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A n a l y s i s of ProblemThis agreement includes the completion of Phase 1 development activities during FY 2019-20, securingapproval to exit Stage 4 of the PAL and begin Phase 2 activities by February 2020. Limiting activities tothe HIS component of MEDS in Phase 1 reduced the risks associated with attempting to begin work onall components of the very large and complex MEDS enterprise at the same time. This approach alsosupported the opportunity to conduct prototyping efforts and pilot the proposed use of cloud-basedinfrastructure and development environments, modern Identity Access Management (IdAM),Application Programming Interfaces (APIs), and Master Data Management (MDM) principles andmethods, as part of the modernization solution.FY 2017-18 activities included the following: Submission and approval of PAL S2AA documentation Submission and approval of a Planning Advance Planning Document Update (PAPDU) Completion of PAL S3SD activities and submission of draft S3SD documentation for review Submission of a draft Implementation Advance Planning Document (lAPD) for detailed designdevelopment and implementation activities to begin in FY 2018-19FY 2018-19, planned activities include the following: Chtaining CDT approval of the PAL Stage 3 documentation Chtaining Centers for Medicare and Medicaid Services (CMS) approval of the lAPD Procuring vendor development and related services Beginning Phase 1 - modernization of the MEDS infrastructure and HIS componentResource History(Dollars in thousands)Program BudgetAuthorized Expenditures(FY 2014-15)8,396PY-3(FY 2015-16)7,2094,3853,655FY-4Actual Expenditures*RevenuesPY-2(FY 2016-17)6,655PY-1(FY 2017-18)6,653PY(FY 2018-19)14,5545,4215,5241,51100000Authorized Positions1616191724Filled Positions1616191722.500001.5Vacancies*Note: Actuals are as of October 31, 2018.C.State Level C o n s i d e r a t i o n sMEDS is an aging system that is ineffective and inefficient in meeting the state's current and futurehealth and human services programs' business needs. Project objectives include: modernizing theMEDS database, improving data quality, minimizing impact on interfaces with ancillary systems, andenhancing security. The project's guiding principles include: protecting data security, reinforcing theC H H S information strategy, system stability, sustainahility, flexibility, appropriate data access, meetingfuture business needs, and enterprise data integrity.This approved request would continue support for OSI's centralized management of the multidepartmental MEDS Mod Project, which is scheduled to begin and complete development activities forPhase 1 - HIS in FY 2019-20 and begin Phase 2 - SCI in February 2020.This request supports DHCS' mission to provide Californians with access to affordable, high-qualityhealth care, including medical, dental, mental health, substance abuse treatment services, and longterm care: as well as C D S S ' mission to serve, aid, and protect needy and vulnerable children andadults to strengthen and preserve families, encourage personal responsibility, and fosterindependence. Through a multi-departmental approach to the MEDS Mod project, and by engaging OSIto manage efforts on behalf of all participating departments and stakeholders, this request promotesCHHSA's goal of collahorative delivery of information technology (IT) projects. With enterprise-wide3

