New Ohio Medicaid IT System Leaves Some Providers Unpaid for Five Weeks

Back in 2004, the U.S. Centers for Medicare and Medicaid Services (CMS) approved the state of Ohio’s plan (PDF) for a new Medicaid Information Technology System (MITS) and selected Ohio as an early adopter for the then new CMS Medicaid Information Technology Architecture. MITS (PDF) was set to replace the Medicaid Management Information System (MMIS) which was decades old. In 2005, 3000 business requirements were identified that the MITS needed to support, and in 2007 Hewlett-Packard (HP) was selected as the vendor to deliver the US $115 million MITS. (Actually, it was EDS, which HP bought in 2008, that won the original contract, which was for $100.8 million).

On the 2nd of August, the Ohio Department of Job and Family Services (ODJFS) proudly announced that MITS was now live. And apparently by the 16th of August or so, as reported by News Channel 5 in Cleveland last week, many Ohio Medicaid vendors were complaining that they were not getting paid. Furthermore, many Medicaid patients were complaining that they couldn't get their prescriptions filled because MITS would not let their pharmacists bill Medicaid for them.

In addition, some Medicaid patients were accidentally kicked out of the program when the "data just did not cross over to the billing system," reported Channel 5, citing one of several internal state worker memos it had in its possession. However, an ODJFS spokesperson seemed to repudiate those memos by denying that anyone was kicked out, but said instead that Medicaid recipients had to re-enroll in MITS and might have not been aware they had to do so.

Exacerbating the problem for the Medicaid vendors was that the state told them they would not get paid for two weeks, beginning July 22, during the transition from MMIS to MITS. Therefore, as a result of the ensuing payment problems, some vendors were reporting that they had gone five weeks without getting paid and were now facing financial hardship.

ODJFS claimed that the MITS problems affected only 1 percent of the 90,000 people it served, and blamed many of the problems on user errors by Medicaid vendors.

However, according to a story at Channel 4 out of Columbus, Ohio, this week, the ODJFS was underreporting the number of people who were not getting paid, since it wasn't counting "...the thousands of providers who have seen checks denied and delayed." 

On a positive note, the prescription payment issue seems to have been resolved.

The Columbus Dispatch reported this Tuesday that Ohio is going to make emergency payments today "...to several hundred nurses and other health-care providers" who haven't been paid.

An ODJFS spokesperson was quoted by the Dispatch as saying,

"We are going to look back to the old system and average what two weekly payments were to them, and make an estimated payment to them of that average, and then reconcile any underpayment or overpayment—once the new system is fixed."

The spokesperson said the fix is expected be completed "soon."

The problems Ohio is having with its new Medicaid IT system are reminiscent of what Idaho experienced a year ago with its new Medicaid IT system, and which is still causing headaches today. As in Ohio, Idaho's Medicaid vendor claims weren't paid correctly—many for several months—which caused many to get to the point of declaring bankruptcy. As the result, the state decided to provide $117 million in emergency interim payments to its hardest financially pressed Medicaid vendors. However, some $10 million in over/double payments were later found to have been made, which Idaho is still trying to recover.

Idaho has been so frustrated with the performance of its new Medicaid IT system it has recently withheld $3 million in payments to the system's vendor, Molina Medicaid Solutions.

Not sure that Ohio is at that point yet, but if things continue it may start thinking about it.

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