Colorado Health Benefits Exchange

Colorado Health Benefits Exchange IT and Implementation Committee Strategic IT Decisions November 28, 2011

Overview • Comments/Feedback from Board Meeting • Review Gameplan Leading to Initiation of Formal Acquisition Process • Discussion of Items in Eric’s 11/28 email • Steps Leading up to 12/12 Board Meeting and Key Decisions • Asset Acquisition vs. SAAS Model • Alternatives • Criteria • RFI Process • Proposed Acquisition Process • RFP vs. RFQQ vs. RFI • Major Activities and Timeline • Evaluation Criteria • Evaluation Committee • “Optimal” Level of Interoperability between COHBE System and Business Processes and State Eligibility Systems and Business Processes

Three Strategic IT Questions that Need to be Answered over Next 30 – 60 days Should the Exchange use a SAAS model or acquire (borrow/build/buy) the capital IT Exchange assets? What is the “optimal” level of “interoperability” and coordination with the State’s Medicaid/CHIP systems, business processes and existing customer support services? With respect to #2, does the State intend to upgrade or replace CBMS so that near-term investments to modify CBMS and PEAK to meet the requirements of healthcare reform are rationalized against the State’s strategic direction?

Review gameplan and interim decisions leading up to 12/12 Board meeting

Discussion of Eric’s 11/28 Email As a follow up to our first committee call, I wanted to see if staff has or is considering reusing and collaborating with other nearby and Level I grant recipients. I had the opportunity to spend some time with Dwight Fine, who is currently leading Missouri’s Health Insurance Exchange efforts as well as their Chairperson, Jeff Bond, CEO Cox Health Plans. Cox is a client of mine and Jeff asked if I would spend some time to discuss our mutual State’s progress. I made it clear I was not representing the COHBE or the board but more so to discuss progress and areas of concern. Some key observations: 1. They are using KPMG to assist in the technology requirements and initial RFI – are we considering an RFI or straight to RFP? Sometimes RFIs are helpful to help develop your RFP requirements. As you can see from the attached 175 page document, Missouri has already done an exhaustive evaluation of customer service, functional, and system integrators. I would be interested to see how our vendor list aligns to MO. Executive Director’s call. Current plan is to hire IV&V vendor for periodic oversight after receiving Level 1. GMS has extensive knowledge of ACA subject matter and related IT from interacting with multiple states, CCIIO and CMS over the past 12 months. Is there is time to retain KPMG or other consulting firm prior to receiving Level 1 funding and maintain schedule? (see Proposed Acquisition Process slide #9.). In RFI process now. Solution demonstrations and RFI for each vendor performing demos, then RFP. RFPs and requirements available from other states and accessible via the CCIIO CALT. 2. We discussed the concept of collaboration – Dwight said he is on HHS Level I grant calls and they are less geared toward state collaboration more so interpretation of HHS proposed regulations. Areas of collaboration – commercial insurance front-end design, hosting management, enrollment interfaces, etc. We also agreed that collaboration would be limited in scope given state by state Medicaid and benefit design variations. Agree.

Discussion of Eric’s 11/28 Email 3. Jeff mentioned that they are behind Colorado on HBE law so as Chairman, he is positioning a back-up plan to leverage their Level I grant to invest in their exchange Medicaid capabilities – an investment they need to make regardless of the outcome of state exchange law. I have attached technical requirements and architecture materials Dwight sent me (all available on their website) and he indicated we are free to reuse all or part of the attached materials. It also includes a detailed status update they provide to HHS as a component of their Level I grant. Great. Will review and glean what is applicable from MO as well as from other sources, i.e. CALT. As we discussed, there is a race for vendor mindshare, it would seem that collaborating on RFPs and even perhaps architecture is worth further evaluation. The other consideration would be using a firm like KPMG that has the benefit of working for many states and can provide existing best practice on our behalf. Either option would seem to reduce cost and increase speed to market. Not sure how to collaborate on RFPs other than using applicable work products. Acquisition timeline is extremely tight. May have an opportunity to collaborate on MAGI eligibility process, but prefer that this capability is acquired in the COHBE system (which is likely to be common between COHBE and HCPF; see slides #12 - #16) Link to RFI announcement on MHIP website: http://www.mhip.org/bidding-opportunities.html

