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Summary and Recommendations
T
he Centers for Medicare and Medicaid Services (CMS) is the agency
in the Department of Health and Human Services responsible for
providing health coverage for seniors and people with disabilities,
for limited-income individuals and families, and for children—totaling
almost 100 million beneficiaries. Collectively, these programs make CMS
the largest purchaser of health care in the United States. CMS inter-
acts with thousands of health care providers across the country, ranging
from individual physicians to hospitals large and small, as well as with
other providers such as ambulance services and rural health centers. The
agency’s core mission was established more than four decades ago with
a mandate to focus on the prompt payment of claims, which now total
more than 1.2 billion annually. To fulfill that role, CMS processes more
than 3 million eligibility inquiries and makes more than $1 billion in fee-
for-service payments daily.
Recent legislation has given CMS new and expanded responsibilities
for driving national improvements in areas such as the greater efficiency
of health care services, the elimination of health disparities, the support
of health care quality, the adoption of health information technology, a
drive toward value-based purchasing, and the collection and analysis of
data to promote health and wellness. CMS also has responsibility for test -
ing innovative care and payment models and for overseeing the newly
established state-based insurance exchanges.
With CMS’s mission expanding from its original focus on prompt
claims payment come new requirements for the agency’s information
1
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2 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
technology (IT) systems. These new challenges arise even as CMS must
cope with the growth of the “baby boom” Medicare population and
continue to meet challenging day-to-day operational requirements and
to make frequent adjustments to its business processes, software code,
databases, and systems in response to changing statutory, regulatory, and
policy requirements. Complicating matters further, the efforts to evolve
its systems come in the midst of changes to the nation’s health care IT
more broadly.
CMS’s ongoing operational requirements are currently being met with
a very large and complex set of hardware, software, and communications
systems that vary considerably in age, capability, and sophistication. The
ability of these systems to continue to keep up with the ongoing changes
and new missions demanded of them is an understandable source of con -
cern. CMS asked the National Research Council to review its plans for its
IT capabilities in light of these challenges and to make recommendations
to CMS on how its business processes, practices, and information systems
can best be developed to meet today’s and tomorrow’s demands.
The recommendations and conclusions offered by the Committee
on Future Information Architectures, Processes, and Strategies for the
Centers for Medicare and Medicad Services cluster around the follow -
ing themes: (1) the need for a comprehensive strategic technology plan;
(2) the application of an appropriate meta-methodology to guide an iter-
ative, incremental, and phased transition of business and information
systems; (3) the criticality of IT to high-level strategic planning and its
implications for CMS’s internal organization and culture; and (4) the
increasing importance of data and analytical efforts to stakeholders inside
and outside CMS.
The committee notes the significant benefits of modernizing and
transforming CMS IT and the costs of not doing so. CMS has an oppor-
tunity now to plan strategically for necessary advances and needs to
move quickly. Given the complexity of CMS’s IT systems, there will be
no simple solution. Although external contractors and advisory organiza-
tions will play important roles, CMS needs to assert well-informed techni-
cal and strategic leadership. The committee argues that the only way for
CMS to succeed in these efforts is for the agency, with its stakeholders and
Congress, to recognize resolutely that action must be taken, to begin the
needed cultural and organizational transformations, and to develop the
appropriate internal expertise to lead the initiative with a comprehensive,
incremental, iterative, and integrated approach that effectively and strate-
gically integrates business requirements and IT capabilities. CMS has an
opportunity now to effect these needed transformations—the technology
exists to do what must be done.
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3
SUMMARY AND RECOMMENDATIONS
CMS’S INCREASINGLY DYNAMIC AND
CHALLENGING OPERATIONAL CONTEXT
The nature, scope, and scale of the changes with which CMS is grap -
pling are significantly greater than past transitions it has successfully
weathered (such as the successful implementation of Medicare Part D,
which was itself a large challenge). The variety of new activities for which
CMS is responsible, the new legislation to which it must be responsive, the
pending proposals that it must monitor, and the changing shape of health
care broadly are all part of a highly dynamic context in which the agency
operates. Just during the course of this study, CMS was tasked with major
new efforts such as ensuring the implementation of meaningful-use regu-
lations and overseeing development of the health insurance exchanges
called for in the Patient Protection and Affordable Care Act (PPACA).