A n a l y s i s of Problemcollaboration, C H H S A can leverage assets to improve utilization of resources, and can influence projectand program conceptualization, planning, and design towards shared business service and delivery.This request also supports the State's overall strategic IT initiatives by employing a "cloud-first"approach to the hardware and software options being included in the modernized solution, in addition,this request includes consideration of options for leveraging existing solution components within theState's IT enterprise and/or making available for leveraging components, methods or processesincluded in the modernized MEDS solution.D.JustificationDuring FY 2019-20, development activities are scheduled to proceed according to the Project Roadmaptimeline (see Attachment #1). This schedule reflects a continued phased and iterative approach todevelopment of the solution to modernize the MEDS enterprise. The focus of project activities duringFY 2019-20 will include completing Phase 1 - HIS, beginning Phase 2 SCI modernization and continuedetailed planning for future phases. Transitioning from modernizing the limited-scope MEDS HIS(Phase 1), and beginning efforts on Phase 2 - SCI, will require a continuation of funding for existingproject resources, along with increased resource levels to meet the unique needs for modernizing themuch larger and more complex SCI component of the MEDS enterprise. Lessons learned inmodernizing the MEDS HIS will he applied to the subsequent modernization efforts of SCI, V S A M , andAlerts components to complete MEDS modernization in the most effective and efficient mannerpossible.The project and its two sponsors, DHCS and CDSS, continue to work closely and collahorate on a widerange of business and technical activities for the project.The following briefly describes the resources included in this request. Additional individual position andjustification detail for the new positions requested is provided in Attachment #2 - Workload Analysisand Justifications. A proposed organization chart highlighting the new positions is included asAttachment #3.P R O J E C T T E A M S T A T E S T A F F I N G T O T A L - 4.019,000 (4-Year L T Funding Equivalent to 27.0FYs)The MEDS Mod Project T e a m is composed of a mix of state staffing and consultant resources. This mixis needed to meet all on-going project planning, administrative, project management, technical,program business, and coordination activities. Existing state limited-term resources, set to expire onJune 30, 2019, include 18.0 O S I , 3.0 DHCS, and 3.0 CDSS staff. To meet the increasing projectworkload needs for planned activities during SPY 2019-20, this request includes continued funding forexisting resources and the addition of 1.0 C S I , 1.0 DHCS, and 1.0 C D S S staff.OSI P R O J E C T T E A M S T A F F I N G - 2.991.000 (4-Year L T Funding Equivalent to 19.0 F Y s ) New CSI Position - 1.0 PY ( 141,000) Existing CSI Positions - 18.0 PYs ( 2,850,000)P R O G R A M AND S T A K E H O L D E R R E P R E S E N T A T I O N - 1.028.000D H C S Staffing 501.000 (4-Year L T Funding Equivalent to 4.0 F Y s ).New DHCS P o s i t i o n - 1 . 0 PY ( 172,000) Existing DHCS Positions - 3.0 PYs ( 329,000)C D S S Staffing - 527.000 (4-Year L T Funding Equivalent to 4.0 F Y s ).New C D S S Position - 1.0 PY ( 131,000) Existing C D S S Positions - 3.0 PYs ( 396,000)4

A n a l y s i s of ProblemH A R D W A R E / S O F T W A R E - 2.364.000The modernized MEDS solution will rely on the purchase of cloud-hased hardware and softwareservices to limit costs and hotter accommodate future changes in hardware and software needs. Thisestimate includes costs for the anticipated hardware cloud fees, in addition to estimated costs for avariety of planned software purchases including architecture modeling, project and system environmentmanagement, database, conversion/extraction transformation and load, application development andAPI management, identity and access management, and security tools.O T H E R O E & E - 2.069.000Includes costs for general expenses, printing, communications, travel, training, and office equipment.F A C I L I T I E S - 597.000The project costs to provide facilities for the requested state and consultant staff.C O N T R A C T S E R V I C E S - 12,211.000To support the increasing and specialized workload associated with the scheduled Phase 1 (HIS) andPhase 2 (SCI) activities during FY 2019-20, funding for a variety of contract services is beingrequested. These resources will assist the project's state staffing with ongoing project management,planning, technical analysis, detailed requirements development, system and application development,system integration support, data conversion/clean-up, testing, and oversight activities. This approach tomeeting project staffing needs in FY 2019-20 ensures resource capabilities not available in stateservice or only needed for limited duration are available when needed. The following is a briefdescription of the services provided within each of the contract services categories:Project Management Support S e r v i c e s - Will help with overall project planning, project management,scheduling, transition planning and strategies and support of the project's modular and iterativeprocurement approach. These services also include agile coaching, stakeholder liaison andorganizational change management.T e c h n i c a l S e r v i c e s - This includes a wide range of technical consulting services: Infrastructure and Application Development Data Conversion Technical Support System Integration Support Business Analysis Testing Security Technology Support Penetration TestingProject OversightIncludes independent project oversight functions by CDT, along with Independent Verification &Validation consultants responsible for verifying and validating that project and contractor productsadhere to industry standards, and that all delivered products meet defined requirements and/orspecifications. Given the critical nature of the data contained in the MEDS, these services will providespecific focus on ensuring ail applicable security requirements are met.5

