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Case study

From concern to confidence: Modernizing for a smarter, stronger state exchange

Optum transformed a troubled health exchange, reducing incidents by 90% and improving enrollment accuracy, ensuring a smoother experience for all.

7-minute read

In this article

Based on the success in overhauling healthcare.gov, the Centers for Medicare & Medicaid Services (CMS) referred states with flawed exchanges to Optum.

Through that effort, the state realized that both technology and health care expertise were needed to achieve the functionality required to determine eligibility and enroll members in qualified health plans.

In choosing a turnaround partner, the state appreciated that beyond its proven expertise, Optum also had the appropriate organizational breadth and depth to execute the strategies that would create a new way forward for the state’s health exchange.

Creating a smooth vendor transition at an unnerving time

In a vendor transition, we keep the focus on the state’s priorities and move quickly to secure the knowledge needed from the outgoing vendor. In this case, Optum collaborated with the outgoing vendor to set a time-sensitive, robust knowledge transfer (KT) transition plan. This included:

  • Close collaboration with State leadership and the outgoing vendor

  • Establishing efficient business workflows and operational activities

  • Setting clear agendas and deliverable handover expectations 

  • Having targeted KT sessions across the solution’s functional areas, including deep dives for the technical components as well as operational reviews of outstanding issues and activities (such as monitoring, batches)

  • Holding end-of-day meetings to review progress and escalate obstacles  

  • Immediately addressing missed expectations

Sharing the mitigation plan with the state leadership and outgoing vendor — these items were tracked closely to completion and signoff
 

Enabling transparent collaboration

It was also important to carefully consider the existing vendor’s team and identify key individuals as part of the transition. Optum was able to rebadge and onboard them as employees — effectively preserving valuable knowledge about the state’s legacy system that might otherwise be lost. 

Challenging remediation situations like these often feature multi-vendor environments. Optum took a transparent approach to foster a shoulder-to-shoulder effort between the many vendors and the state. The result was a collaborative team focused on creating member experiences.

Engineering efficiencies

After maximizing knowledge sharing, Optum collaborated with the state to develop a structured approach for short- and long-term efficiencies. They prioritized essential capabilities, brought in technical resources for implementation, and deployed business operations support to address the enrollment backlog.

Technology capabilities

Early in the implementation, there were episodes where the existing on-screen enrollment process worked and times when it didn’t. Recognizing that any system delays created larger problems, the Optum technology team developed release plans with the state to mitigate the issues. 

Business operations capabilities

The old system had limitations, such as missing gaps in back-end functionality, leading to thousands of backlogged enrollments that required manual handling. To address these issues, Optum partnered with the state, providing technology, strategy and staff.

The state’s call center was expanded to handle the most challenging enrollment cases. The team also worked to identify and resolve key data issues and initiated several process redesigns. 

Over 180 team members processed 21,000 Change of Circumstance requests in 5 months. The system was relaunched before Open Enrollment, leading to more enrollments in one day than in the previous 3 months.

Root cause analysis to prevent future failures

During the transition, Optum addressed issues rapidly and effectively, focusing on root causes to ensure permanent corrections. Collaborating with the state, the team used its expertise and resources to resolve problems thoroughly.

Root cause case in point: Enrollment form data quality 

The state’s legacy forms lacked strict requirements and validation, leading to incomplete addresses and mismatched data. This required manual follow-up to cleanse and ensure accurate processing.

Data quality checks were also performed on the releases — a step that had been previously lacking. All partners were engaged to work collaboratively on data quality and each stakeholder was held accountable for achieving measurable improvements. 

Remediation at the coding level 

It’s one thing to hire staff, define a project, and build software and systems. But creating a stable, lasting solution requires examining an existing system’s code to really understand how to correct functional defects. 

By identifying data quality issues within the code itself, the system’s overall stability and back-end efficiency were significantly improved.

Preparing a new system for the future

Following the relaunch of the exchange, the Optum team went to work ensuring a cost-effective, secure and comprehensive hosting and managed services solution for the state. 

Because the state’s previous solution had been hosted with the previous vendor, the Optum team needed to transition all services and data to its hosting center quickly and securely to maintain high availability of the system.  

To mitigate risk and create an all-encompassing system, the team worked to provide application compatibility with the new environment and conducted multiple data migration trial runs. 

This thorough approach confirmed that the data migration to the production environment was efficient, minimizing downtime during the transition.

Ultimately, the team was able to transition services from the state’s previous hosting provider within 7 months. This encompassed disaster recovery, security, monitoring, and server provisioning, resulting in a secure, flexible and user-friendly solution for both the state and its members.

Continuous improvement

Today, Optum works closely with the state to continuously improve the system's operational effectiveness and help ensure the success of the state’s health service programs. Below are some examples of these improvements over years.

