This is the deep-dive companion to the master system map. For each of the 10 publicly-focused heat zones and each of the 11 end-to-end process flows, we draw the operational reality at the step level: named owner per step, named handoff, where it actually breaks, and — explicitly — what we don't know yet. The diagnosis prose for each section is the synthesis. The "What we don't know yet" callouts are the questions Luminary would bring to FSSA in any first working session.
The renewal & verification workflow that produced the 78% procedural disenrollment rate — now carrying H.R. 1 quarterly, SB 1 quarterly, and EO 25-60 end-of-self-attestation simultaneously.
The 78% procedural disenrollment rate isn't caseworker failure or member negligence — it's the product of a multi-gate workflow where each gate has a small failure probability and the failures compound across millions of events. Adding 400 people to a workflow whose bottleneck is at steps 5–7 (document handling) doesn't solve the bottleneck; it just adds intake capacity around it. EO 25-60's end of self-attestation pushes more events into the manual-proof funnel, where doc-matching is the binding constraint. H.R. 1 and SB 1 layer quarterly cadences onto a system that struggles with annual renewals.
The August 2026 master procurement combines all four managed care programs (HHW + HIP + HCC + PathWays) into a single bid, target contract start January 1, 2029. Aggregate value ~$68B; ~1.4M Hoosier lives in scope.
Procurements at this scale fail in the requirements phase, not the build phase. The IBM/ACS contract failed because the requirements didn't specify what was actually needed; the corrective lessons were drawn in 2009 and have not yet been re-tested at this scale. Two windows determine the next decade: the RFP design (now through August 2026), and the transition (Jan 2027 through Dec 2028). Both are short. The CMS-0057-F deadlines (PA decision timeframes Jan 2026, full FHIR API Jan 2027) and SMC template mandate (July 2026) all pre-date contract start, so they must be designed into the RFP rather than negotiated in.
Indiana's first post-PHE hospital rate restructuring. $1.866B SDP, tiered ACR (158% rural / 125% high-commercial / 100% physician). CMS approved Apr 28 + May 1, 2026.
The May 2026 hospital package is the most significant Medicaid rate restructuring Indiana has executed since the post-PHE unwinding. It threads three needles simultaneously: (1) shore up rural/CAH viability; (2) cap consolidated systems' Medicaid pricing power; (3) hold physicians at 100% of Medicare to protect access. The fiscal architecture works only if MCE pass-through is verifiable and encounter data clean. The H.R. 1 layer adds federal uncertainty: future SDP designs may be constrained.
Two active audit surfaces. ABA: $56M confirmed + $76.7M potentially improper (HHS OIG 2024). Attendant care: $200M sought from 5 largest providers (FSSA April 2026). Documentation gaps + EVV non-compliance the common surface.
Two audits at $56M and $200M, in different service lines, with the same root surface (documentation + EVV), is a pattern. The pattern indicates that Indiana's claims-and-encounter data already contains the signal needed to predict the next audit — but the detection layer is downstream of the spending event. The integrity exposure is concentrated in a small number of large providers in a small number of service lines. Pre-payment integrity (claim edit + EVV validation at submit) catches earlier and cheaper than post-payment audit. The Working Group's ABA cap recommendation is a policy response; the operational response is a detection-and-prevention upgrade.
Indiana's first managed-LTSS program, in year 2. 11,296 waiver waitlist (714 invitations Feb 2026). $462M delayed NF payments (Feb–Apr 2026). HEA 1277 carves long-stay back to FFS, eff July 1, 2027.
PathWays' operational health concentrates on two seams: the intake throughput (waitlist) and the encounter-to-rate-setting loop. The $462M NF payment delay is a symptom; the underlying issue is cycle time between state, CMS, and MCE on a still-new contract structure. The HEA 1277 long-stay carve-out is a legislative reaction that doesn't fix the underlying mechanism — it just removes the most expensive population from the structure that's having trouble. Encounter data quality in years 1–2 is the single most important operational metric for the next rate-setting cycle.
Quarterly verification + 3-month lookback for ~560K HIP enrollees. Outreach window Jun 30 – Aug 31, 2026. 400 staffers (50 onboarded late April 2026). Implementation deadline Jan 1, 2027.