A n a l y s i s of ProblemThe following table provides a breakdown of contract services costs by category for this request:Contract S e r v i c e sEstimated C o s tProject Management Support ServicesTechnical Support Services 1,725,000 10,184,000*Project Oversight ServicesTotal*lncludes 1,400,000 for DHCS technical consultant costs. 302,000 12,211,000P R O J E C T C O S T S SUMMARYAttachment #4 provides a Budget Display summarizing the costs for each of the participatingdepartments, in relation to their FY 2018-19 project budget.E.O u t c o m e s and AccountabilityThe purpose of the M E D S Modernization project is to plan, procure, develop, implement and maintain asolution that will better support the state's core beneficiary eligibility information and enrollmentfunctions for Medi-Cal and other health and human services programs, while providing enhancedsupport to system users at the state and local level. Detailed and collahorative planning continues to hecritical to the success of the overlapping planning and design, development and implementation phasesof several application modules. Given the complexity, mission critical functionality, and size of theMEDS database environment, a modular and iterative approach is being taken to modernize theM E D S . During FY 2019-20, the approach is to proceed with modernization efforts of Phase 1 - HIS andcommence Phase 2 - SCI. Phase 1 development of the cloud-based infrastructure and developmentenvironment, converting the three existing HIS V S A M files to a new technology platform, modernizingthe HIS application, will demonstrate the effectiveness of the proposed modernization methods andtools for use during Phase 2.The following outcomes are expected for this proposal:F. Completion of Phase 1 HIS and start of Phase 2 development for SCI. Modernization progress will continue to position the modernization effort future phases.A n a l y s i s of All F e a s i b l e AlternativesSeveral alternatives have been identified and analyzed for proceeding with project activities during FY2019-20, taking into consideration the inherent complexities in the effort to modernize MEDS, PALactivities, federal project approval requirements, and the resources available for the completion ofproject activities in FY 2018-19.Alternative 1: Provide one-time contract and other r e s o u r c e s , and four-year, limited-termfunding for staffing to support s c h e d u l e d 2019-20 project activities and ongoing staffing needs.PROS: Limits the overall duration of the project by providing the resources to support ongoingdevelopment activities related to the HIS and SCI components of the modernization solution. Provides the resources needed to continue the phased development approach of convertingMEDS to the modernization solution. Ensures needed resources are available to support conducting successful procurements for themodernization effort. Reduces risk of project failure and/or delays due to inadequate staffing resources.CONS: Requires increased General Funds for project costs.6

A n a l y s i s of Problem Increases state government personnel.Alternative 2: Approve proposal and r e s o u r c e s through r e s o u r c e redirection.PROS: Supports proceeding with development activities for the MEDS modernization. Reduces demand for General Fund support.CONS: Does not ensure all planned project activities are adequately resourced. Increases risk of project failure and/or delay due to inadequate staffing resources. Resources may not be available to redirect.Alternative 3: Do not approve i n c r e a s e d staffing and r e s o u r c e s requested.PROS: No impact to the General Fund. Does not increase state government personnel above existing project staffing base.CONS:G. Does not provide the resources needed to fully support planned project activities in FY 2019-20. Delays ability to continue project development activities. Will extend timeline for modernization of the existing outdated MEDS. Increases risk of project failure due to inadequate staffing and other resources and protractedtimeline. Delays contribution to the advancement of the state's overall Medicaid Information TechnologyArchitecture maturity. Increases risks of reduction in federal financial participation for existing MEDS maintenance andoperations costs.Implementation PlanUpon approval of this BCP, the project will work with the internal acquisition teams and the StateTechnology Procurement Division to procure needed contract resources. The project will developrecruitment packages to recruit and hire new state staff. The project will work with project sponsors tocoordinate continued project progress. The project will also develop and submit the required planningdocuments to the C M S to ensure continued federal financial participation (FFP) support.H.I.Supplemental Information Proposed project timeline is provided as Attachment #1 Workload analysis information is provided for each requested position as Attachment #2 Proposed organization chart is provided as Attachment #3 Project budget display is provided as Attachment #4RecommendationApprove Alternative #1 and provide one-time resources in 2019-20, as well as four-year, limited-termfunding for increased project staffing, needed for the planned ongoing activities of the MEDSModernization project.7

