AUGUSTA — State officials said it will take at least a month to determine the fiscal impact of a computer glitch that allowed 19,000 ineligible Mainers to receive Medicaid benefits that may be reclaimed by the federal government.

In the interim, partisan interests are angling to assign blame to a problem that may have played a role in creating the recently-filled budget gap at the Department of Health Human Services. 

Democrats said that the LePage administration’s decision to withhold information about the inappropriate payments means lawmakers effectively removed health care services for 14,000 Mainers with a recently-enacted budget built on inaccurate data. Republicans, meanwhile, pointed at an inefficient and error-prone payment system that last year was wrongfully denying Medicaid benefits and is now apparently wrongfully doling out benefits to ineligible Mainers. 

The source of the problem may be more complicated than the rhetoric. 

Nonetheless, the scrutiny has fallen squarely on DHHS Commissioner Mary Mayhew. Mayhew’s staff had been aware of the problem, but did not inform lawmakers until this week.

Mayhew, said the payment issue was first brought to her attention in late January.

At the time the supplemental DHHS budget was still being parsed in the Legislature’s Appropriations Committee. That Mayhew or staff didn’t notify lawmakers in January rankled Democrats, who say they’ve lost confidence in the agency to produce reliable data on which to build a budget.

Mayhew said Wednesday that the breadth of the problem was not made complete until recently. 

“It came to me at the end of January, but we did not have a full understanding of the problem,” she said. “At that time, I believed it was imperative that a full analysis occur to determine the exact number of cases we were dealing with.”

That analysis was brought to the attention Gov. Paul LePage this week. The governor on Tuesday then informed legislative leaders.

Since then Democrats have questioned why Mayhew didn’t make lawmakers aware of the problem sooner.

Rep. Peggy Rotundo, D-Lewiston, a member of the Legislature’s budget-writing committee stopped short of blaming Mayhew. However, she said, identifying the problem may have allowed lawmakers to make better decisions during the budget process. She added that she was struck by the “incompetency” at DHHS and that the issue had “shaken our confidence in the ability of DHHS to be able to produce any figures for us.”

“There were people in DHHS that knew that there were problems that could be creating the shortfall and they never communicated that to Appropriations,” Rotundo said.

Mayhew acknowledged Wednesday that DHHS program directors had been aware of a glitch in which the state’s Medicaid eligibility system wasn’t communicating with its payment system. However, she said, the directors had raised “more questions than answers.”

The extent to which DHHS staff knew about the problem is unclear. However, issues with payments going to ineligible Medicaid recipients had been identified by state auditors beginning last summer.

State Auditor Neria Douglass said Wednesday that the Medicaid system undergoes an audit every year. Currently the audit is reviewing system billings and payments from July 1, 2010, to June 31, 2011. 

Douglass said the full audit isn’t due until the end of the month, at which time the commissioner, Mayhew, receives a full report. However, she said, as auditors encounter errors — such as benefits to ineligible recipients — members of her team inform the appropriate program directors at DHHS. 

Douglass said that she first began hearing from her staff about potential wrongful Medicaid payments last summer. 

According to Mayhew, the program managers who would have been notified of the problem were the director of MaineCare Services, the MaineCare finance director and the director for the Office of Family Independence.

The directors are political appointments by the governor. Gov. Paul LePage, in an effort to implement his new policy initiatives, last year jettisoned a host of program directors from DHHS, including all three directors from the aforementioned offices. 

Two of the replacement directors were new to the agency. A third was promoted from within DHHS.

Mayhew expressed frustration Wednesday that she was not made aware of the problem sooner. She promised that there would be accountability within the department, but she took sole responsibility for the mishap.

Mayhew also stressed that the computer system that created the problem was antiquated and notoriously unreliable. 

The state in 2010 upgraded its eligibility system. It was recently certified by the federal government. However, its payment system is more than 10 years old. Mayhew said that eligibility system was not communicating with the payment system. 

The result, she said, was that 19,000 of the state’s Medicaid, or MaineCare, recipients continued to receive benefits even though the new system had determined they were ineligible. 

In each case, Mayhew said, ineligible recipients received a letter informing them that they could no longer access health benefits. But at the same time, the payment system was loading their MaineCare cards with benefits that could be used at hospitals. 

Over the next four weeks DHHS will try to determine how many ineligible individuals continued to access taxpayer-funded health care coverage. If most heeded the eligibility letters and tossed their MaineCare cards, the fiscal impact could be small. If they ignored the notices and received benefits, the impact could be much more significant. 

Lawmakers recently approved a $120 million emergency budget bill for Medicaid for the current fiscal year. The Legislature was supposed to begin addressing another funding gap for fiscal year 2013. However, work on that budget will likely get delayed until Mayhew presents her fiscal analysis of the ineligible Medicaid recipients. 

Removing the 19,000 ineligible recipients is likely to reduce the 2013 funding gap. 

The Legislature is scheduled to adjourn in early April. 

House Speaker Rep. Robert Nutting, R-Oakland, said that it was his intention to meet the adjournment date regardless of the DHHS problem. He said that if the issue wasn’t addressed before the end of session, the governor could call the Legislature back in later this spring. 

Nutting also dismissed claims from Democrats that the administration was to blame for the faulty data that was used to construct the recent DHHS budget. He described as “bogus, political” Rotundo’s assertion about Democrats had attempted to get accurate information from DHHS but were spurned by the administration. 

“The suggestion that the Democrats may have been suspicious of the numbers because this was happening is wrong,” Nutting said. “They didn’t know this was happening. They could not have known what they did not know.”

He added, “If the numbers are bad now they were bad when the previous governor (Baldacci) was here and did nothing about it.”

smistler@sunjournal.com

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