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Best Practices in Offshore Outsourcing: Strategies for Transition, Attrition, Communication, and Bridging the Cultural Gap
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Magnificent Medicaid Management
By Kathleen Goolsby, Senior Writer
Best Government
2001 Editor's Choice Award
EDS and State of Wisconsin
From the CEO:
We are especially pleased to present this award, for it recognizes a relationship that is a shining light as to what outsourcing can be. Although outsourcing in all three levels of government in the U.S. is growing by leaps and bounds, there are still some who strongly debate its effectiveness as a solution for government objectives. The State of has outsourced its challenging, ever-changing Medicaid function to EDS. This outstanding relationship has lasted for 23 years, despite different political administrations, re-bids, increasing complexities of Medicaid regulations, and changing state and federal actions. Read the story and see how EDS accomplishes flexibility in the midst of change, extraordinarily deep commitment to its customer and Wisconsin's end users, award-winning innovation and an outstanding "partnership" approach to outsourcing.
 Medicaid is one of the most controversial, complicated and expensive programs
in U.S. government. "It's very political, so there is a high level of interest,
and there is also a lot of change going on in it all the time," says Peggy Bartels,
Administrator of the State of Wisconsin's Division of Health Care Financing.
"So any entity that provides outsourcing for Medicaid is going to be in a fishbowl
environment. It's very difficult." She explains that the process of reviewing
and making determinations about whether or not Medicaid will fund services is
all done under the very close supervision and administration of the State. Decisions
are controversial. "By being our business partner, the outsourcer invites the
same criticism we receive," she adds. "They're in the bull's eye, and it is
a big challenge to do that kind of work and maintain a positive presence."
Nevertheless, EDS
took the challenge and has been the Medicaid fiscal agent in the State of Wisconsin
since their outsourcing agreement began in 1977. Bartels feels strongly that
EDS is an "excellent example of the kinds of positive things that can be accomplished
with an outsourcing supplier." No other state Medicaid contract has lasted for
a duration of 23 years. She says that Wisconsin's State government -- as a whole,
not just the Medicaid group -- regards EDS as a highly valued business partner.
It has happened for over two decades, through many different political administrations,
many different kinds of contract requirements and many different State employees.
To earn that kind of accolade, EDS is doing something far more than getting
the job done right.
Fiscal Agent Fait Accompli
Wisconsin's Medicaid $2.8 billion/year program covers about 450,000 people,
providing services to low-income families, disabled people, the aged, pregnant
women and families with other special healthcare needs. The Division of Health
Care Financing is responsible for making payments to health care providers.
The Division's goal is to purchase health care on behalf of Medicaid-eligible
persons in Wisconsin in an efficient, effective manner, and that means that
providers of those healthcare services must be paid accurately and on a timely
basis. EDS, as the fiscal agent, is to ensure that that happens.
The supplier manages the State's Medicaid Management Information System, and
that computer system has components that are mandated by the federal government.
Wisconsin's MMIS maintains information on 14 million annual health care claims.
They certify over 40,000 Medicaid providers, handle prior authorizations and
establish and maintain reference files on procedures and diagnosis codes to
assure that claims are processed accurately. Traditional fiscal agent responsibilities
also include data entry, telephone and correspondence, provision of medical
consultants to assist in the adjudication of prior authorization requests, as
well as statistical and actuarial analysis.
EDS
has had to roll with the punches over the last two decades, as Medicaid became
more complex and diverse, changing the way fiscal agents function. In the 1980s,
healthcare providers were paid for services that they billed. Now they are in
the world of managed care, with its accompanying system of prior authorization,
an electronic point of sale for pharmacies, and technical assistance to recipients.
This has added a complex customer service side to the supplier's responsibilities,
and the State of Wisconsin is the customer.
The Apple of Wisconsin's Eye
Bartels says Wisconsin's providers, recipients, and government have received
exceptional and unexpected service because of EDS' willingness to accept new
challenges that might become part of their responsibilities as a result of state
or federal action. Additionally, Wisconsin has one of the lowest claims processing
times in the nation. "Providers here expect that if they submit a claim, they
are going to get a check the next week," she says. "The claims processing through
EDS is so smooth and efficient that it's almost taken for granted."
EDS, she says, is very willing to try new approaches; and she tells of one
incident illustrating the benefits they have reaped from EDS' attitude. Another
company had established a data warehouse, but the project was failing. EDS took
over the project, started with a fresh approach toward making it more functional
and "made it into something we really hadn't even envisioned." The data warehouse
now contains Medicaid data along with immunization records, HMO records, vital
statistics and 30 other types of information; and it provides analytical support
services. Called the MEDS system, it's now a showcase for other state agencies
and won a Smithsonian Institute/Computerworld Laureate award in 2000.
Making modifications and moving forward from experience in another state, EDS
implemented a new ID card for recipients. It looks like a credit card and replaces
the paper cards that most states issue on a monthly basis. Bartels said it was
a huge project, but EDS was willing to do what it took to achieve success. The
supplier is also assisting in development of a Web site that will provide "all
of our voluminous provider bulletins and information updates for the public."
Flexibility, creativity, fresh approaches, a willingness to do what it takes,
outstanding services . . . what more could there be? She describes EDS' deep
reservoir of commitment, expertise and cooperation and believes it is due in
part to the fact that many of the EDS individuals have been with this contract
for more than 20 years. As a result, they live here and are a part of our community,
and they want this contract to stay here and be positively received by Wisconsin.
This is their home too."
With 20 years' experience, EDS also knows the Wisconsin Medicaid program very
well. "In our relationship," says Bartels, "we've seen an example of a level
of expertise and a level of commitment that is truly extraordinary!"
Lessons from the Outsourcing Primer
- Long-term buyer-supplier relationships can bring about even more commitment
to the relationship's success. Long-term relationships work best with short-term
contracts, especially when the industry, technology or buyer's goals are quickly
changing. In this particular relationship, the contract has been put out for
several competitive procurements since 1977, and EDS has won the contract
every time.
- If the buyer is in an industry where it has customers, the supplier must
be customer-service oriented.
Publish Date: February 2001
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Copyright © 2001 - Everest Partners, L.P.
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