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Articles September 5, 2025

Bridging the Gaps in Medicaid’s Modular Approach

Adam Hofheimer Adam Auerbach
Authors
Adam Hofheimer, Adam Auerbach

Successful Transformation Depends on a Unified Human-Centered Experience

Many healthcare organizations are starting to modernize their technology, transitioning from large, monolithic IT systems to smaller, more flexible modules. The intention is to improve efficiency, reduce costs, and, ultimately, enhance healthcare outcomes.

This is especially the case with Medicaid. In fact, the Centers for Medicare and Medicaid (CMS) issued guidance this year that requires states to transition from legacy Medicaid Management Information Systems to modular Medicaid Enterprise Systems. This mandate enables states to leverage federal funding to apply best-in-class technologies to modernize. Another benefit: state agencies are empowered to manage their own data ecosystems, which can save costs and assist in data-driven decision making.  

While many states are embarking on this process, few have successfully integrated these modules into a cohesive, human-centered experience. This presents significant challenges for healthcare providers, trading partners, and members, especially the most vulnerable populations who rely heavily on Medicaid for their healthcare needs.

The Challenges of a Fragmented Modular Approach

Modular approaches enable state agencies to select and implement solutions for various functions across the organization, including claims processing, provider management, pharmacy benefit managers, or third-party liability.  

 This method should lead to more specialized and efficient systems; however, when modules operate in isolation, they create a fragmented landscape where each system acts on its own, rather than a part of an integrated solution. Each independent system has its own user interface, processes, and contact points, which leads to confusion and frustration for members and a higher call center volume and cost-to-charge ratio for states.  

A survey conducted by the Center on Budget and Policy Priorities found that 40% of Medicaid enrollees in numerous states experienced significant delays in processing applications due to administrative backlogs. These delays are often caused by fragmented systems, long call times, and siloed legacy platforms, which increase the need for call center support and drive up administrative costs.

For example, healthcare providers might get credentialed in one system but have to navigate separate platforms when seeking prior authorization to provide care to a patient, which delays healthcare services and impacts overall patient care. Additionally, fragmented modules are more complex for Medicaid members who need to manage their ongoing eligibility, analyze provider options, and navigate pharmacy benefits.

The Hidden Costs of a Modular Approach

It’s becoming clear that there are hidden costs that come with a modular approach. If the systems are not integrated, members, providers, trading partners, and other stakeholders must navigate multiple channels, while agencies focus on system management. This creates friction, drains resources, and adds administrative expenses, which undermines CMS’s stated objectives to provide more efficient, economical, and effective administration of the state Medicaid program. 

The complexity of modular systems also has direct implications for Medicaid work requirements. As states prepare to implement policies like the One Big Beautiful Bill Act, which mandates 80 hours of qualifying activity per month for enrollees aged 19–64, fragmented systems risk creating administrative hurdles. Members may even face delays or loss of coverage due to inconsistent reporting mechanisms.  

To mitigate these risks, states must embrace innovative technology, like automation, cross-agency data integration, and intuitive user interfaces that streamline work status validation and exemption processing. An Integrated Eligibility System (IES) and real-time data exchanges ensure a seamless process across modules, minimize redundant data entry, and simplify the experience for administrators and members.

The Benefits of a Unified Human-Centered Experience

To address these challenges, state agencies must move beyond selecting modular solutions in isolation and focus instead on integration and user experience. The Georgia Department of Community Health serves as a notable example. By prioritizing a unified experience, the agency has worked toward consolidating services and creating a more accessible, efficient system for both Medicaid providers and members. 

To reduce administrative burdens and truly deliver on the promise of improved healthcare outcomes, state agencies should consider: 

Interoperability

Select vendors and systems that communicate effectively with each other, allowing data to flow seamlessly across platforms, creating a cohesive patient/member 360 experience with a single access point.

User-Centric Design

Prioritize the experience of healthcare providers, members, and Managed Care Organizations (MCOs) , ensuring that interfaces are intuitive and interactions are simplified. CMOs play a critical role in coordinating care and navigating benefits, and their workflows must be integrated into the modular ecosystem.

Feedback Loops

Regularly solicit input from users to identify areas for improvement; use the feedback to continuously enhance the user experience.

The Transformational Opportunity Ahead

States have a clear opportunity to build more agile, responsive, and cost-effective healthcare infrastructures, but modular modernization isn’t enough for states to realize Medicaid’s full potential. Success takes an integrated, technological transformation.

CapTech understands the challenges public services face and brings deep expertise in Medicaid Enterprise System (MES) transformation. CapTech partnered with the Georgia Department of Community Health to lead a MES transformation, delivering modular architecture, intuitive portal design, and seamless integrations with platforms like Salesforce, Okta, MuleSoft, and ServiceNow.

Building on this industry experience, CapTech's proprietary Unity framework is designed to accelerate successful Medicaid Enterprise System (MES) transformations for other states. With the right partnerships and a focus on integration, state agencies can create a healthcare ecosystem that lowers administrative costs and deliver a Medicaid experience that works better for everyone.

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Adam Hofheimer

Adam Hofheimer

Principal, Public Services

With 20+ years of technical expertise and visionary leadership, Adam has been instrumental in designing and building customer and citizen experience platforms that significantly reduce friction in healthcare and government services. His strategies and solutions prioritize enhancing user self-service and transparency through human-centered design, resulting in more intuitive and streamlined interactions. Adam's commitment to reducing fraud, waste, and abuse remains at the forefront of his work, ensuring that systems are not only efficient but also secure and trustworthy. His overarching goal is for CapTech to be the most reliable and effective partner a client could have, driving long-term success and meaningful improvements in service delivery.

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Adam Auerbach

Director

Adam is passionate about drawing new insights from health data and building digital experiences that simplify access to meaningful healthcare. Clients rely on his 10+ years of expertise to guide and oversee strategic initiatives ensuring that systems are efficient, scalable, and aligned with stakeholder objectives. A life-long learner and Health Systems Subject Matter Expert (SME), Adam is dedicated to solving complex problems through tech-forward solutions.

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