Such additional responsibilities reflect the fact that the needs and
demands of CMS’s customers and stakeholders are changing. And CMS
must manage the overall integration of its programs, processes, and sys -
tems while fighting fraud, providing the required levels of security and
privacy, and achieving new efficiencies. In addition to anticipated changes
to CMS’s own programs, the broader health care, practice, and policy
environments are undergoing significant change, including ongoing evo -
lution of technology and changes in policy expectations regarding trans-
parency, fraud resistance, timeliness, and the greater involvement of key
stakeholders. Importantly for this study, virtually all of the new initiatives
and activities CMS is being asked to cope with have significant implica -
tions for its IT infrastructure and systems. IT is at the heart of virtually
every CMS business interaction, process, and decision.
Rising health care costs are a central challenge facing the nation,
and CMS is expected to play a major role in addressing such costs and
their impact on federal spending. As the country heightens its efforts
to improve care quality and control the costs of care it will rely increas-
ingly on CMS to be at the forefront. Indeed these expectations have been
described in recent legislation. The study committee concurs with the
views expressed by CMS in meetings and discussions that serious work
is needed to prepare the agency’s business and information systems for
the future and that investment in CMS’s IT is critical to controlling costs
in the long term.
RECOGNIZE THAT A COMPREHENSIVE
STRATEGIC TECHNOLOGY PLAN IS CENTRAL
TO CMS’S MISSION AND EFFECTIVENESS
The committee agrees with views it heard from CMS and others over
the course of the study that the status quo is not a realistic option. If the
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4 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
programs CMS administers were to remain fundamentally static and the
only issue were the growth in claims volume driven by an aging popu-
lation, it is possible that CMS’s current systems could be evolved and
adapted to satisfy the anticipated growth in transaction volume. How -
ever, the programmatic requirements that CMS must meet now and in the
rest of this decade present an extreme challenge to fulfillment through the
structure of its existing systems. The necessary changes cannot be delayed
given the agency’s legislative mandates.
While the status quo is insufficient, simply urging major “systems
modernization” is also not adequate. Industry experience has repeatedly
reinforced the lesson that “big bang” approaches to systems moderniza -
tion almost always fail. Such approaches are difficult to execute and, even
when the end-state seems clear, their record of success is poor. More -
over, such approaches often ignore the fact that new systems change the
environment in which they operate, and hence the future requirements
to which they are subject. At the same time, reactive, year-by-year and
program-by-program approaches to upgrading CMS systems also will not
work to meet the new and emerging demands on CMS. There should be
no expectation on the part of CMS or its stakeholders, including Congress,
of an “ultimate” or finished CMS IT system.
Although this report focuses on information technology systems, IT
systems and the organizations that support them do not exist entirely
independently of other parts of the CMS enterprise. This interdependence
has two implications: (1) developing a coherent and effective vision for
IT is dependent on a vision for CMS as a whole, and (2) IT should be
viewed throughout the agency and by stakeholders as a central vehicle
for supporting the effective performance of CMS’s activities, businesses,
and programs. To get to a vision for future IT at CMS, the agency itself
should have a clear expression of how it intends to, or believes it will,
function in the future. Such a vision will likely anticipate CMS program -
matic extensions into quality, safety, equity, and value management and
will need to account for an increasing frequency of legislative and regula -
tory mandates that will change CMS programs and requirements. Thus,
CMS itself needs a strategic plan that is broadly accepted; it will be an
evolutionary document that will require periodic updating as mandates
are refined, experience is amassed, and the health care delivery system
as a whole changes. In concert with the agency’s strategic plan, a well-
aligned strategic technology plan is also needed.
A comprehensive strategic technology plan provides a vision to help
guide an organization as it executes on programs and projects with a
clear sense of strategic priorities, while minimizing the risk of wasting
resources on applications and projects that are redundant. A strategic
technology plan offers a strategy for the deployment of technology and
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5
SUMMARY AND RECOMMENDATIONS
clearly defined responsibilities for the use and application of technol -
ogy. The IT environment in CMS is too complex to rely on outmoded
ways to keep the CMS business functioning and thriving. To balance the
many crucial and changing demands to move the organization forward,
strategic technology planning, coupled with a business-driven IT gover-
nance process, will be needed. Instituting strategic technology planning
integrated with CMS business planning can serve as a catalyst that effec -
tively brings together the dynamics of cross-enterprise communication
and summarizes key, relevant data to inform decision making.
