AUGUSTA, Maine – The regional office of the Centers for Medicare & Medicaid Services has sent an inspection team to Maine to investigate ongoing problems with the state’s new Web-based information management system.

While emphasizing that this is a state-contractor issue, CMS spokesperson Mary Kahn said the team was dispatched in mid-September. “We are keeping a watchful eye,” she said.

The project has been “less than successful,” Kahn said, but added, “This has been a maiden voyage. Everyone’s learned something.”

According to local newspaper reports, the project has cost the state $56 million to date, far more than the original bid of $15 million. The project was original slated for full go-live in 2005, and the regional Medicaid office refused to pay any more federal reimbursement for costs overruns incurred after July 2005.

“The cost of the project increased because of additional management and oversight resources the state hired,” a spokesperson for CNSI said in response. “In addition to the size of the Medicaid program doubling (since the original bid), there have been a variety of program changes that have required new coding such as the tax and match programs on providers.”

Last year, the state instituted a reimbursement system to pay providers whose claims were not being processed in a timely manner. According to the Brunswick (ME) Times Record, Maine paid $507 million under the program and expects to be reimbursed by providers once their claims are processed.

“They have already recovered half of these interim payments and are aggressively recovering the rest,” the CNSI spokesperson said.

The Maryland-based contractor, CNSI, had worked on previous technology projects for the state but had never built a Medicaid information system before.

While CNSI continues to work towards full functionality of Maine’s Medicaid Management Information System, both parties acknowledge the lessons learned. State-approved change orders, lack of legacy-system expertise and not enough emphasis on business process reengineering were just some of the issues CNSI encountered, said Vivek Gore, PhD, vice president of technology.

“The remaining functionality is being rolled out slowly to avoid the types of issues that were encountered during the first rollout,” Gore said. “The rollout is largely driven by priorities that are based on the recommendations of the provider community. The State and CNSI are in the process of adjusting the schedule for the remaining functionality.”

Despite cost overruns and differences of opinion, Gore said that Maine’s Web-based system, the first of its kind in the Medicaid market, has increased the non-manual intervention rate from 70 percent to 80 percent, and has driven down the total number of suspended claims from 660,000 to 180,000.

Dick Thompson, Maine’s chief information officer, said he would not be completely satisfied until all functions are in place and all claims processed properly. Although he said he is pleased that the adjudication rate mirrors other states for claims processing, he said, “We still have a long way to go.”

Such is the case with Michigan, which is scrapping its 30-year-old mainframe system. Begun in April 2006, the CNSI implementation should be completed by January 2008, according to Dave McLaury, interim chief deputy director for the Michigan Department of Community Health.

Michigan’s contracted project management staff will oversee the implementation so that deliverables and milestones are met.

With a continuous stream of new policies and regulations and security issues, McLaury said, “We need this current technology to be able to react in a timely manner. We expect the CNSI system to be very favorable for our state.”