If Health and Human Services Commissioner Jack Nicholas calls the state’s Medicaid computer transition “the worse system implementation I’ve even been involved in”; if Maine’s chief information officer, Dick Thompson, says the testing of this program was a flop because, “I’m not certain we knew what to test”; if the state controller, Edward Karass, when asked to rate the disaster on a scale of 1 to 10, immediately says, “Ten,” where’s the room for the rest of us to complain?

I keep wanting to say something unpleasant about the way the state fouled up its new Medicaid claims system, thereby imperiling $2 billion in health care annually and frustrating if not bankrupting hundreds of health care providers. But every time I think of something damning, I find the people overseeing the transition have already said it.

“We screwed up,” Commissioner Nicholas repeated the other day, “and we’re not going to try to hide that.”

Yes, they did, and, no, apparently they are not. Admitting guilt, however, is only the start.

If you are not a medical provider, this issue may seem distant. You may recall the Bureau of Medical Service tried to comply with federal regulations for improved medical-claims security by spending $22 million for a new computer system that, when turned on in January, immediately went into cardiac arrest. It would not accept claims, would not tell providers that their claims had been rejected and could not be easily returned to the old system. Nursing homes, hospitals, dentists, chiropractors – almost every one of the 7,000 health-care providers in Maine were affected, about 400 who see Medicaid patients daily were especially hurt.

The state, at first, thought the problem would take weeks to repair, then months, now it expects the system will be running smoothly by fall 2006. The fervid activities of the Legislature in the last six weeks distracted the public and the press from the Medicaid payment collapse, but it hasn’t gone away. Instead, the people now responsible for this system – the original contractor, CNSI, is no longer apparent – have been busy trying to carefully piece together the china that got smashed the first time around.

Mr. Thompson and Xwave, an information technology company, are working on the 265 software defects they have found in the original programming. Mr. Karass and Deloitte & Touche are reviewing the financial and auditing end. Patrick Damon, associate commissioner from the Department of Administration and Finance, and Public Consulting Group are serving as a link between DHHS and providers. If this sounds simple, it isn’t. Mr. Karass called it “the most complex issue I’ve ever encountered.”

Claims pour into an unstable system, providers need to be paid but cannot be accurately, changes to the software can create other problems elsewhere in the system, coding that once worked no longer does, small health-care offices were going broke while trying to take care of Medicaid patients without being paid, and yet money pours out, maybe to the right provider. About $300 million has gone out so far – the department needed a last-minute additional $25 million to get through the fiscal year – with the hope that audits will eventually sort out where the money actually belongs.

There is no criminal conduct in this meltdown so the story doesn’t make the headlines regularly, but this was as bad as anything seen in state government in years. It demonstrated what the department’s critics had been saying – that it was self-centered, out of touch with providers and didn’t think nearly enough about how patients received care. Had the department stonewalled, minimized the problem, blamed it solely on the contractor, Maine would have had just another example of the dysfunction that demanded the reform of Human Services beginning last year. There may have been a hint of that initially, but the department quickly accepted responsibility and has been steadfast since.

It has incentive to do so. The issue was too big to hide, and announcing the scope of the failure was better politically than having it discovered. But a problem this large was also a gift to the reformers. If they needed compelling evidence that the old way of operating Human Services had to change, they were offered a fine example.

Commissioner Nicholas said two lessons struck him particularly. First, talk more often to providers. “They should have had the opportunity to participate in the design of the system,” he said. Dentists, for example, could have saved the state and themselves a lot of effort by showing that private insurers use one claim form while the state uses a different form. Why? Because the state didn’t notice what everyone else was doing. It is now switching over to the common form, the commissioner says. Prior authorization – the process by which doctors get permission to bill for higher-priced drugs – will be similarly streamlined, he promised.

The second lesson sounds like a business course. “We didn’t do a good job with project management. We needed benchmarks; we needed to make vendors accountable,” the commissioner said. “The state, as a whole, has to do a lot better in this area.” That’s interesting, and measurable. If the lesson has actually been learned by the Baldacci administration, Maine will see over, say, the next year or so its state agencies held to clear, understandable standards for service.

Maine is withholding $5 million in payments to CNSI, which is about the price of the added consulting.

The lesson is still costly to health-care providers, patients and to the reputation of the state. But there is hope too, a sense that the crisis isn’t something to be merely endured. Maine will know more over the next two or three months about serious reform; for now, the administration is handling its disaster forthrightly and diligently.

That shouldn’t prevent, however, health-care providers and others from complaining, no matter how often Human Service officials beat them to it.

Todd Benoit is the editorial page editor of the Bangor Daily News.