CMS’s Office of Information Services (OIS) has developed or is in
the process of developing many components of a strategic technology
plan as outlined here. The plan and meta-methodology described in this
report are a generalization of that described by OIS itself in, for example,
its enterprise and shared services plan, enterprise data environment, and
OIS-wide architectural and life-cycle guidelines, among others. OIS has
articulated the need to formalize and define services that can be shared
across its various businesses. The documents seen by the committee also
suggest a governance model that spans the business and IT organiza -
tions, involving all stakeholders. The committee applauds this direction
in CMS, and nothing said here should contradict the ideas expressed in
those documents. The committee uses its own terminology in this report
only for consistency and clarity.
Recommendation: CMS should develop a comprehensive strate-
gic technology plan that supports and extends the ability of CMS
to achieve its envisioned mission. Particular emphasis should be
focused on ensuring that CMS has the necessary data, information,
and IT capabilities to effectively implement legislatively mandated,
value-based payment programs.
The plan should articulate an IT vision consistent with the evolving
mission of CMS as mandated by Congress, and cognizant of a rapidly
evolving health care system. The plan should be fundamentally informed
by the various stakeholders in CMS IT and by a clear and comprehensive
view of both the current state and projections of the future state. The plan
should be broadly communicated both within CMS and to all of its stake -
holders and serve as a roadmap for future IT initiatives.
The CMS strategic technology plan should:
• Be evolutionary and incremental.
• Explicitly articulate CMS’s core technical competencies and con-
sider what IT functions and activities might be carried out by the private
sector or other public agencies.
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6 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
• Identify as many shared services as possible and create a shared
services model across all CMS business organizations.
• Emphasize systems leveraged across programs to reduce unneces-
sary redundancies; emphasize using existing proven technologies wher-
ever possible; and prioritize standards-based solutions.
• Include an enterprise architecture framework; explicit prioritiza-
tion and a roadmap; an assessment of human capital requirements; and
periodic planned review and iteration of the plan itself.
A strategic technology plan for CMS is needed against which to plan,
act, and make ongoing refinements based on experience. The rationale for
the development of such a plan is multifaceted; the plan would:
• Rationalize the process of making the difficult, and necessarily
long-term, decisions about systems replacement, evolution, moderniza -
tion, and transformation.
• Contextualize the funding requests for IT and provide a mission-
driven rationale for and prioritization of individual initiatives and fund -
ing requests.
• Drive toward coordination of efforts to garner increased efficiencies.
• Ensure that the entire complex organization and its stakeholders
understand the overall direction and intent of use of IT at CMS.
• Identify long-term needs for resources, and align those resources
effectively.
• Mitigate execution risk; in large organizations, many projects fail
because of failure to recognize the coming interdependencies.
• Facilitate the alignment of the core and contracted parties.
Not only is federal IT management—and IT management, in
general—notoriously difficult, but federal budget constraints and fund -
ing models also place additional pressure on agencies to maintain, and
even increase, productivity in spite of limited financial resources. Agen -
cies such as CMS are typically not allocated sufficient funds to modernize
or upgrade existing systems in an enterprise-wide integrated fashion,
and as a consequence must cope with the dual challenge of (1) program-
by-program stove piping that makes it difficult to properly integrate
programs or achieve the efficiencies (programmatic and operational) that
would result and (2) inconsistent year-by-year funding that makes it dif -
ficult to do long-term planning of the sort possible with capital budgets.
A sustained funding approach is needed that recognizes the benefits of
investment in enterprise-wide modernization and transformation over
the long term.
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SUMMARY AND RECOMMENDATIONS
Conclusion: To achieve the needed modernizations and transforma-
tions that are basic to the realization of CMS’s vision and execution
of its strategic technology plan, a sustained, predictable, and appro-
priate investment is needed, including investments in enterprise
information technology infrastructure and integration. Without
such investment, CMS’s modernization and transformation efforts
are unlikely to succeed.
