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Massive Project, Massive Mistakes

Massive Project, Massive Mistakes

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

A Call for Help

By early March 2005, Hitchings's staff and CNSI were overwhelmed. For $US860,000, the department hired XWave, an integrator and project management consultant, to take over the project. More people were hired to take phone calls. Governor Baldacci, saying "enough is enough", ordered Commissioner Nicholas to have the claims system operable and running smoothly by the end of March.

But March came and went, and nothing changed. Desperate, state officials decided to change the program's management, and Rebecca Wyke, head of Maine's financing department, appointed Thompson as CIO in late March, replacing Harry Lanphear, who is now CEO of the Kennebec Valley YMCA. Thompson was put in charge of the project, and ordered to right the system as quickly as possible. (Lanphear could not be reached for comment.)

By the end of the summer, 647,000 claims were clogging the suspended claims database, representing about $US310 million in back payments. Interim payments were being made, but reconciling those payments with the claims was an accounting nightmare. Wyke hired the accounting firm Deloitte & Touche to audit the state books to determine if Maine would have enough money to pay Medicaid bills by the June 30 end of the fiscal year. The $US7 million contract also called for Deloitte to consult on how to reconcile the Medicaid bills.

XWave set up a project management office and steering committee that met weekly to establish priorities and monitor the progress of system software fixes. The goal was to get the new system to process claims at the same rate that the legacy system had, sending 20 percent into a suspended or rejection file. Thompson hired Jim Lopatosky, an Oracle database specialist in the state's Bureau of Information Services, as operations manager to act as a calming influence on the department's battered IT division. When Lopatosky took over in June, he encountered a staff "running at 100 miles per hour", trying to fix every software bug, with little direction on what was most important. "They couldn't see the forest for the trees," he recalls.

Lopatosky soon realized, as XWave had, that the system's problems could be laid at the door of poor project management and worse communication among the HHS IT staff, contractors and business users. For instance, programmers for the state and those working for CNSI would work on parts of the system without telling each other what they were doing. Lopatosky prioritized tasks. He acted as a liaison between teams working on different functions. He directed the programmers to fix those software bugs that would resolve the largest number of suspended claims and postponed work on the portal through which providers could check on the status of claims. That could wait.

But the intricacies of the Medicaid program continued to thwart progress. Thompson needed a business owner who could clarify Medicaid business processes for the IT staff. Last October, Dr Laureen Biczak, the medical director for MaineCare, agreed to take on that responsibility.

"This is what brought it all together," Thompson says. "It was something we should have done from the start: have someone who knew the business [of Medicaid] working full-time on the project."

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