Enrollment integrity by the numbers

99% success rate

Open Enrollment passive renewals boast a high success rate.

82% reduction

Unresolved enrollment integration errors decreased by 82%.

90% reduction

The number of incident tickets has decreased 90% since 2017.

40% reduction

There has been a 40% decrease in problem tickets.

99.99% success rate

Carrier enrollment integration has a 99% success rate.

>$400,000 cost savings

The changes in capacity management have resulted in cost savings of over $400,000.

Reducing the number of incidents

Continuous improvement initiatives have significantly reduced IT service management (ITSM) incident tickets. The average number of outstanding tickets, which once exceeded 1,000 in 2017, has been reduced to an average below 50 tickets at any given time. 

These reductions were achieved through process enhancements, including application upgrades and improved business requirements gathering.

Streamlined Open Enrollment Renewals

Since the initial relaunch, several proactive enrollment renewal strategies have been implemented to improve accuracy and customer experience. For example:

  • Preemptive Validation: Automated "dry runs" assess eligibility criteria.

  • Automated Resolution: Bulk updates address shared root causes.

  • Proactive Outreach: Customized workflows gather necessary details from customers.

In 2025, the Optum team conducted 9 "dry run" cycles of over 75,000 eligibility determinations, renewing 99.94% of the state’s population without any customer or case worker intervention.

Improved carrier enrollment integration

To address data issues that could lead to rejected 834 transactions from the state’s insurance carriers, the state and Optum implemented continuous improvement techniques, and a set of enhancements was developed to improve enrollment integrity in the VHC application. 

These enhancements include real-time, rule-based data validations during every outbound enrollment trigger, which identify common business validation errors that would otherwise cause an 834 transaction to be rejected by the insurance carrier.

As a result, between 2016 and 2024, the state achieved an 88.4% reduction in carrier enrollment EDI transaction error rates. This has significantly reduced the state’s workload, increased accuracy in enrollment transactions, and improved the overall customer experience.

Quality releases

The state’s approach to quality control starts during the requirements gathering phase, where close collaboration with Optum ensures that the design aligns with the needs of internal stakeholders and external customers. 

Throughout the development process, Optum conducts unit tests and a range of quality checks before an update is released for the state’s UAT reviews. Additionally, comprehensive system integration testing is performed for developments involving system interfaces.

Since January 2021, Optum has deployed approximately 1,100 maintenance and operations (M&O) release items, encompassing a mix of technical and functional items across different components. Optum works with the state to determine and address priorities during M&O releases, ensuring success and efficiency.

Responding to the pandemic

In 2020, when the COVID-19 pandemic necessitated the American Rescue Plan Act, the platform enhancements Optum achieved for the state in response to Public Health Emergency policy changes enabled a timely, effective implementation of many changes, including: 

  • Medicaid
  • Eligibility
  • Enrollment periods
  • The ability to expedite members’ pending request verifications 
  • Reinstatements for members who were recently in cancellation or termination status 

As a result of the initial and ongoing COVID-19 support, 173,000 people in the state had their Medicaid redetermined during the PHE unwinding. This ability to reprioritize work and do so methodically helped maintain the exchange’s stability at a challenging time.

The Optum team worked with the state to respond in a matter of days, helping accomplish projects that might normally take weeks to implement and verify. 

Through proactive, responsive support like this, the state is now better prepared to face unforeseen challenges that can threaten a member’s ability to obtain health care.

Ongoing success based on continued commitment

In 2022, the state chose Optum to implement significant system enhancements, such as: 

  • CMS Federal Data Services Hub Integration: Supporting Verify Lawful Presence 1A/1B re-verifications
  • Enrollment Integrity Framework Enhancements: Improving the accuracy and consistency of enrollment transactions

Integration with the state’s ECM system, including public document access and full-service management for workers, involved migrating 6 million documents. This consolidation led to $300,000 in operational and system efficiency savings.

Members also have a more streamlined and efficient process for renewals thanks to an Automated Renewal Development Enrollment capability. 

The Optum team evaluated, recommended, and implemented ARPA Eligibility Updates, timely providing additional APTC subsidies and unemployment benefits to members.

Creating a comprehensive view to enhance Medicaid support

Working with the state, Optum also implemented a major application software upgrade and data center migration in 2022. 

The new solution is a platform leveraging the Oracle Enterprise Service Bus to broker calls between consumer off-the-shelf (COTS) products, external verification services, internal financial services, the human services system and enrollment systems — more than 200 servers spanning 7 environments.

These upgrades mean caseworkers now have a comprehensive view of individuals to process applications and manage cases.

Familiar, trusted faces a decade later

Optum's commitment to the state is long-term. Many of the same professionals who started working with the state continue to do so today, providing a continuity of service that builds trust and ensures lasting success.

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