A forward-thinking strategic technology plan is essential to coping
with ongoing changes in mandates and requirements both now and in the
future. At the same time, there are also mandated near-term activities that
cannot wait for a comprehensive plan and should be addressed now. It is
important, however, not to completely decouple efforts to meet immedi-
ate needs from long-term thinking. There are benefits that accrue from
linking long-term planning to fast-track programs: for instance, reinforce-
ment of the need for some pragmatics in longer-term planning efforts and
clarification of the urgency of the longer-term planning efforts so that they
do not drag on indefinitely. Shorter-term efforts may have to be thought
of as prototypes of a sort, aimed at gathering the more precise knowledge
needed to serve as the basis for more solidly conceived and implemented
permanent solutions to be implemented in subsequent iterations.
Recommendation: In parallel with developing a strategic technol -
ogy plan, CMS should undertake fast-track efforts to satisfy imme-
diate and near-term needs and mandates. These efforts should be
well defined and constrained in scope and, to the extent possible,
serve as a testing ground for longer-term strategic choices.
EMBRACE A COMPREHENSIVE, INCREMENTAL,
ITERATIVE, AND PHASED APPROACH
A strategic technology plan lays a foundation and articulates a vision.
But just as important is a comprehensive operational approach to mod -
ernization and/or transformation of the information infrastructure and
systems. For the purposes of this report the terms “modernization” and
“transformation” refer to two ends of a spectrum of possible transitions
for components of an information system. Modernization refers to mod-
est or evolutionary transitions; transformation refers to significant or
revolutionary transitions. The committee’s discussion of modernization
and transformation is presented at an abstract (meta-) level that sets forth
conceptual models for business roles and processes.
The approach to modernization and transformation recommended in
this report has two phases. The first phase focuses on the modernization
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8 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
or transformation of the business aspects of CMS and the establishment
of a plan for the business systems (the people, processes, services, and
information required to operate and meet all the business requirements of
a specific CMS business role), in the process defining the business require-
ments. The second phase focuses on the modernization or transformation
of CMS IT systems, is guided by the plan for the business systems, and
creates a plan for the information systems (the systems required to build,
develop, operate, and evolve one or perhaps multiple business systems).
Both phases follow the same pattern: (1) understand the source sys-
tems of interest and how they interrelate, (2) choose a starting point—a
component to be transitioned, (3) understand the relevant target systems,
(4) develop a mapping between the source and the target systems, and
(5) implement the mapping and transition. At that point, choose the next
component to transition and iterate through the cycle again—recognizing
that the source systems of interest will have changed based on the results
of the transition. Iteration, an incremental approach, and, perhaps most
importantly, the strategic integration of business and IT are fundamental
to the recommended meta-methodology.
At the end of each roll-out, the incrementally updated target becomes
the source for the inevitable subsequent efforts needed. This is true at
both the business and the information system levels. That is, this process
will repeat indefinitely in an iterative fashion as each transition task is
accomplished. The source and target systems will be in a state of constant
change that will have to be accounted for at each stage of the iteration.
Each of the transition tasks should begin tactically, by looking at the most
critical systems, and build to a more complete view. Representatives of
the relevant business roles and functions, as well as those with relevant
technical specializations, should be involved in the process.
Recommendation: CMS should plan and execute the incremental,
iterative, and phased modernizations and/or transformations of its
business systems and their corresponding information systems,
documenting and integrating business and information technol-
ogy requirements within a comprehensive enterprise architecture
framework.
One element of CMS’s transformation will be to build on cur-
rent work on data modeling to move toward a more consistent health
information model that can guide all work and ensure more uniform
conventions to support system integration and standardization. With
such a model in place, the expensive task of creating customized, one-
of-a-kind interfaces between disparate systems can be simplified and
may be eliminated altogether. Data could be more integrated and more
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9
SUMMARY AND RECOMMENDATIONS
shareable internally, and when necessary, externally. In addition, the
time to create and the cost to build new systems, integrate legacy sys -
tems, or extract data from any system could be improved. Having a
more comprehensive health information model for health care data in
the organization would also help ensure that any future systems being
developed will follow well-articulated semantic and syntactic interoper-
able guidelines and standards, which themselves may be modified and
adjusted over time as needed. The development of such a model will
take time and will require frequent iteration and continuing evolution.
