companies with open source, cloud-based services, and modular COTS solutions.

As states continue to issue Requests for Proposals for MMIS replacement projects, companies in the MMIS space will need to stay on top of these multimillion-dollar opportunities as they develop. Open Health News will continue to break stories about these RFPs and contracts as they unfold.