AttachmentsA T T A C H M E N T #1 - P R O P O S E D M E D S MODERNIZATION P R O J E C T R O A D M A PPHASE 15/1/2019-1/30/2020PHASE 22/3/2020-1/29/2021Phase 1Phase 2Create New Cloud Infrastructureimplement IdAMDevelop New Data BaseConvert Health Insurance SystemDataMaintain current businesscapabilities while exploringof jortunities to leveragemodernized solutions andenliancementsConvert Statewide Clent Index to NewInfrastructure and DatabaseMaintain current busirwss capabSittes »»Nleexploring opportuntties to leverage modernizedsolutions and enhancementsPHASE 32/2/2021 -1/31/2023PHASE 46/1/2022 -1/31/2023Convert MtOS VSAM Files and Alerts to New Infrastructure and DatabaseMaintain current business capabilities while expbring opportuntties to leverage modernized solutbns andenhancemerrtsPhase 4Convert Share of Cost andPrepaid Health Ptans to newInfrastructure and DatabaseMaintain current businesscapabilities while oqriorir opportunities to leveragemodernized solittions arxienhancements8

AttachmentsATTACHMENT #2 - WORKLOAD ANALYSIS1.L i m i t e d - T e r m R e s o u r c e s E q u i v a l e n t to 1.0 IT S u p e r v i s o r II, O S I F i s c a l a n d C o n t r a c t sSupervisorPosition TitleFiscal and Contracts SupervisorPosition IDNew PositionRequestInformation Technology Supervisor IIStateClassificationOrganizationCSIPosition Start Date July 1,2019Position EndJune 30,2023DateFunctional GroupProject Management CrganizationJustificationThe Fiscal and Contracts Supervisor position leads and manages the most complex procurementand contract management activities for the project. The project complexity is increasing as itbegins Phase 1 development activities where it will be executed using a hybrid developmentmethodology with futures phases overlapping and with multiple active contracts. Beginning withPhase 1, the project will be required to implement new State and Federal reporting requirements.This position is a key contributor in establishing new repeatable contract management plans insupport of the evolving and complex nature of the work. This position supervises subordinateProcurement/Contract Management and Fiscal staff in day-to-day activities and provides oversightof the PMC's procurement, contract management, fiscal activities, and performs decision-makingat the operational level. Maintains the project's Procurement, Contract Management and CostManagement Plans. Serves as the primary point of contact for the Department of Technology'sprocurement analyst, CSI Acquisition and Contracting Services Division, and CSI's procurementand budget office staff. Works with CSI Legal Cffice in addressing any procurement-related legalissues and develops procurement justifications. Provides procurement activities status updatesand recommendations to senior management. Ensures the multiple procurements are developedin coordination with each other to ensure project success. This position serves as the formalcontract manager for all executed service contracts and agreements and works with eachcontract's functional manager in ensuring effective management of the contracts.Hours

E CALSTARS Dept. of Technology PPBA Original Signed By: Date submitted to the Legislature Yang Lee APR 01?(in . BCP Fiscal Detail Sheet BCP Title: MEDS Modernization Muiti-Departmentai Team Budget Request Summary BR Name: 0530-302-BCP-2019-A1 FY19 CY BY BY 1 BY 2 BY 3 BY 4