Recommendation: CMS should develop, implement, and maintain—
revising and updating on an ongoing basis—an enterprise-wide
health information model as the agency’s authoritative information
model representing the structure and content of all shared infor-
mation that is created, collected, maintained, used, and exchanged
across the organization and with external partners.
EMPHASIZE ACHIEVING CULTURAL AND
ORGANIZATIONAL TRANSFORMATION
The organizational environment and cultural acceptance of major
changes in the roles, use, and architectural assumptions of IT systems
and processes bear significantly on the success and effectiveness of mod -
ernization and transformation efforts. If the need for modernization or
outright transformation is inadequately understood, especially by CMS
organizational leaders or the users and stakeholders who will be most
affected, even the best-intended and well-designed projects may fail.
Thus the kinds of changes in IT outlined above have to occur in the
context of both internal adaptations in the CMS organization and a cul-
tural adaptation that embraces the notion that CMS’s business functions
are intrinsically tied to IT. IT is not simply a support service and mecha -
nism for implementing programs but rather an integral component of
the strategic directions of the agency. CMS has special challenges in this
regard, because its agenda and priorities are often defined by external
forces such as new legislation. But much of how CMS does what it does
is determined internally, based on organizational structures, planning and
decision-making conventions, internal availability of staff and resources,
and relationships.
In the committee’s view, there are related cultural and organizational
transitions needed at CMS that would have positive repercussions for
nearly all of CMS’s activities:
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10 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
• A cultural shift from viewing IT as simply an operational necessity
to embracing IT as a critical strategic element;
• A cultural shift away from viewing IT leadership as overseeing a
support group, complementing but not an integral part of the leadership
mainstream, and toward viewing IT leadership as playing a key role in
planning, designing solutions, and advising CMS business leaders regard-
ing suitable approaches to their own responsibilities;
• An organizational shift from a mission centered on transaction
processing to a mission centered on data, information, and information
management;
• An organizational shift from a focus on paying claims to a focus on
driving a combination of payment with improvements in quality, safety,
and equity of health care and outcomes for individuals and populations;
and
• An organizational shift from relying on heroics from IT staff to
ensuring a sustained investment in and commitment to infrastructure,
resources, and staff.
The committee believes that in order to meet emerging and future
needs, CMS should undergo an organizational and cultural transforma -
tion, actively integrating IT as a strategic partner in its business and
deepening its internal IT core competency critical to CMS in several areas.
Recommendation: CMS should integrate high-level IT leadership
into CMS’s general strategic planning to ensure participation of
IT and harmonization between the strategic technology plan and
CMS’s overall strategy at the highest levels of the agency.
IT strategic planning requires engagement and ownership at the high-
est levels of the CMS organization and cannot be effectively driven by
CMS’s IT organizations alone. As indicated by information the commit -
tee gathered, CMS recognizes the importance of this engagement and
is taking steps in this direction. Historically IT has been viewed, both
in industry and government, as a tactical resource. Experience and the
literature have both shown, however, that it is not possible to make stra -
tegic decisions without considering the impact on IT and the impact and
potential of IT.
Given the strategic and operational importance of IT in CMS, the
highest levels of the organization should be involved in the governance
of the transition. High-level governance efforts should ensure that the
systems modernization and transformation efforts achieve CMS’s goals.
In addition governance should provide direction with respect to major
changes to core processes, resolve policy issues raised by the implementa-
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SUMMARY AND RECOMMENDATIONS
tion, address problems encountered during the transition, and approve, if
necessary, the commitment of additional resources. IT governance should
be developed to oversee the full set of CMS IT strategies, policies, and
operations. The governing body that serves this function should be led by
a senior business leader at the agency, and members of the body should
be drawn from the senior leadership team.1 The governance function
should include business integration, alignment of business and IT, col -
laboration, strategic coordination, and planning—rather than focusing
solely on operational and technology considerations. This function should
have primary responsibility for developing CMS’s strategic technology
plan, implementing the proposed meta-methodology, and managing the
change process.
