When you think of new high-tech software packages that change the way we live and work, the software giant of the Northwest may come to mind. But in the other corner of the country, Maine's Bureau of Medical Services has implemented a network-based, distributed three-tier client/server tour de force. It has several success stories to crow about, and that is exactly what Jim Gorman, the bureau's deputy director, has been doing recently.

Eighteen months ago, Maine deployed a point of purchase online system to every pharmacy in the state. In September 1995, the state rejected 12,000 claims to pharmacies filing for Medicaid reimbursement.

In the first month after implementation of the distributed, dial-in POS system, they rejected only nine claims. That made pharmacists happy, because they were paid what they expected without having to submit multiple claims. The low rejection rate also cut administrative costs dramatically since the bureau only had to process each claim once.

With the system, prescriptions are tracked online. This can alert pharmacists to possible adverse drug interactions, increasing recipient safety. It is also useful in detecting fraud when a recipient may fill one prescription many times at different pharmacies.

Gorman claims that the citizens of Maine benefit from the new system with "better health, saved tax dollars, lower costs to private providers and reduced fraud."

Recipe For Succes

When a Medicaid recipient presents a prescription, the pharmacist dials a 1-800 phone number. According to Gorman "the system verifies the claimant's eligibility, does a utilization review, confirms the amount the state will pay to reimburse that particular drug, [and] assures the coverage for an item. The pharmacist knows that the claim is eligible for reimbursement, exactly how much they will be paid and exactly when they will be paid all in less than one second after the enter key is hit."

Gorman is particularly proud of how Maine funded this systems effort. The vendor that built the system was not paid until after the system began delivering the anticipated benefits. The vendor receives 18 cents for each system transaction instead of time and materials or fixed-bid reimbursement.

In order to participate, each pharmacy needed a 486 PC, and all but three had their own when the system was ready. The state offered to provide PCs for the three, but each purchased their own. All these benefits, said Gorman, "cost the state zero dollars."

Make It So

When the Maine Legislature and Gov. Angus King mandated a managed-care system for Medicaid recipients, the pharmacy system success gave them the confidence to respond with an ambitious new project.

Gorman said that while they were in a hurry to meet the timetables defined in the legislation, they were still "interested in reengineering the business processes while building new information systems." They wanted to find a vendor who could build them a state-of-the-art three-tier client server system, which was scalable and would allow them to add on powerful decision support capability, using data collected as a direct by-product of medical service delivery.

So Gorman said, "We went looking for a vendor. We were a salesman's dream, talking to anyone who claimed they could do the job." But he claims that none of the traditional providers of Medicaid Management Information Systems (MMIS) demonstrated abilities that addressed the business problems or the technology goals Maine had set for itself.

As a result, Gorman and his team decided that it was not important that the vendor had subject matter expertise, because the bureau's own program experts would work on the project. What they wanted was a partner who would share the risk and effort, had a proven record in widely distributed client server systems and could integrate Maine's experts into the reengineering and development process.