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Massive Project, Massive Mistakes

Massive Project, Massive Mistakes

Maine's Medicaid mistakes turned a $US25m investment into a $US300m backlog.

Early Warnings

Hitchings and his staff made the decision to go live in January 2005. The switch to the new system would be made in a flash cutover in which the legacy system would be shut down for good and the new system would take over. Codes identifying providers (tax identifier numbers) and Medicaid patients (Social Security numbers) had to be changed to meet HIPAA guidelines, and the legacy system would not be able to recognize the new numbers. Nor could it read the new electronic claim forms. HHS dismissed the idea of running a parallel system as too costly and complicated.

Maine officials did have one contingency plan: They would pay providers for two to four weeks if the new system failed. Under the interim payment plan, if a provider's claims were not being processed in a timely manner, the provider would receive a payment based on the average monthly payment the provider had received the five weeks prior to the new system coming on.

On January 21, Hitchings arrived at his office to find the claims system up and running. The initial reports from the contractor and his staff were that the system was humming along, quickly moving through Medicaid claims.

But the following Monday morning, Hitchings sat down with CNSI contractors to go over the file statistics for the system's first three days. Something wasn't right. The system had sent about 50 percent of the claims - 24,000 in the first week alone - into a "suspended" file, a dumping ground for claims that have an error that is not significant enough to reject the claim outright but that are not accurate enough for payment. Typically, the error can be fixed fairly quickly by a claims processor. But the 50 percent rate was very high; the legacy system had suspended only about 20 percent of claims.

By the end of the month, angry calls from providers were mounting. One of the calls came from Kevin Flanigan, the only internist and paediatrician in Pittsfield, a town of 4000 people in south central Maine. Early one morning at the end of January, Dr Flanigan sat down with his business manager to go over the Medicaid payments that had arrived in that day's mail. Flanigan sliced open an envelope, pulled out the statement, and read "rejected". In the amount paid column, he saw "0.00". His manager opened a statement. Zero amount paid. "One after the other it said zero, zero, zero," Flanigan recalls. "My first reaction was that the state blew it, and it was no big deal. I could just call them up, straighten it out, and they'll send me a cheque."

Flanigan called HHS. He was told the problem was a computer glitch. The state would have it fixed in one or two weeks.

Flanigan went back to seeing his patients.

The glitch, however, kept sending tens of thousands of claims to the suspended file. Hitchings discovered that the system was suspending duplicate claims - claims from the same provider who had filed the claim a second time after learning the first had been suspended. The system was programmed to reject the second claim if it was identical to one already in suspension. With the capacity to work off only 1000 claims a week, it would take the Bureau of Medical Services more than six months to clear all of them.

Hitchings and CNSI began to look at the code and the design of the system. They found numerous problems. For example, without adequate guidance from Medicaid experts, the system had been designed to accept files with up to 1000 lines of claim data. But many claims were much larger, some containing up to 10,000 lines, and the server was rejecting them automatically. The Medical Bureau staff asked providers to submit smaller files. In the meantime, the IT staff would try to rewrite the software.

At the same time, other errors began popping up. The state now owed health-care providers as much as $US50 million in Medicaid payments, and the backlog of claims had reached almost 100,000. Providers couldn't get through to HHS. When they didn't get a busy signal, the wait to talk to a staff person at MaineCare (formerly the Bureau of Medical Services) was a half hour or more. Providers began calling state legislators. A press conference was held on the steps of the state capitol on February 16, declaring a financial crisis for Maine health-care providers.

The calls were coming in so fast that Hitchings decided to man the phones himself. One call he remembers was from a woman in a provider's billing office. She was frustrated because the system would not accept her claim, no matter what she did. Hitchings walked her through the process, making sure she had the correct billing and file name conventions. After 45 minutes, the system still wouldn't accept the claim. Hitchings had to admit defeat.

"That was just so frustrating," Hitchings says. "I just couldn't fix the problem. I didn't know what more we could do."

In Pittsfield, Flanigan opened more claim statements with no cheques. He began to make plans to draw on a line of credit that used his office building as equity.

Over the next nine months, Flanigan would take out $US30,000 in loans to pay his bills.

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