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The then existing claims processing system,1970 Honeywell mainframe, was not up to the
mark, nor could it meet HIPAA’s demands or provide online access. To address this issue, at
the beginning of 2005, the state of Maine eliminated the old Medicaid claims processing
system for a new web enabled, more secure, and faster system.
As additional health services were added, the number of codes and sub codes for services
grew, and payments to doctors and hospitals were parsed accordingly. The transfer of
information and dealing with all the specifics of codes regarding the laws and systems
Maine also needed to give providers a way to check the eligibility of Medicaid patients and
the status of their claims. Making this information available online, they hoped, would cut
down on the number of calls to the state Bureau of Medical Services, thereby saving the state
money.
2. What were the outcomes of the project compared with the desired solution?
Desired Solution: Over 100,000 Medicaid claims per week must be managed by the new
information systems, as they are crucial to the organization. The more secure system would clear
claims faster, track costs better and give providers more accurate information on claims status.
Outcome: This new system was $25 million and created a lot of problems for the state of Maine,
doctors, hospitals, and patients. The impact of its faulty Medicaid claims processing system was
vast. The State was unable to process claims for six months and issued $575 million dollars in
The system was holding back approving claims and with it came over 300,000 frozen claims
in the first two months. The system would send checks to doctors for the entire amount billed
versus the Medicaid amount. In total this mishap cost the state 30 million dollars.
With their bills unpaid, some of Maine’s recipients were turned away from their doctors. It
was also noted that several dentists and therapists were forced to close and some had to take
In such a disaster of an IT project it is hard to look for silver linings. A lack of proper governance
model led to a lot of mistakes and no body knew who to hold accountable for what. One highly
appreciable point about the project was Maine officials did have one contingency plan: They
would pay providers for two to four weeks if the new system failed. Under the interim payment
plan, if a provider’s claims were not being processed in a timely manner, the provider would
receive a payment based on the average monthly payment the provider had received the five
weeks prior to the new system coming on. Although there was a delay in requesting help XWave,
It was the right idea to bring in Project Management experts when realized what the problem was.
Maine had two bids for the project. Since they only received two bids, this should have raised
a clue that the requirements of the project were unreasonable. There first mistake is not
revising the requirements in hopes of getting more bids. There second mistake is accepting
the bid from CNSI because they had no experience with Medicaid systems.
The likely cause of the project failure started from the beginning when CNSI and Maine’s
Department of Human Services (DHS) IT staff didn’t meet with Medicaid experts to discuss
the Medicaid rules. Instead, CNSI contractors had to decide how to meet Medicaid
requirements.
To build a new and relatively unproven technology platform for the entire system rather than,
IT switched over to the new system overnight with no backup system in case something went
wrong.
No, End-to-end testing or training was conducted before the switch over.
The other issues were lack of preparedness and security systems created for the software.
This resulted in costs to the state and much inconvenience to many people.
The risks involved with health care information systems are very serious. Confidential
information must be kept safe, billings and services rendered must be accurate and truthful,
and payments must be accounted for and supplied by the state for the persons on Medicaid.
References:
1. http://www.healthcareitnews.com/blog/inside-look-maines-mmis-implementation
2. https://www.cio.com/article/2447010/project-management/maine-s-medicaid-
mistakes.html
3. https://www.cs.bgu.ac.il/~se122/wiki.files/Ass1-MaineMedicaid.pdf