In particular, governance mechanisms should be established for
shared services, enterprise architecture framework, and the health infor-
mation model. The transformation and modernization efforts are critically
important to the agency; thus IT governance bodies should be structured
so that senior leaders, including the CMS administrator, are well aware
of the needs and efforts underway, are willing and able to integrate the
planning into their business thinking, and are well informed so as to take
advantage of opportunities that such planning provides.
Adjusting the role of the Office of Information Services to better
reflect the criticality of IT to agency strategy will be important. From an
organizational and cultural perspective, an important part of the solu-
tion will be clear, continuing, and effective communication, not only at
an operational level but also at a strategic level, between IT leadership,
senior leadership, and the other CMS units. A first step is membership
of IT leaders on the relevant internal committees—including those that
oversee and set directions for the CMS organization at the highest levels.
The agency’s chief information officer has to be an active part of the top
management team for the agency—included not just on the organizational
chart but also at the table when major operational and strategic decisions
are made and contributing fully to the broad management of CMS.
Both planning meetings about long-term strategic goals and day-to-
day planning meetings regarding business requirements and the appro-
priateness and feasibility of IT solutions should involve and expect the
contributions of IT leadership. As with the development of CMS’s stra-
tegic technology plan as a whole, these processes must be iterative as
1 CMS currently has several IT governance bodies, e.g., the Executive Steering Committee,
Information Technology Investment Review Board, and Configuration Control Board. These
bodies are important. However, they focus largely on technical, tactical, and operational
issues, as opposed to more strategic or policy-related issues at the intersection of business
needs and IT.
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12 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
experience is gained and as new requirements arise. In the absence of IT
leadership, major strategic decisions can be made without recognizing the
IT opportunities or challenges that are involved, resulting in either missed
opportunities or poorly informed plans that project unrealistic expecta -
tions onto the IT staff or infrastructure.
CMS would benefit from the counsel of leaders from organizations
in the public and private sectors that have effected significant IT-enabled
organizational transformations. Inevitably, CMS will encounter issues and
challenges for which the advice and insights of others who have tackled
similarly scaled transitions would be very useful. Given the complexity
of CMS’s environment and mission, it is important that those insights be
as well informed as possible about the agency’s efforts and activities as
well as its broad stakeholder communities. Developing such knowledge
will require time and engagement on the part of the advisors in order to
develop a deep understanding of CMS. An advisory panel of such leaders
should be formed and structured in a way that enables them to obtain a
clear understanding of CMS and its challenges and that fosters the frank
exchange of ideas on an ongoing basis.
As for other federal agencies, the context is complex within which
cultural (attitudes, experiences, beliefs, and values of an organization)
and organizational (structures and processes) transformation will occur
at CMS. The agency will have to address the core components of business
transformation—people (including external stakeholders and Congress),
processes, and technology—all while operating under intense public scru-
tiny, coping with federal funding idiosyncrasies, and adjusting to frequent
leadership transitions.
Recommendation: CMS should rapidly and coherently continue to
improve its overall information technology and business process
governance structures and to better integrate them as follows:
• The Office of Information Services should be fully involved
from the start in discussions with CMS business units regarding
new requirements, programs, and processes.
• OIS should assume and be given more direct oversight
and coordinating responsibility over the agency’s enterprise IT
resources, including coordination and communication of business
requirements.
• CMS should institute ongoing access to and dialogue with
individuals and institutions from public and private sector organi -
zations that have experience in designing and implementing large-
scale IT-enabled modernizations and transformations.
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SUMMARY AND RECOMMENDATIONS
Enhance Crucial Skill Sets—Technology, Informatics, and Innovation
CMS’s development of its strategic technology plan and implementa -
tion of the committee’s recommended meta-methodology will require the
introduction of new skill sets into CMS and the strengthening of existing
skills—in particular in the areas of technology and management of tech -
nology change, and informatics. There are also opportunities to enhance
the role of CMS’s new Innovation Center.
