Maine Manages to Mangle Medicaid Payments Again

If you ever want to do a case study on state government IT failure, a state's Medicaid information management and billing system would likely prove to be fertile ground for research (e.g., see Risk Factor posts here, here, and here). If you want an example that exemplifies every way to screw up, you would have a hard time finding one better than the Medicaid IT systems of the state of Maine.

Just last week, Maine's Department of Health and Human Services Commissioner Mary Mayhew disclosed that a computer glitch in Maine's latest Medicaid system, which went unchecked from the time the system went live in September 2010 until last December, allowed roughly 19 000 people to continue getting their medical bills paid by Medicaid even though they were ineligible.

According to the Bangor Daily News:

"Beginning in September 2010, 19,000 MaineCare recipients were sent letters notifying them that they had lost eligibility. Recipients can lose coverage for a variety of reasons, such as rising income or signing up for private insurance. MaineCare recipients can cycle on and off the program regularly as their personal circumstances change."

"The MaineCare cards [however] remained active for those ineligible recipients so they could still visit the doctor and receive other medical services, even on multiple occasions. Health providers who received the mistaken payments had no way to know those patients no longer were eligible, Mayhew said."

Mayhew went on to explain in the Bangor Daily News article that the Medicaid billing system was never designed to be interoperable with a different IT system that tracks the eligibility of a prospective Medicaid recipient.

The U. S. Federal government currently reimburses Maine for much of the cost of the Medicaid services it provides, which the state will now have to pay back. The sum is estimated to be upwards of US $7 million, which will hit the state hard since it is already facing a major Medicaid budget deficit this year and next. Mayhew also says that it will take several weeks to calculate exactly how much the state must reimburse the federal government.

As a side note (but one which also makes the glitch even more politically contentious and complicated) the estimated Medicaid budget deficit for this fiscal year alone is claimed to be $120 million. Mayhew and Maine's Governor Paul LePage have been blaming the ballooning deficit on mistaken cost assumptions made by the previous administration when the new Medicaid system came on line in September 2010 and on overly generous Medicaid benefits. They have been jawboning Maine's legislature as well as the federal government for months to accept deep benefit cuts.

Now it is clear that some of the shortfall—albeit not the majority by a long shot—is due to the computer glitch. The news is serving to undercut some of Mayhew and LePage's arguments for drastic cuts in Medicaid payments that were agreed to just a few weeks ago. Also undercutting their stance was the revelation that Mayhew knew of the glitch in January, but didn't disclose that fact until now. In her defense, Mayhew claims that she just became aware of the significance of the problem. But legislators are skeptical, saying that she kept them in the dark knowing full well that the glitch's disclosure would influence the political debate about the cuts.

Apparently, the most recent attempts at fixing the glitch failed, ultimately forcing Mayhew to come clean. What also came out was that her department's IT people spotted the problem months earlier, but didn't bother to inform her. While she apologized for not informing Maine legislators about the problem when she first found out about it, according to an article in The Portland Press Herald today, Mayhew "defended members of the department who failed to tell her about the problem for months [since at least June 2011], she said, because they were struggling with numerous computer problems."

Exactly what these "numerous" problems were Mayhew hasn't said, although they must have been linked to the attempts at getting certification for the new Medicaid system from the federal government—a project that took more than a year longer than expected. 

As I mentioned, the current Medicaid system went live in September 2010. It was originally supposed to go live in August 2010 after being delayed from April 2010, after being delayed from February 2010. By the time all was said and done, the system had cost about $39 million to develop. The system finally got certified by the Federal government in December 2011; that seal of approval supposedly meant that it is "designed to support the efficient and effective management of the [Medicaid] program" and satisfy the requirements set forth Federal laws, regulations and directives." I guess ensuring that your billing and eligibility systems are interoperable isn't a requirement of federal certification.

It's clear to see why Maine kept plugging away at its certification efforts. Certification means that instead of getting reimbursed by the federal government for only 50 percent of Medicaid recipient costs, the state gets a 75 percent reimbursement. It was the first time Maine had received full federal certification since early 2005.

In January 2005, the predecessor to Maine's current system—which was then brand spanking new—went live but within days began to experience a core meltdown. There is an excellent story in CIO magazine about that debacle. The ongoing problems with that $50 million Medicaid system (it was originally supposed to cost $15 million) eventually forced the state to procure the current one.

Governor LePage maintains that he has "complete confidence" in Mayhew, even while rushing out new legislation to restructure her department. News of the glitch and the restructuring are not related, he claims.

Uh-huh.

Photo: iStockphoto