H.R. 1 quarterly verification on top of an unchanged renewal workflow produces the same operational risk that drove the 78% procedural disenrollment rate during the unwinding — at four times the cadence. The 400 staffers are needed, but they don't change the workflow's structural failure modes (document handling, notice comprehension, channel mismatch). Indiana elected the most demanding implementation parameters in the country (quarterly + 3-month lookback); the implementation will reveal whether that election is operationally sustainable. The Kentucky / Arkansas litigation history means CMS approval timing and conditions of approval are non-trivial path dependencies.
The political wound from 2023. $984M underestimated across FY24–25. Drove Steinmetz resignation (Dec 2024), Rusyniak departure (Jan 2025), and Mishler's Medicaid Oversight Committee.
The 2023 forecast miss was not bad math — it was bad data + bad assumptions. The corrective response (monthly reporting, oversight committee, leadership changes) addressed signal cadence and political feedback, but did not yet fundamentally restructure the data layer the forecast runs on. The next high-risk re-estimate is FY27–28, which absorbs H.R. 1, SEA 2, HEA 1277, EO 25-60, and the hospital SDP reform — all of which materially affect member volume, PMPM, and rate setting. Without a comparable depth of data-layer reform, the same risk class persists.
Federal court (Jun 27, 2024) vacated HHS 2020 reapproval of HIP 2.0. POWER accounts paused. Retroactive eligibility waiver vacated. NEMT waiver vacated. SEA 2 1115 amendment pending. The expansion vehicle for ~560K Hoosiers operates under constrained authority.
Rose v. Becerra didn't end HIP; it constrained its authority. The vacated waivers (premiums-as-condition, retroactive eligibility, NEMT) were the policy features that distinguished HIP from straight ACA expansion. Without them, HIP is structurally closer to standard expansion than to the Daniels-era design. The SEA 2 1115 amendment for work requirements re-opens the question of how distinctively Indiana HIP will remain. The August 2026 RFP must specify a HIP architecture; if the 1115 amendment isn't yet approved, the RFP either bets on approval or designs around it.
Mandatory new SMC templates (APD · OAPD · AoA · Intake Form) for any procurement reaching CMS after July 1, 2026. Zero Indiana MES modules on the public CMS SMC repository. 90/10 DDI · 75/25 M&O federal match rides on certification.
SMC certification is the federal funding leverage that determines the economics of every modernization decision. Indiana's zero-module posture on the public repository is a meaningful gap relative to peer states — and the August 2026 RFP is the inflection point. Modules specified loosely in the RFP can't be certified tightly later. Modules certified before contract start earn 75% match from day one; modules certified later cost the state the difference. The July 1, 2026 mandatory template deadline lands before RFP issuance, so RFP design must already be compliant.
Indiana's homegrown MCE exits HHW, HIP, and HCC on Jan 1, 2026. Members auto-assigned to Anthem · CareSource · MHS unless they make a different selection. Largest single MCE transition in Indiana managed care history.
MDwise's exit is the operational dry run for the August 2026 procurement transition. It's a smaller version of the same problem (member migration, provider re-contracting, care continuity, cutover) on a constrained timeline. The lessons from MDwise — what worked, what didn't — should be codified by mid-2026 because they inform the transition mechanics of the much larger 2027–2028 cutover for the new master contracts. A well-documented MDwise post-mortem is the single most useful artifact FSSA could produce in this window.
Application channel → IEDSS verification → eligibility decision → MCE assignment → CoreMMIS member master.
The application flow's failure modes concentrate in two places: identity/income verification (steps 4–5) and plan selection (step 9). Identity/income verification failures send applicants into a manual-proof funnel that's the same funnel that breaks renewals. Plan selection failures produce members in plans with low-quality network match for their needs, which then drives later care-access friction.
Ex parte first → pre-populated form → member response → re-verification → result. Now layered with H.R. 1 quarterly + SB 1 quarterly + SEA 2 amendment.
The renewal flow is where Indiana's biggest operational risks live, because it's the single workflow that now carries: annual renewals + H.R. 1 quarterly + SB 1 quarterly + EO 25-60 end-of-self-attestation + SEA 2 work-req checks. The 78% procedural disenrollment rate from the unwinding is the leading indicator of how much load this workflow can carry without further failure. Adding 400 staffers to the workflow without restructuring it is the most expensive way to discover the bottleneck is procedural, not capacity-related.
Apply → screen → ID assigned → MCE credential → revalidate every 5 years.
