1. How important are information systems for Maine’s Department of Health and Human Services? Analyze the impact of its faulty Medicaid claims processing system.
Information systems play an important role in data management and claims processing for Maine's Dept. of Health and Human Services. Having worked with Medicaid billing and information systems in California, through their intermediary Electronic Data Systems, I am familiar with the importance that information sent through the system plays in claims reimbursement, eligibility verification and treatment authorizations. Thes information systems are very sensitive to data that passes through them and claims get rejected for the slightest of errors. Much of these functions are done through computerized systems such as those utilized by the Medicaid program in Maine. Maine relies heavily on information systems to accurately process over 100,000 claims per day and manage the privacy and medical coverage for over 260,000 of its low-income residents.
The faulty Medicaid claims processing system implemented in Maine had a significant negative impact on healthcare providers and Medicaid recipients. More specifically, providers serving Medicaid patients were not getting paid for services rendered and many were eventually forced to deny medical services to Medicaid recipients. Many healthcare providers who relied on revenue from Medicaid patients, were being faced with streneous financial challenges. Furthermore, once claims began getting processed, the system was error prone, causing an estimated $9 million in provider overpayments rsulting from payments for entire procedures rather than just those covered by Medicaid.
2. Evaluate the risks of the Medicaid claims processing system project and key risk factors.
The Medicaid claims processing project carried many inherent risks and risk factors. The largest risk that this project carried was the mismanagement of processing the data. Many healthcare providers render services daily to Medicaid recipients in the state of Maine and rely on Medicaid payments to support their practices. A major delay in claim reimbursement to those providers creates a large risk for an undesired chain of events which ultimately results in the lack of medical care provided to Medicaid recipients. Another risk for this project was that the state of Maine acquired a company with limited expertise in these sorts of claims processing systems. Although CNSI may have been able to develop an extraordinary claim processing system, they lacked the track record and experience necessary for such a project. Facing time constraints set by HIPAA regulatory compliance and receiving a lower bid from CNSI, the DHS took a big risk and rushed in accepting the RFP from CNSI.
5. If you were in charge of managing this project, what else would you have done differently to increase chances for success?
Intially, I would have done a little more research on the successful model's that other states have implemented and are running smoothly. Many other states outsource their claims processing to specialists, such as Electronic Data Systems, to manage their claims, eligibility, enrollment and treatment authorizations. I would then compare the financial feasibility and comparison of outsourcing versus enlisting a private contractor working with the current IT staff. Assuming, it was in the best interest for the residents of Maine to reject the option to outsource, I would have invested the taxpayer's money into a private contractor with a proven track record and significant history in the field. Upon deciding which contractor to use, I would require a minimum of four proposals to be submitted prior to granting any contractor the project. Once a contractor is selected and the system has been developed and completed, there would have to be a trial period of about two months, prior to complete conversion from the old claims processing, where sample claims would be processed to assure accuracy of the system
Sources: Management Information Systems Managing the Digital Firm, tenth edition. pgs. 589-591. Laudon, Kenneth C.
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