CMS’s IT organization should be augmented and changed in some
key areas. In the committee’s view, the CMS IT staff’s current commit-
ment to the CMS mission, to getting the job done, and to the welfare of
the public is notable. The group has shown unusual resourcefulness and
inventiveness in successfully executing a number of difficult projects
under significant time pressures, overcoming the challenges of outdated
software and enormous complexity, and largely recognizing the need for
positive organizational and cultural changes such as those outlined in
this report. Moreover CMS’s staff continues to manage well a massive IT
operation. To enable an effective response to the near and intermediate
demands of payment reform and other responsibilities placed on CMS,
these existing competencies should be strengthened.
The evolving CMS mission hinges on public trust, and maintaining
patient privacy and data security is one component of that trust. CMS
must provide secure IT services to maintain patient and provider privacy.
Creating a truly secure system can be especially challenging in an IT
environment fashioned by disparate subcontractors, especially when the
competing goals of access, openness, and transparency are implemented.
The recruitment, retention, and training of IT professionals within
CMS must reflect not only technical skill requirements but also organi -
zational, management, and planning capabilities. The ability to manage
subcontractors is critical, but so also is the ability to manage and respond
to internal CMS organizational and cultural issues. Although soliciting
and receiving advice about technology from contractors can be useful, the
ultimate decisions about which technologies should be explored, evalu -
ated, and deployed must reside with CMS and should be based on the
judgments of people whose principal obligations are to CMS and the suc -
cess of its missions and who can draw on deep insights and expertise in
IT. Key decisions need to be made by the agency itself, and those decisions
must be rooted in a strong grasp both of CMS issues and considerations,
and also be informed by a strong grasp of technology. At its most funda -
mental, in addition to enhancing and expanding the capabilities and role
of IT at CMS, management of large-scale change will require the focused
attention of the CMS leadership and the involvement of all CMS staff and
its contractors.
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14 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
CMS’s customer and stakeholder base will continue to change, espe-
cially with a PPACA-mandated emphasis on clinical care quality and
safety as well as health promotion and increased efficiencies and cost sav-
ings. The demand for CMS-managed data to support research and other
external analytical purposes continues to grow and may change in both
character and volume. In particular, the field of biomedical informatics
(the scientific discipline) and its application in clinical and public health
settings (health informatics) are highly relevant to the current and future
needs of CMS and its IT planning, design, and implementations.
As a component of the organizational transformation needed to meet
emerging demands, CMS should enhance its capacity in the informatics
field, with clear roles in IT design and strategic planning. Informatics
experts bring both technical knowledge of computing and communica -
tions and a health professional orientation—many are also trained in
one of the health professions, and all have substantial exposure to the
processes, workflow, sources of error, and culture of health care as well
as an understanding of the subtleties of real-world applications and their
implications for quality of care and patient safety. Informatics organiza -
tions generally exist separately from the related IT organization and typi-
cally provide internal support in the form of analytical capabilities, taking
into account the broad mandates and functions of an organization and
tying them together both tactically and strategically, and they can help to
bridge the technical and business functions of an enterprise.
The creation of the CMS Innovation Center, mandated by Congress
under the PPACA, has provided an excellent opportunity for the agency
to propose, test, and evaluate new concepts that may influence the direc -
tions of the organization for years to come. Although the emphasis thus
far has been on new payment models that could enhance quality while
reducing costs, the center’s authorization includes investigation of new
models of service delivery. Given the close relationship between IT infra -
structure and the CMS enterprise information architecture, the committee
believes that the Innovation Center could also be investigating innovative
IT to support CMS’s mission. This prospect becomes particularly intrigu -
ing and attractive in light of the new PPACA mandates to move into areas
related to quality, equity, safety, and maintaining the public’s health. For
example, CMS still has to decide how best to respond to the new man-
dates for gathering clinical indicators, and the Innovation Center could
play a key role in exploring those options.
Recommendation: CMS should enhance and strengthen the agen-
cy’s capabilities as follows:
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15
SUMMARY AND RECOMMENDATIONS
• Enhance or extend the skills of CMS staff in data management,
architecture management, technology infrastructure management,
technology investigation and evaluation, and security.
• Build a dedicated capacity in informatics, placing such experts
in strategic and planning roles that complement those provided by
the IT organization.
• Explicitly broaden the activities of CMS’s Innovation Center
beyond exploration of payment models to include the exploration
and evaluation of creative information technology and informatics
opportunities that will support the mission of the agency.
