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.
They ended up contracting with Sapient Corp. of Cambridge, Mass. Gorman said, "They had built the kind of system we wanted for Public Service Gas and Electric and Wells Fargo and demonstrated an approach based on intensive effort of a cross-disciplinary team, with clients providing experts in the business program and the current system and Sapient providing the methodology, facilitators and the technical team members." So Maine gave Sapient the contract and got to work.
Nine-Months to Rollout
The effort resulted in the Maine Enrollment and Capitation System (MECAPS). "In nine months, we went from project start to full system roll out. And it worked!" In fact, the system was ready before the program was ready to use it.
The system is expected to save the state over $7 million in program costs during its first three years of operation.
Gorman claims that the system has proven to be fully scalable, "They could run it in New York state by adding servers or segmenting the system" because of its three-tier architecture. He added that, "As far as I know, we are the first in the country with a client/server system for combined enrollment and capitation within the same system. With this combination we took reconciliation, which had been a nightmare -- and it is for every other state -- and created a situation where it is not even an issue at all. It's automatic, there is no reconciliation necessary."
The reengineering of processes didn't stop the with development and operation of the system. The way in which clients interact with the system changed, as well. Gorman explained that, "Instead of a carte blanche process where the client directed their own access to the health care system," the new process "identifies a primary care provider to manage access to the system." He says that, in the new system, "the doctor works for us. The doctor or the HMO are incented by receiving money each month for each client they manage, and if they can keep the client happy and healthy they will continue receiving the payments." The state expects to benefit with fewer emergency room visits, better utilization of specialists and better prevention of severe illness.
Gorman says that his biggest problem is that "no one other than our own bureau understands the impact this system has had on the Medicaid process, more people need to know." Too many people know about the big health and human services systems failures, "but other states should benefit from our success."
Larry Singer -- an expert on strategic computing with 12 years experience in the information technology industry serving all levels of government -- is president of Public Interest Breakthroughs Inc., of Vienna, Va.
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