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.
About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].