Provider enrollment is where Indiana's integrity exposure begins. The two recent audits (ABA, attendant care) suggest the screening + ownership-disclosure layer is where the leakage starts. Cross-state termination cascade (§455.417) compliance is the highest-leverage cleanup. MCE credentialing duplication is a member-experience friction that affects access; provider directory accuracy depends on it.
Verify eligibility → deliver service → submit 837 → CoreMMIS adjudicates → 835 remit → post-payment review.
The FFS claim flow's weak points are at steps 4–6 (front-end edits, adjudication, suspended-claim resolution) and step 8 (post-payment review). Edits catch some errors at submit; the suspended-claim queue carries the rest into manual handling. Post-payment review (H4) is where the audit exposure surfaces. Pre-payment integrity logic (edit + EVV validation at submit) is the highest-leverage upgrade for both throughput and integrity.
Rate setting → capitation → MCE adjudicates → encounter submission → reconciliation → quality + network adequacy → contract performance.
Managed care operations' binding constraint is encounter data quality. Rate setting, forecasting, MCE accountability, and federal reporting all depend on it. Sub-capitation arrangements between MCEs and large delegated provider groups are a known national gap in encounter visibility; in Indiana it's not publicly characterized. Capitation withholds tied to encounter quality are the single highest-leverage contract mechanic.
FFS: Acentra Atrezzo. Managed care: each MCE. CMS-0057-F decision timeframes (Jan 2026) and FHIR PA API (Jan 2027).
PA is the most-cited provider burden in Medicaid nationally and the same applies in Indiana. CMS-0057-F's January 2027 full FHIR PA API requirement is the major operational milestone — it forces standardization across MCE systems plus Acentra. Pre-FHIR, providers navigate 5 different MCE portals plus Atrezzo, multiplying friction. The MDwise transition creates a near-term PA-honor question.
Traditional Medicaid (FFS): OptumRx. HHW/HIP/HCC/PathWays: MCE PBM. MDRP rebate invoicing through Gainwell.
Pharmacy carve-in vs carve-out is the policy decision that drives every operational variable. Indiana's hybrid (managed care carved IN; Traditional carved OUT) is the national majority pattern. California (Medi-Cal Rx) and New York (NYRx) moved the opposite direction to capture rebate scale and eliminate PBM spread. Indiana has not made that move; the August 2026 RFP is the next decision window.
Functional eligibility → care plan → service delivery → EVV → claim → MCE adjudicates (PathWays) or CoreMMIS (FFS waivers).
LTSS / HCBS / EVV concentrates all of Indiana's hottest operational risks: encounter quality (PathWays year 2), provider integrity (attendant care audit, H4), payment cycle (NF $462M delays), and waitlist (intake throughput). EVV reconciliation is the single fork that determines audit defensibility, payment accuracy, and rate-setting quality.
Adverse notice → MCE internal appeal (managed care) → state fair hearing (ALJ) → judicial review.
The appeals flow's primary failure mode is non-exercise: members don't appeal because notices aren't clear or aid-pending mechanics aren't understood. Procedural disenrollment outcomes during the unwinding likely produced an under-appeal pattern (people walked away rather than fought). Capacity is the second concern: a major H.R. 1 disenrollment wave will load FSSA Hearings.
FSSA OPI front line → audit triggers → records review → extrapolation → recoupment → MFCU referral if fraud → federal layer (OIG · UPIC · PERM).
The integrity flow's defining feature in Indiana is its retrospective posture: detect, audit, recoup. Two large audits (ABA $56M, attendant care $200M) in different service lines with the same root cause (documentation + EVV) indicate the data layer already contains the signal needed for prospective detection — but the detection layer is downstream of the spending event. Pre-payment integrity catches earlier and cheaper.
T-MSIS monthly · CMS-64/-37/-21 quarterly · PERM cycle · FSSA monthly Medicaid financial reports (post-reform).
Federal reporting flows are downstream-of-data-quality. T-MSIS, CMS-64, PERM — all only as good as the source data in CoreMMIS, IEDSS, and the MCE encounter pipelines. Post-2023 monthly reporting cadence is a signal-frequency reform; it doesn't change signal quality. The PERM cycle's 2-year lag is the structural reason eligibility documentation work must start early — H.R. 1's October 2029 trigger is set against measurements still being collected.