Along with the financial challenges of creating health insurance exchanges, and some of the political resistence to them, state governments have an enormous amount of IT work to do — perhaps chief among all the tasks is replacing arcane software with IT that can link HIX, Medicaid and CHIP systems, and function like Amazon.com.

With some guidance on those issues, researchers from the National Academy of Social Insurance and the University of Massachusetts Medical School have released a new report based on the experiences of “early innovator” states. Maryland, Massachusetts, New York and Oregon have all jumped at federal funding opportunities and started designing exchanges and their digital infrastructure.

Michael Tutty, co-author and director of the University of Massachusetts Medical School office of health policy and technology, said the experience of those states “can bend the learning curve for policymakers and promote collaboration among those looking to prepare for and advance health care reform in their states.”

Some of the recommendations are straightforward head-nodders: “Agreeing on a vision, strategy and realistic plan for information technology development is essential for meeting fast-approaching implementation deadlines,” and “Determining a state’s information technology approach requires a careful assessment of internal and external resources.”

And some recommendations point to very complex tech and policy problems state governments have to solve — like how to integrate a HIX with Medicaid and CHIP eligibility and processing systems. State governments need a Web-based system for consumers to determine their eligibility for Medicaid, CHIP or the exchange, with what, if any, amount of subsidy. And there will be several or even half a dozen users in the system: Medicaid, CHIP, health insurers, businesses, individuals, brokers and community-based organizations.

[See also: States' Medicaid expansion frought with political consequences]

For states like Illinois, where the state health department has a 30-year-old Medicaid information management system, this means a “wholesale replacement with little that can be salvaged” or a phased-in modernization, the report said. Indeed, only five states, according to one survey, can support the type of IT processes required for a HIX-linked Medicaid system, with flexible, Internet-based platforms. So far, according to the report, only one state can make eligibility determinations in real-time.

Massachusetts and Maryland have both adopted a phased approach, with the first phase focusing on building certain exchange functions, like exchange and Medicaid eligibility determination, and with future
phases focusing on integrating other social service programs. Both states are currently working with vendors on phase one, targeting functionality for open enrollment by October 2013.