State takes steps to fix Medicaid billing problems

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AUGUSTA – Two years after throwing the switch to turn on a new computer system, Gov. John Baldacci has included provisions in his budget that would allow the Department of Health and Human Services to look for another way to process Medicaid bills.

“The decision is not final yet,” said Becky Wyke, the commissioner of the Department of Administrative and Financial Services, “but it gives us the ability to consider other options.”

One of those options is to move to a financial agent approach, Wyke said, to have claims processed by a third-party vendor.

According to Wyke, Maine and Massachusetts are the only states in New England that don’t use an outside contractor to do that work.

“The nature of the plan is to transition to a new approach,” Wyke said.

The state began work to install a new computer system to process MaineCare claims in 2000. Plagued by delays, it has never worked properly, leaving thousands of service providers unpaid and the state struggling to reconcile its books.

The system has cost the state nearly $60 million since it was activated two years ago. With the previous system dismantled, there was no backup capacity and as the limitations of the new system – called the MaineCare Management Information System – became apparent, the state scrambled to pay Medicaid service providers.

The state sent out estimated payments. In some cases, providers were underpaid while others were overpaid. The state is still working to retrieve the overpayments and square its books.

State Rep. William Walcott of Lewiston sits on the Health and Human Services Committee, which has dealt with the computer issue for the past two years.

“It’s been very frustrating,” Walcott said. “It’s almost like a money hole. I think it’s time we start looking into holding (the vendor) accountable. And we have to recognize that part of the problem is the state’s fault because it didn’t do enough testing before starting the new system.”

That mistake, he said, can’t be repeated if the state goes looking for a new option.

Former Auburn state Rep. Tom Shields was a member of the HHS Committee during the MeCMIS’s fiasco, and agreed that any vendor in the running for the contract should be thoroughly investigated beforehand.

“It’s been a disaster since the beginning,” Shields said. “We need to write this one off and say, ‘Let’s start over.'”

Even after two years of working with the system and much improvement, it still doesn’t do some of the things required by the federal government, Wyke said, which caused the Centers for Medicare and Medicaid Services to withdraw support for the program in 2005.

“For the first year, it was a nightmare,” Walcott said. “Some people are still having trouble with it. It’s been an accounting nightmare.”

“The problem is the ability to complete the process with this vendor,” Wyke said. If the state decides to replace MeCMIS with something else, it’s likely the federal government would help defray most of the development costs.

The administration has been reluctant to publicly criticize the company that built the computer system, Wyke said, because Maine still relies on it to process MaineCare claims.

“For better or for worse, it has been the system that has been operating in the state for two years, and it might need to operate for sometime to come,” Wyke said.

State Rep. Hannah Pingree of North Haven is the new House majority leader and was the chair of the HHS committee during the last Legislature.

“It’s a system that has been in the process for more than five years,” Pingree said. “You can only work on something for so long. We’re at the point where we have to look for a new direction.”

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