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Garry Rayno's State House Dome: Another new start date for Medicaid management system

State House Bureau

November 17. 2012 11:17PM

After years of delays, the state's new Medicaid Management Information System will begin operations April 1.

That is what Health and Human Services Commissioner Nicholas Toumpas told executive councilors last week, but several have doubts the system - initially expected to be up and running by December 2007 - will be ready in April.

Start-up dates have been set before, most recently Jan. 1.

Councilors have complained about the delays and added costs of the information system, which the contractor is developing from scratch rather than with existing processing programs from other states.

The council approved a $26 million contract with Affiliated Computer Services Inc., a Xerox company, in December 2005. Since then, the council has voted on several contract extensions and additional contracts with the current processor, Electronic Data Systems, to continue its operations.

"Frankly, we should have pulled the plug on this a long time ago," said District 3 Councilor Raymond Wieczorek, R-Manchester. "Now they are stuck."

New Hampshire is not alone. The company is working on similar systems for California, North Dakota, Montana and Alaska, which have all essentially been waiting for the company to complete the New Hampshire system as the base model.

When the contract was approved, ACS was working on a new Medicaid system for North Carolina and Georgia. Within six months, North Carolina settled with the company and went to another vendor. Georgia cancelled portions of its contract.

In New Hampshire, HHS has plugged along with ACS with oversight by the federal Center for Medicaid Services, which has told the state it needs to go forward with the project.

The new system will integrate what are now separate functions related to the state's Medicaid program and do that over the Web, not dedicated data lines.

In a letter to health care providers, Toumpas notes the new system will "identify Medicaid eligible recipients, enroll NH Medicaid providers, maintain service authorizations, check for third-party insurance coverage, adjudicate claims and determine final payment."

The overall 2005 contract with ACS for developing the new system, and for five years of operating it, was $61 million, at the time one of the largest in state history. The federal government pays between 78 and 90 percent of the costs.

According to information Toumpas provided, health care providers have been able to enroll with the department for a little less than a year and in February will have greater access to system functions.

The system will "go live" April 1, the day the contract ends with Hewlett Packard, which purchased EDS, the longtime claims processor for the state.

At last week's breakfast meeting with executive councilors, Toumpas said New Hampshire has learned from mistakes made in Maine. There, a breakdown between the Medicaid billing and payment system and the eligibility system resulted in tens of millions of dollars being paid by mistake to some providers while others did not get paid at all.

Eventually, when the state went to collect the overpayments, some of the providers were out of business.

In July, the federal HHS told Maine it had to pay back $9.2 million because of the eligibility errors.

"I don't know what is going to happen April 1, whether it starts or blows up," said Wieczorek. "The whole project is a nightmare."

Last year, Gov. John Lynch and lawmakers approved moving the state Medicaid system from a fee-for-service model to a managed care system. That system has yet to begin because hospitals and other providers have been slow to agree to terms with the three companies the state selected to oversee the new system.

Lawmakers had hoped to save $16 million this year with the managed care system, but that is impossible now, nearly halfway through the fiscal year.

Toumpas told the council the managed care program was not part of the original proposal and changes will have to be made to the new information system to accommodate it.

Other changes will also have to be made to the system once it is up and running, including enhanced provider screening and hospice and family planning services. And, he said, other related contracts will have to be extended or approved in the next few months.

ACS is supposed to make the state "whole" for the delays and to date has paid New Hampshire $1.8 million. The state and federal HHS have paid $17.4 million to ACS for its work to date. The state's share of those costs is $1.74 million.

"This has been an absolute train wreck," said Ed Dupont, who represents EDS, which lost the bid to ACS in 2005 but has continued to provide processing services since that time. "No other state has run this far behind. This is a record."

While state lawmakers debate whether to expand Medicaid eligibility under the federal Patient Protection and Affordable Care Act, known as Obamacare, they may want to wait and see how the system works first before adding 60,000 or so new clients.

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ALL FOR NAUGHT: The Legislative Ethics Committee last week issued a ruling dealing with petitions to the Redress of Grievances Committee.

The ethics committee was asked what obligation lawmakers, who bring the petitions for residents, have when dealing with private health and financial information of third parties not the object of the redress sought by the filer.

The other question asked what obligations lawmakers have if they disseminate protected information through "unofficial channels."

The ruling said lawmakers should exercise "caution and due diligence" in deciding what information should be included in a grievance petition, whether the information is accurate, protected by law from disclosure, or truly needed to make the petitioner's case.

The ruling urged similar cautions before disseminating the information through informal channels.

The Redress of Grievances Committee was reconstituted by House Speaker William O'Brien two years ago.

With Democrats in the majority once they are sworn in Dec. 5, most people expect the Redress of Grievances Committee to go back into hibernation, which will render the ethics committee opinion moot, at least for the next two years.

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LIQUOR YES, RETIREMENT NO: Two special committees O'Brien appointed this summer that had a great deal of interest, studying the liquor commission and revamping the state retirement system, are apt to have different fates with the new Democrat-controlled House.

The retirement system report, which recommends the state move new hires into a defined contribution system, much like a 401(k) account, and out of the current defined benefit system, is likely to be ignored.

Such a change was found by several actuaries to be more expensive, particularly for cities and towns, than going forward with the current system.

The liquor commission study recommends replacing the three commissioners with one commissioner and a deputy, and returning greater control over the agency's budgets and contracts to lawmakers and the Executive Council.

That study, or at least parts of it, will probably have a better chance of support.

Lawmakers will be looking for every last dime of revenue, and anything that can be done to maximize profits and reduce costs at the liquor commission is likely to find favor with lawmakers.

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Garry Rayno may be reached at

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