Acquisition Process • Three major solution components must be procured: • Exchange technology solution (acquire/license or rent) • Exchange technology solution hosting (outsource) • Exchange administrative and customer support services (outsource) • Asset acquisition (with federal funds) likely to result in lower sustainability costs vs. SAAS model which has lower upfront costs but higher operational costs; however, starting to see significant decrease in SAAS solution providers price points • Recommend bundling (single procurement) for #1, #2 and #3 • This will require some vendors to “team”; but recommend a single “prime” contractor • Procurements will be: • Well-structured • Efficient • Competitive • Fair • Transparent

Acquisition Process • As mentioned COHBE is currently in RFI process (see attached RFI) • RFP vs. RFQQ? • RFP An RFP is a solicitation sent to potential suppliers with whom a creative relationship or partnership is being considered. Typically, the RFP leaves all or part of the precise structure and format of the response to the discretion of the suppliers. Indeed, the creativity and innovation that suppliers choose to build into their proposals may be used to distinguish one from another. • RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a perspective. If there are specific problems to be addressed in the RFP response, those are described along with whatever root cause assessment is available. • RFQQs are best suited to products and services that are as standardized and as commoditized as possible to make the suppliers’ quotes comparable. An RFQ is a solicitation sent to potential suppliers containing in exacting detail a list or description of all relevant parameters of the intended purchase. • RFQQ may result in faster acquisition process than RFP but does not necessarily draw on the creativity of the vendor community. • Recommend RFP

Proposed Acquisition Process

Question #1: Should the Exchange use a SAAS model or acquire (borrow/build/buy) the IT Exchange asset(s)? • Exchange Alternatives • SAAS Model • COBHE Acquires Asset; Operated by 3rdParty • Criteria • Cost • Implementation • 5-Year operations • Risks • Schedule risk • Cost risk – assumptions of market segments and size • Consumer experience • Reliability/simplicity in getting consumers enrolled • Reliability/backend complexity of having all solution components fully functioning • Privacy and security • Impact on COHBE operations/and alignment with ops plan • Interoperability • Strategic direction and latitude • Stakeholder acceptability • Gathering information to develop solution alternatives (systems and services) and procurement strategy

Question #2: What is the “optimal” level of “interoperability” and coordination with the State’s Medicaid/CHIP systems, business processes and existing customer support services? • Weekly meetings with HCPF to define the decision framework, i.e. business/architectural alternatives and decision criteria (e.g. impact on customers, schedule risk, reliability/scalability/ maintainability, stakeholder acceptability) • Use cases important in understanding impact • Defined 8-10 household composition groups (e.g. SHOP employees, “mixed” households) • Sizes of these groups are being quantified to factor into discussions re impacts on customer segments from new business processes and systems

What is the “optimal” level of “interoperability” and coordination with the State’s Medicaid/CHIP systems, business processes and existing customer support services? Interoperability Between COHBE & State Medicaid/ CHIP Systems and Business Processes CBMS/PEAK & Medicaid/CHIP Eligibility & Enrollment Business Processes COHBE Eligibility & Enrollment Systems and Business Processes Extent of implementation dependencies, i.e. “interoperability” between COHBE system and business processes and CBMS and PEAK and associated State eligibility business processes increase complexity and schedule risk

What is the “optimal” level of “interoperability” and coordination with the State’s Medicaid/CHIP systems, business processes and existing customer support services? Degree of Interoperability Maximum Moderate Minimum MAGI Eligibility Account Mgmt Master Person Index Interface w/ State MMIS & CBMS Shared Call Center Shared Rules Engine Shared Plans Interoperability Functions and Business Processes (Additive)

What is the “optimal” level of “interoperability” and coordination with the State’s Medicaid/CHIP systems, business processes and existing customer support services?

Interoperability Decision Criteria

Background Material

Role of IT and Implementation Committee • Role is to provide guidance to COHBE executive leadership and early input into major strategic decisions such as IT investments, acquisition of services and procurement strategy • These initial acquisition decision(s) will likely be in the order of tens of millions of dollars over the first 3 – 5 years • Procurements will be structured to be competitive, fair and transparent • Due to the political sensitivities and visibility surrounding the COHBE, it is important that there be no real or apparent conflicts of interest in procurements activities and operational decisions • Meet weekly leading up to the start of the formal acquisition process

COHBE Implementation and Start-up Timeline Note: Accompanying timeline for required enhancements to PEAK & CBMS not shown

Draft COHBE Guiding Principles for Systems and Implementation

Colorado Health Benefits Exchange