Medicaid Learns from IT’s Mistakes

The state's IT managers reasoned that a new end-to-end system would be easier and cheaper to maintain. The development of the new system was assigned to the IT staff in the DHS, which decided it wanted a system built on a rules-based engine so that as Medicaid rules changed, the changes could be programmed easily into the system. Some service providers offered states the opportunity to outsource claims processing systems. But the DHS staff believed building its own system would give it more flexibility.

For the next two years, CNSI and Maine's DHS IT shop worked long hours writing code. Errors kept cropping up. Hitchings and his staff made the decision to go live in January 2005. The switch to the new system would be made in a flash cutover in which the legacy system would be shut down for good and the new system would take over.

On January 21, Hitchings arrived at his office to find the claims system up and running. The initial reports from the contractor and his staff were that the system was humming along, quickly moving through Medicaid claims. But the following Monday morning, Hitchings sat down with CNSI contractors to go over the file statistics for the system's first three days. Something wasn't right. The system had sent about 50 percent of the claims - 24,000 in the first week alone - into a 'suspended' file, a dumping ground for claims that have an error that is not significant enough to reject the claim outright but that are not  accurate enough for payment.

Rebecca Wyke, head of Maine's financing department, appointed Thompson as CIO in late March, replacing Harry Lanphear. The goal was to get the new system to process claims at the same rate that the legacy system had, sending 20 percent into a suspended or rejection file. Thompson hired Jim Lopatosky, an Oracle database specialist in the state's Bureau of Information Services, as operations manager to act as a calming influence on the department's battered IT division. Lopatosky prioritized tasks. He acted as a liaison between teams working on different functions. He directed the programmers to fix those software bugs that would resolve  the largest number of suspended claims and postponed work on the portal, through which providers could check on the status of claims. That could wait. But the intricacies of the Medicaid program continued to thwart its progress.

Thompson needed a business owner who could clarify Medicaid business processes for the IT staff. Last October, Dr Laureen Biczak, the medical director for MaineCare, agreed to take on that responsibility. "This is what brought it all together," says Thompson. "It was something we should have done from the start: have someone who knew the business [of Medicaid] working full-time on the project."

The Person Behind It

Jim Lopatosky

IT operations manager for the state of Maine

The IT staff was “running at 100 miles per hour trying to fix every software bug.

Dick Thompson

CIO, state of Maine

By March, it was clear that we were missing any sort of basic management and were in a defensive mode.