Updated Medicaid Information Technology Systems Guidance: Streamlined Modular Certification for Medicaid Enterprise Systems (SMD #22-001)

Overview

On April 14, CMS released a State Medicaid Director Letter (SMD #22-001) providing updated Medicaid Information Technology (IT) guidance and requirements for streamlining the certification approach and moving toward Outcomes-Based Certification (OBC) for Medicaid Enterprise Systems (MES). The guidance introduces a Streamlined Modular Certification (SMC) process and sunsets the Medicaid Enterprise Certification Toolkit (MECT) and the Medicaid Eligibility and Enrollment Toolkit (MEET).

This guidance establishes a MES certification process for each modular component system of the MES. The MES system is composed of the sum of MES modules, which are the Medicaid IT systems used to manage, monitor, and administer the Medicaid program. The SMC approach will:

• Create measurable improvements to a state’s Medicaid program through the delivery of a new module or enhancement to an existing module.
• Use data and testing to inform CMS’s assessment of the success of delivered systems and inform decisions about future MES investments.
• Use operational data reporting for system performance, operations monitoring, and functionality.
• Reduce burden on states and CMS during the certification process.
• Advance toward an OBC process for the entirety of the MES.

Background

All applicable requirements must be met for expenditures attributable to the design, development, or installation (DDI) for an MES module to qualify for an enhanced federal financial participation (FFP) match. After the system has been in production for at least six months, states can request system certification by CMS to be eligible to receive enhanced 75 percent FFP for operations. After a system is certified, states may submit an Operations Advanced Planning Document (OAPD) requesting approval for 75 percent operations funding based on successful certification.

Elements of Streamlined Modular Certification

The SMC process for MES is structured around three elements:

• Conditions for Enhanced Federal Matching—States must ensure that the system complies with all the conditions for enhanced DDI matching and that the system remains compliant with federal Medicaid requirements for enhanced operations matching as previously mentioned.
• Outcomes—SMC process identifies two types of outcomes:
  1. CMS-Required outcomes are based on statutory or regulatory requirements and provide a baseline for requirements of MES.
  2. State-Specific outcomes focus on each state’s Medicaid program and improvements not specifically addressed by the CMS-required outcomes.
• Metrics—States must submit operational reports to CMS containing metrics annually in support of a state’s OAPD request. CMS may determine the need for some metrics requiring states to report more frequently, which will be coordinated with the State Officer.

States will be required to provide the following data, reports, and performance information:

• Demonstrations of system functionality; testing results; production reports; and plans for organizational change management.
• Evidence their module is production ready and that operations staff are implementation ready.
• CMS State Officers will work with states to conduct reviews and assessments based on metric reports.

Operational Reporting

States must submit annual operational reports to CMS containing data and other evidence that modules meet all applicable requirements for the state’s claimed federal matching funds. However, more frequent reporting on key operational metrics may be necessary and states should coordinate with their CMS State Officers to determine which modules and metrics may need more frequent reporting.

States should look to standardize frequency of reported metrics over time and submit all data in table form. CMS will leverage an online data repository through GitHub.

For previously certified systems, those operating as a system of record and those for which the state is claiming enhanced federal matching funds for DDI or operations, states should coordinate with their CMS State Officers to agree upon a timeline to begin operational reporting.

CMS may periodically review and reapprove each system initially approved for 75 percent enhanced federal matching for state expenditures on the system’s ongoing operations. CMS may review an entire system’s or module’s operation or focus on the operation of limited parts of the system or module. At a minimum, CMS reviews will look to see that the system is operating with all applicable regulatory requirements.

Transition

Feedback provided to CMS from system reviews, certifications, and other channels have shown the MECT and MEET to be burdensome while also lacking flexibility for states to implement best program practices. This updated guidance provides information for CMS and states to begin transitioning to the Streamlined Modular Certification process. There are several key components that did not exist in the MECT and MEET, such as outcomes, metrics, and operation reporting requirements (including gauges of overall project health). States are expected to work with their CMS state officers to determine the smoothest transition process to streamlined modular certification.

Certification Guidance

The certification guidance is a vital factor in modernizing and advancing certification processes and supporting better results for state and federal investments in MES. By adhering to these processes, state and federal investments will prove to be worthwhile, the state’s Medicaid administration will become more efficient, economical, and effective, and Medicaid beneficiaries and other stakeholders will benefit from the upgraded version of the MES. CMS has provided an “IT investment lifecycle” and points of interest graphic here.

CMS Certification Repository

CMS will utilize a Certification Repository on GitHub to provide states with evolving materials, state-proposed outcomes, and metrics. States will be able to collaborate with one another to learn and provide information about the MES certification process and documentation. CMS, states, and MES vendors will be able to “access current information about CMS-required outcomes and recommended metrics, create and contribute to a community of state-specific outcomes and metrics, and access examples of well-defined outcomes and metrics.” States can access the GitHub repository here.

Requesting A Certification Review

States must submit a formal Certification Request letter to request a Certification Review (CR). The letter must include the following items:

• Date at which the state formally began operating the system as the system of record.
• Retroactive certification date (date back to which the state is requesting the system be certified).
• Proposed date for CMS to begin its certification review.

In addition to the CR letter, states should provide evidence that proves that the system is prepared for the review process to start. Examples of evidence that demonstrates state preparation include the following:

• An established document repository that has been successfully tested by the CMS State Officer (the default repository is CMS Box).
• A submitted copy of the System Acceptance Letter (the state’s letter to the vendor contractor or state development team accepting the system/modules(s)).
• All submitted required operational metrics related to the module, beginning from the time the system became operational as the system of record and up until the end of the most recent quarter.
• Demonstrated compliance of the system/module for which the state is requesting certification with most current T-MSIS requirements, when applicable.

Once CMS reviews the letter providing evidence, system demonstrations, analysis of testing results, and outcomes/metrics, the state’s system will either meet certification requirements or not. If the system does not meet the requirements, CMS will work with the state to remedy the findings and prepare for the following stages. States are urged to assess MES plans with their CMS State Officers, who can offer state-specific advice.