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New Medicaid System in Idaho Delaying Payments

Glitches in Idaho's new Medicaid system are delaying payments to providers, while the vendor and state plan fixes.

Horror stories about transitioning to a new IT system are common among government agencies. Unfortunately the Idaho Department of Health and Welfare (DHW) is currently experiencing one of its own.

The state's new system that disburses Medicaid funds to health-care providers of Medicaid patients has delayed payments to numerous providers since its launch in July, according to Emily Simnitt, spokeswoman for the DHW. The system subsidizes roughly 213,000 Idahoans -- mostly children, the disabled, pregnant women and low-income elderly.

The manager of the new system, Molina Healhcare Inc., has identified 18 areas of concern and solutions for each of those, Simnitt said. "Some of those have been implemented as recently as [Tuesday] night. Some are planned to be implemented this weekend," she said.

One repair completed Tuesday, Aug. 3, aimed to stop the system from holding claims in "pending mode" from patients who have no medical insurance other than Medicaid. The new system's technology is designed to screen each claim to see if the patient has third-party insurance. If the patient has third-party insurance, the system charges that policy for whatever costs it's deemed responsible. The old system quickly passed the patients who lacked third-party insurance through the system, while the new one is indefinitely holding many in pending mode.

Some affected providers have been waiting for payments for the past eight weeks.

It hasn't entirely been a technology glitch. In April, Idaho officials informed providers it was running out of money and needed to delay payments for the last three weeks of June. The state's new fiscal year started July 1, and it planned to use the funds expected to be available then for the past-due payments.

"When the fiscal year started in July, we began making payments again, but some of those claims had not been fully reimbursed," Simnitt said.

Molina is still determining how many providers aren't receiving funds, Simnitt said. Nursing homes, assisted-living homes, physician practices, clinics and hospitals receive the Medicaid dollars -- often for the purpose of paying for patient care for those without any other health insurance. Molina added staff to handle provider calls and improve system operations, and the company is researching which types of providers have been most impacted, the Idaho Statesman reported.

Electronic Data Systems (EDS) had managed Idaho's old Medicaid system for 30 years. The new system from Molina Healthcare was initially set to go live in November 2009, but was delayed for months -- until June, when the federal Centers for Medicare and Medicaid Services forced Idaho to terminate the EDS system and go live with the new one. Simnitt said preliminary testing of the Molina system had indicated it would function satisfactorily in July.

But on July 29, the Idaho Medical Association (IMA) sent a letter to the DHW reporting a flood of physician complaints. "The problems reported to the IMA are impacting all physicians and range from payment problems due to internal configuration issues to an inability to validate eligibility for clients," said IMA CEO Susie Pouliot in the letter.

Pouliot expressed doubt that the Molina system would be fixed anytime soon and recommended resuming the EDS system until the new one functions properly. Simnitt said returning to the old system was impossible because it used antiquated technology no longer supported by EDS.

The DHW will meet with Molina Healthcare on Friday for an update on when the majority of the system's problems might be resolved, according to Simnitt.


Andy Opsahl is a former staff writer and features editor for Government Technology magazine.