PORTLAND – The president of the company that designed Maine’s new Medicaid claims computer system said Thursday his product failed to do its job during the first month of operation.

Since then, dozens of technicians have been perfecting the system that now, six months later, is back on track, he said.

B. Chatterjee, president of Maryland-based CNSI, said that despite three years of designing and testing new software and hardware, there was no way to ensure its problem-free operation before putting it into practice in late January. That’s when the state pulled the plug on the decades-old mainframe system and plugged in the new one.

“We did not have the luxury of running the system in a parallel (situation) or in an environment where we would know how fast or how accurate or how capable the system is,” he said. As it turned out, “the (new) system was performing less than adequately.”

That poor performance triggered nonpayment or shortchanging of many Maine- Care providers. To make up for the lapse, the Department of Health and Human Services cut checks for estimated payments. That led to the overpayment of many, draining the program’s coffers. State officials then had to ask for the surplus money back.

Chatterjee said he regrets the chaos that ensued.

“It definitely is lessons learned,” he said.

His company was awarded the contract in the summer of 2001, having created successfully a case-management system for Department of Behavioral and Developmental Services, now a sister bureau of MaineCare. Because the state was seeking a more sophisticated, centralized claims system to take the place of the outdated, federally noncompliant one, it meant starting from scratch.

The company took a five-year lease on an office near the Augusta Civic Center and even bought a house for its employees who needed lodging. Roughly 45 workers labored to design a system tailored to the state’s needs, Chatterjee said.

For that reason, the system is more complex and needs greater fine-tuning than its predecessor. Data had to be modified before it could be loaded into the new system. Providers and state workers who processed the claims needed extensive training, something they didn’t get enough of.

That has been one of the greatest challenges facing his company, Chatterjee said. It also explains in part why the new computer has rejected so many claims.

While they might have slipped through the old mainframe, claims that are not properly coded, formatted or that have incomplete information now are flagged and set aside.

His company’s other miscalculation, which led in part to the February pay freeze, was an underestimation of the horsepower and memory of the hardware needed. Chatterjee said.

Not ‘trouble-free’

For their part, state officials “did not appreciate just how huge an undertaking this was going to be,” said Mike Hall, deputy commissioner at DHHS, who is heading up restructuring of MaineCare. That includes getting the new computer system up and running.

Switching over the $2.6 billion program serving 300,000 Mainers through thousands of providers from the old computer system to a new one “would not have been trouble-free” no matter which vendor the state had chosen, Hall said.

Although the state is paying fewer estimated payments to providers – about $8 million a week compared to $32 million in actual claims – Hall hopes no estimated payments will be necessary a month from now.

Of the $22 million price tag, the state has withheld $5 million until the project is completed. Chatterjee expects that would happen by next summer, concluding with federal certification.

Whether the state will pay the full $5 million, given problems encountered so far, remains to be seen, Hall said.

When it is fully functional, the program is expected to be cutting-edge, Internet-compatible and the envy of Medicaid offices around the country, Chatterjee said. In fact, Washington state has contracted for a similar system.

Some might call MaineCare a guinea pig. Chatterjee prefers to call it a pioneer.

“They took the chance, and they’re going to reap the benefit.”

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