ANTICIPATE A DATA-CENTRIC FUTURE
CMS’s role in the U.S. health care mosaic will be pivotal as the nation
shifts to improved approaches for organization, payment, consumer
engagement, understanding of bioscience foundations of health, and data
management for health care. This transition will take place over many
years, but some key shifts are already underway. At every stage, the
capacity to improve decision making throughout the entire system will
depend on having not only access to timely data but also the capacity to
transform the raw data first into information and ultimately into intel-
ligence to support future planning and action.
CMS is in the process of transforming itself from being focused
primarily on retrospective payment for health services for segments of
the population to a focus on clinical data, information, and informa -
tion management while still fulfilling its traditional mandates. Several
trends in health care illustrate this broad need for a more data-centric
approach, including the diffusion of electronic health records (EHRs),
changes in practitioner relationships, efforts toward comparative effec-
tiveness, monitoring for improvement of quality and reduction of dis-
parities, and increased consumer access to and demand for health and
medical information.
In the aggregate, these trends regarding data will interact in ways to
produce both additional work and new requirements for CMS. While the
ultimate result of this convergence is not completely known, the drive to
achieve great value for health care for both individuals and populations
is not at all likely to abate, especially in light of the demographic pres-
sures and size of the financial investment the nation is making in health
care services.
Data are essential to and underpin nearly all of the efforts CMS is
undertaking—and are an essential driver for the development of a CMS
strategic technology plan, motivate the recommended meta-methodology,
and are a key impetus for the organizational changes discussed above.
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16 STRATEGIES AND PRIORITIES FOR INFORMATION TECHNOLOGY AT CMS
The discussions above are all driven, at least in part, by CMS’s new
and changing relationship to data and information: the data and infor-
mation collected by CMS are now used extensively within the agency
for analytic purposes, such as various quality efforts, policy analysis,
combating fraud, informing consumers, managing payments, and, more
recently, understanding racial and ethnic disparities and contributing to
their reduction.
In addition, outside researchers, many of whom are investigating
quality-related research questions, currently make extensive use of the
data sets generated by CMS, although there are concerns about access
related to timeliness and expense. Many of the modernization and trans-
formation steps discussed throughout this report will make data integra -
tion easier (for example, integrating the reports from Medicare Managed
Care with those from fee for service), leading toward earlier release of
data. Much earlier release of survey data will support the best use of this
important information. However, approaches to gathering this data and
sorting out how to make it available and to whom cannot be envisaged
adequately until all stakeholders have been engaged and are contributing
to the discussion on an ongoing basis. Doing that incremental and ongo -
ing engagement is part of the committee’s recommended approach and is
essential to devising future mechanisms for data management.
Recommendation: CMS’s strategic technology plan should support
CMS’s own needs for data and also take into account use of CMS
data by other authorized users for research and analytic purposes.
With it CMS should:
• Clearly articulate the process by which claims-based and
clinical data furnished by providers that receive meaningful-use
incentives will be made available to authorized users for analytic
purposes.
• Collaborate with the health services research, equity-focused,
and quality communities to define claims-based, clinical, survey,
and other data sets that can be made available in a more timely
fashion.
CONCLUSION
The urgency of the challenges faced by the nation regarding the cost
and quality of health care, and the central role that CMS plays in meeting
these challenges, spotlight the need for a 21st-century information infra -
structure at the agency. The committee’s recommendations are offered not
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SUMMARY AND RECOMMENDATIONS
only to CMS, but also to Congress, and CMS’s stakeholders. Indeed, every
American has a stake in the success of CMS’s efforts. CMS must cope with
frequently changing demands, continue to operate its core functions at
scale, and modernize and transform its systems and culture to handle
new demands, all while facing a constrained and uncertain funding envi-
ronment. Sustained funding and appropriate integrated governance will
enable the agency to meet the demands that the nation is placing on it.
Critically embedding IT in strategic conversations and planning at the
agency is also essential. CMS should develop a comprehensive strategic
technology plan that is well aligned with the agency’s overall strategy
and that embraces a comprehensive flexible, incremental, iterative, and
phased approach to business process and system transformation, in the
service of its important national mission.
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