Maine is well on its way to creating a state-of-the-art Medicaid claims computer system far more efficient than the system it replaces. Once complete, it will result in considerable taxpayer savings by more easily detecting errors, fraud and abuse. The new system is a major leap forward replacing technology that has not changed in 30 years. While there have been many issues to overcome, as with any introduction of new technology, those troubles are now under control. Importantly, Maine will have a system that will be capable of truly managing the finances of the state’s costly and growing Medicaid program – the gold standard other state systems will be based upon.

I can say this with confidence because I am the president of CNSI, the firm hired by the State to develop and install the new claims management system.

It is important to understand the full background behind Maine’s new Medicaid computer system, the reasons for implementing it, and the complexity involved in developing a Medicaid management system that can process tens of thousands of claims per week from more than 7,000 Medicaid providers serving more than 300,000 low-income residents.

CNSI was selected to replace the State’s decades old “pay-and-chase” computer system. Under the old system, Medicaid providers – doctors, dentists, hospitals, disability service providers, etc. -submitted claims to the state for payment under the federal Medicaid program, and the system quickly sent out a check. Too often, it was later determined that the payment was made in error. Information on the claims form was missing, or the type of procedure provided was not eligible for payment under Medicaid. So the state then had to “chase” the money down and retrieve the funds that were paid to the provider. Further, the system failed to provide critical accounting and financial controls data. Obviously, this was an inefficient, time consuming and costly way to do business.

CNSI was selected to develop a system that paid only appropriate claims to avoid chasing after Medicaid payments that were made in error. Maine, like other states, is under severe budgetary pressures, Medicaid enrolments continue to rise, and new Federal requirements must be met. CNSI won the bid to solve these challenges based in its ambitious new system and previous success building a case management system for the state’s Department of Mental Health and Mental Retardation.

This latest task meant building an all-new computer system from the ground up, one that required far more data and input from the Medicaid providers than the old system required. It meant writing millions of lines of programming code and upgrading and modernizing hardware components. This is not simply a matter of swapping out a hard drive, or upgrading software. The new claims management system utilizes technology to deliver unprecedented benefits. The new system makes it easier for providers to file and process claims, streamlines the process for modifying the system to account for changes in federal rules (what used to take months now takes hours) and reduces operation costs of the existing mainframe system while ensuring compliance with federal initiatives.

Because this was more than just a patch on an old pair of jeans, there was no way to adequately run the new system in parallel with the old one, to work out any bugs while the old system continued to churn out checks to the providers. It meant, quite literally, shutting off the old system and flipping the switch to bring up the new one.

That switch was flipped last January, and immediately there were problems. Some of them were due to problems in the program and system itself – a common occurrence with any significant technical deployment. State and CNSI technicians worked diligently to change code and add patches to correct the problems as quickly as possible.

The vast majority of problems, however, were due to insufficient or erroneous data in the claims themselves. The new system is far less forgiving than the old one. If a claims form has insufficient or missing data, the system will deny or suspend the claim rather than pay it. This led to a huge backlog of suspended claims. Providers were not receiving timely payments, causing severe financial stress for many of them. CNSI and the state simply should have done a better job in reaching out to providers and fully training them on the new system and new requirements, and for that we sincerely apologize – certainly, a big lesson learned.

Today the system has already improved:

. 87 percent of all new “clean” claims are being fully processed (paid or denied). This exceeds the percentage of claims adjudicated by the old computer system, which was around 67-70 percent “on its best days,” according to state officials.

. Over 2.4 million claims have been paid to date.

. The number of suspended claims has been reduced, from a high of 55 percent at the start of this implementation, to the current rate of about 13% or about the same as under the old system.

. A recent onsite review by the federal Centers for Medicare & Medicaid Services concluded that the system is “headed in the right direction,” and is “sufficiently viable” to justify additional federal support.

. The system is now stabilized, and we are working to reduce the backlog of claims and return to business as usual.

We know the job is not over, but through the hard work and determination of CNSI and talented state employees, we have come a long way. I know that state employees have worked long hours, also many CNSI employees worked on Thanksgiving, Christmas, and anniversaries, as well as regularly working late into the night.

Today the system is working well, yet we still have our sleeves rolled up and are focused on finishing the job. In a short time, the system will be fully functional and will represent the standard of Medicaid IT systems. Maine will pride itself for being the pioneers in developing and utilizing health care technology for improved management, better efficiency, and lower costs for taxpayers.

In the end, the benefits reaped will far outweigh the costs.

Bishwajeet Chatterjee is president of CNSI.