The Department of Health and Human Services is asking for $4 million to reimburse Medicaid providers for accounting and borrowing costs they’ve incurred because of massive computer problems in the state’s billing system.
DHHS Commissioner Jack Nicholas made the request to the Appropriations Committee last week in response to a question about what he is doing to reimburse providers for their costs to resubmit bills, try to balance their books and pay interest on borrowed money when they weren’t getting paid for services.
“That’s been a very difficult number to quantify,” Nicholas said. “Our best estimate at this point,” is $4 million, he said, even though a providers’ advisory group had requested a lot more.
It has been almost a year since the switch was thrown on a new Medicaid billing computer that has never worked right, but is getting better.
The system is now processing about 85 percent of the bills entered into it, but is still incapable of handling certain types of claims, including some services for the mentally retarded and those for people eligible for both Medicaid and Medicare.
And, 365,000 claims – most more than 90 days old – are still stuck in the system, creating a potential reconciliation nightmare for those doctors, nursing homes and other healthcare providers, who have received interim or estimated payments in lieu of getting their actual invoices processed. In all there are 7,000 Medicaid providers in the state, but 400 constitute the bulk of the billing.
Gordon Smith of the Maine Medical Association said the $4 million for providers “will go a long ways toward restoring provider faith in the MaineCare (Medicaid) program, as long as it is accompanied by renewed efforts to fix the problem as soon as humanly possible.”
“The claims processing problems have continued for nearly a year now, and it has cost the provider community millions of dollars,” Smith said. “It will cost additional sums to reconcile the interim payments with claims.” The Maine Medical Association represents 2,000 doctors.
Becky Wyke, the governor’s commissioner of finance, said there’s a “disconnect” between the $313 million in suspended claims and the $418 million in interim payments that have been sent out.
Some people stopped submitting claims, but “Some may owe us money back,” Wyke said. A smaller number may be owed money, either for bills they never submitted because of the computer confusion, or for services in excess of their interim payments.
The state already collected $10 million in over-payments earlier this year, and Wyke said her best guess is it will be able to collect $10 to $15 million more.
State Rep. Kevin Glynn, R-South Portland and a member of the Health and Human Services Committee, asked, “with a whole bunch of claims” in suspension, “how do we know if we’re on budget?”
Wyke said based on an actuarial estimate it appears the state is close to budget even though the books haven’t been reconciled. That actuarial work was done by the accounting firm of Deloitte-Touche, which has been helping DHHS fix its billing problems, along with two other outside consultants. That consulting work will cost the state $5 million. Another $2 million will go for Deloitte’s work in helping the department restructure its Medicaid operation.
Glynn asked why the state was not going after the vendor – CNSI of Maryland – to recoup money the state and providers are spending to fix the computer problems.
“I want to see restitution,” Glynn said.
DHHS Deputy Commissioner Mike Hall said the state was “reviewing our legal remedies under the terms of the contract,” but was not taking action right now.
“There will be a day of reckoning,” Hall said. “That day of reckoning is not today…This is not the time to jeopardize the project.”
The $4 million in restitution for providers and $7 million for outside consultants are part of an overall $60 million supplemental request from DHHS. Half of the request is associated with the new Medicare Part D drug insurance plan, which is replacing Medicaid and the Drugs for the Elderly prescription plans starting Jan. 1. Other bills on the list include $9 million in settlements as a result of audits done on DHHS accounts – some dating back several years; court-ordered improvements as a result of problems at the former Augusta Mental Health Institute; and, a potential $10 to $20 million shortfall in the Medicaid account.
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