GovernmentExecutive.com

In Tech Insider’s May 21 entry, Allan Holmes discusses Maine’s new Medicaid claims processing system, MECMS. While CNSI understands and appreciates the importance of examining and reporting on Government IT projects, the article does not accurately depict the history and current status of MECMS. Because CNSI was not contacted prior to this entry, I would like to take this opportunity to address and correct some inaccuracies.

1.“After spending more than $70 million on the system (the original cost was $15 million)…..”

We feel this is a misleading statement and leaves room for misinterpretation because the two amounts shown ($70 million and $15 million) represent different sets of expenditures. The $70 million figure includes costs of state resources and of other vendors providing MECMS related-support and oversight to the state, far beyond that which was paid just to CNSI. CNSI has been paid approximately $24 million for its development efforts of the system (far from the $70 million figure). The $15 million figure reflects only the original contract value to CNSI – not the original budgeted cost of the project including State resources, IV&V contractor resources and others.

We believe it is also misleading to present budgeted and actual figures without comparing budgeted and actual scope. The size of the MaineCare program has more than doubled in the five years since the state signed the original contract with CNSI, which changed the technical requirements of the system, requiring far more infrastructure and resources than anticipated back in 2001. Additionally, as the State’s requirements changed over the years, CNSI received multiple change orders for new functionality to be incorporated in MECMS with a value of approximately $9 million.

2.“Right from the start, however, the system had numerous software problems, which caused many Medicaid recipients to not receive health care ….”

There were several challenges encountered when the new system went live, but only a limited number of issues can be attributed to software problems. There were a number of challenges on the business side of the implementation, where certain “readiness” and training tasks (not part of CNSI’s scope of work), critical to implementation of such a large system, were not done in a timely fashion.

Also, to say the problems caused many Medicaid recipients to not receive healthcare is a gross exaggeration. That was not the case at all. While providers did not immediately receive payment, we have not received any reports of patients being denied healthcare when the system went live. The system does not provide healthcare to recipients, it only adjudicates provider-submitted claims for payment.

3.“….the state decided to kill the system and seek to outsource the claims processing.”

The State has not “killed the system.” In fact, CNSI recently entered into an 18-month engagement with Maine to provide ongoing operations and maintenance services for MECMS. MECMS will be in operation until the state finds a fiscal agent, which is by no means a risk-free solution to the problems encountered in the past. Rather than an indication of dissatisfaction with MECMS, the shift to a fiscal agent model demonstrates an overall shift in the State’s management of Medicaid claims from an in-house model to an outsourced model, which is the norm in the U.S. (36 of 50 states).

The fiscal agent may seek to implement a new solution or to transfer an older system from another state, but anyone familiar with this industry knows that these projects are extremely challenging and that even “experienced” fiscal agents – multi-billion dollar companies with extensive Medicaid experience – regularly encounter huge delays and cost overruns. I encourage you to take a close look at recent Medicaid implementations by fiscal agents in the states of North Carolina, Georgia, Alaska, Kentucky, Louisiana, and Tennessee. All of these implementations experienced significant problems, and in many cases the fiscal agent’s contract was cancelled for failing to implement the Medicaid system. I also encourage you to look at current Medicaid implementation projects such as Massachusetts, Oregon, Kentucky, Alabama, and New Hampshire. All of these projects are scheduled to be at or near completion, but none will be on time.

Maine is still working with CNSI – I think that says something. CNSI and Maine have made tremendous progress in the last year. MECMS is working far better than the legacy system. In fact, it is adjudicating claims at a rate higher than most of today’s state and commercial payers. Today, MECMS is processing 100% of the claims received. The clean claim percentage (percentage of claims processed to the end in the first pass without manual intervention) is approximately 96%. The equivalent number for the legacy system was about 70%.

In closing, we recognize there were some challenges on the project – on the part of both CNSI and the State. CNSI and the Maine Department of Health and Human Services (DHHS) have worked hard to move beyond system constraints and produce a functioning effective system. Neither party took this matter lightly. Both CNSI and DHHS employees working on this project are highly committed to ensuring every last provider is paid what he is owed. We have made tremendous progress and have ensured providers are making proper use of the system. The pool of suspended claims has been greatly reduced. CNSI continues to develop new functionality to help the State resolve outstanding issues with the provider community. Furthermore, we have applied the lessons learned from Maine to our other MMIS projects – Washington and Michigan, which are much larger in scope than MECMS. Both are on schedule and within budget. We hope our lessons learned will help other states as they modernize their Medicaid Management Information Systems. CNSI would look forward to any further communication on this subject. I welcome your response.

Respectfully,

Dr. Vivek Gore
Vice President of Technology, CNSI