The state is ready to pull the plug on its troublesome Medicaid billing system, planning to cut 100 jobs in the Department of Health and Human Services and hiring an outside vendor to process claims.
The proposal to get rid of the billing system, which already has cost taxpayers $56 million, is tucked into Gov. John Baldacci’s overall state budget package, and will move ahead if the federal government approves the plan.
Commissioner Brenda Harvey said the state is expecting to hear from the federal government by the end of January. The plan to cut 100 jobs to pay for the outside processing is in the second year of the governor’s two-year budget.
The new Medicaid billing system has been plagued with problems since it went live in January 2005, and immediately started rejecting claims. The system is now paying the bills – or at least most of them – but can’t do other necessary functions required by the federal Medicaid office.
The federal government stopped paying for the system upgrades as of July 2005, leaving Maine taxpayers to foot the bill. To date, the federal government has paid for about $26 million of the project and Maine taxpayers have paid $30 million. The system was built by CNSI of Maryland, which came in with the low bid on the project back in 2001, but had never built a full Medicaid billing system before.
Gordon Smith of the Maine Medical Association, representing the state’s doctors, has been a vocal critic of the system, but worries about switching over to an outside vendor.
“We’re all worried about another transition,” Smith said. “Sometimes it is better to deal with the devil you know.”
The state’s 7,000 Medicaid providers, from doctors and dentists to nursing homes, watched in dismay as the bills they sent to the state for taking care of the 270,000 people in Maine on Medicaid – known as MaineCare – were rejected by the system. At the height of the meltdown, hundreds of thousands of bills were stuck in the computer.
The state sent out estimated payments – totaling more than $500 million – to providers through all of 2005 and into 2006, and is collecting that money back now that the system has processed most bills properly. Those double-payments, however, have created accounting headaches or worse, especially for small providers.
“Both options are bad,” said Smith, referring to sticking with the old system or moving to an outside vendor.
The Maine State Employees Union has come out against the cuts, and released a statement from its president, Dana Graham, on Friday.
“This union is determined to protect bargaining unit jobs, especially from position cuts motivated by politics instead of policy,” he said. “We are concerned that the proposed MaineCare cuts are targeting our members for many years of mismanagement, and that the proposed privatization is motivated by federal politics.”
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