Maine's Medicaid Issue

1)Maine provides medical coverage for over 260,000 people via their Medicaid program. Doctors, hospitals, clinics, and nursing homes all submit claims to Medicaid for payment of their services. Maine had to process thousands of claims per week using an outdated mainframe system, all the while adhering to HIPAA guidelines. With so much information stored in the database and with so many people trying to access that information, it is crucial for a custom-built system to be employed for such a purpose. Information systems are important to help increase the efficiency of the state Medicaid system, but the technology has to work correctly. The claims processing system used by the state was faulty and only served to exacerbate the problem. It was rejecting claims much more frequently than the old system, most of which were being held up as suspended. This suspended file grew quickly and lead to millions of dollars in claims being held back; in a two-month interval, 300,000 claims were frozen. The Bureau of Medical Services could not keep up with the number of phone calls or the processing of suspended claims. Providers who weren’t being paid were forced to turn away Medicaid patients or to shut down their operations, while others sought bank loans. The state’s budget was also negatively impacted. The system software was also prone to errors in overpaying doctors. The claim forms also had 40 fields of information that usually confused the providers and so incorrectly filled out forms were suspended. Furthermore, only 13 people were on staff to deal with customer service calls from 7000 providers. This disaster in the end cost the state an additional $30 million. Obviously, the impact of the faulty Medicaid claims processing system is tremendous.

2)The major risks of the Medicaid claims processing system project include a number of factors, all of which proved to have a negative impact on the entire state system. The system was very error-prone, issuing checks for overpayments and later trying to recover the extra money given out. The claims forms were difficult to fill out so some errors were made and the system would automatically classify those claim forms as suspended. To circumvent such problems, CNSI recommended that all providers re-enroll so their information would be complete according to the new system’s requirements, but the department chose instead to transfer the existing information from the old system to the new one. There is a risk of the new system still recognizing this information as incomplete, which is what happened. Another risk factor was the low number of staff members trying to satisfy thousands of providers at once. Other risk factors include that this was the first time a Medicaid claims system was being designed by CNSI. There were only two proposals for the system and it went ahead with the more problematic one, unknowingly. The president of CNSI even admitted that his company lacked the experience of working Medicaid systems, which is a risk factor for increasing the amount of error. Another major risk factor was the lack of money within the budget to even train any members of the staff to use the system.

3) The major problems faced in implementing the new system include an increase in technological errors that would lead to the system classifying a great number of claim forms as erroneous and thereby suspending them. This left thousands of providers unpaid, which lead to a decrease in the acceptance of Medicaid patients and even the closing down of some providers. After several attempts to alleviate this mess, the suspended claims backlog only grew in size. In terms of management and organization, the project managers were weak and there was no communication between departments, so that multiple departments would work on the same project simultaneously oblivious of the others’ doings. The staff members had no experience with the new system technology, nor were there enough money in the budget to train any of the staff members on how to use the system.