Kansas Department of Social and Rehabilitation Services Secretary Rochelle Chronister announced today that the state has issued a letter of intent to award Blue Cross & Blue Shield of Kansas a multimillion dollar contract to operate the state's Medicaid Managed Information System and perform other fiscal agent services.

Because much of the cost of both installing and operating the new information system is borne by the federal government, the federal Health Care Financing Administration must also approve the contract before it becomes final.

The contract totals $77 million for the first six years. The contract begins with an implementation year in State Fiscal Year 1996 when staff from Blue Cross & Blue Shield (BC&BS) and SRS will design, develop and test the new MMIS system. Under terms of the contract, the new MMIS system will become operational on July 1, 1996. The contract runs through Fiscal Year 2001. The state also has five optional extension years, ending in Fiscal Year 2006.

Chronister said the new contract is expected to be of great benefit to the state, to Medicaid recipients and the medical providers serving Medicaid clients across Kansas.

It has been the department's intent through this bid process to maintain effective, efficient fiscal agent services," she said. I have every confidence Blue Cross & Blue Shield can provide this work. I believe they will utilize updated technology to deliver the best possible services to Medicaid recipients within available resources."

Chronister also had praise for the work done by SRS staff, who have been working for two years on this contract. Up to 12 different teams of people from every commission within the agency worked on the fiscal agent reprocurement project, many of whom had to maintain other jobs while doing the additional work.

BC&BS will take over from Electronic Data Systems (EDS), which has been the state's MMIS system since 1978. BC&BS had the contract prior to EDS.

Chronister also praised the work done by EDS over the last 17 years.

EDS staff have had to respond to many changes during that time period, and have responded well," she said.

The MMIS system processes claims turned in by medical providers serving Medicaid recipients across the state. During Fiscal Year 1994, the MMIS system processed 8 million Medicaid claims, or about 30,000 claims a day. There are about 200,000 Medicaid recipients in Kansas and about 20,000 medical providers serving Medicaid recipients.

The state has incorporated numerous system enhancements and functional changes into the new MMIS system. These include complete replacement of the current base MMIS system. This change is necessary because the current base MMIS system, in operation in Kansas since 1978, is very difficult to maintain and upgrade.

Other major changes with the new system include the following:

*SRS plans to phase out the issuance of paper Medicaid/MediKan identification cards and issue permanent plastic identification cards. Medical providers will use the information on the plastic card to access eligibility information electronically. The new fiscal agent will pilot the permanent ID card process beginning July 1, 1996 in two areas of the state for four months and then implement the new process statewide.

*An anticipated 80 percent of the state's Medicaid population will receive some form of managed care by July, 1997. Although some changes to the MMIS system have been incorporated in the current MMIS system, many more will be incorporated into the new system. BC&BS will be required to maintain the current fee-for-service payment system as well as implement systems to accommodate capitated managed care

processing. In addition, they will be required to process consumer enrollment information, capitated payments and encounter data for managed care programs.

*The new MMIS system will allow pharmacists to immediately gain information on which drugs are covered. Medicaid requires prior authorization on some drugs before they will be paid for, but with the new system, pharmacists will be able to electronically gain the needed information immediately.

*SRS will require the MMIS incorporate an Ad-Hoc reporting and support capability that will provide special reports when needed. The reports will be available on-line in real time through computers located both at state and fiscal agent sites.

Page Last Updated: May 29, 2001