State blames providers for Medicaid payment delays

While a new statewide computer system designed to process Medicaid payments to health care providers has had its issues, it really is the providers themselves who are to blame for getting paid late, state officials said Wednesday.

Chris Underwood, who oversees implementation of the new system for the Colorado Department of Health Care Policy and Financing, told a legislative panel that the bulk of the late payments health care providers are seeing are because many of them haven’t been using the complicated new system correctly.

Some of that was because some providers didn’t register with the system as a qualified provider, while other issues arose from qualified providers who weren’t filling out their billing requests properly, Underwood told the Legislature’s Joint Technology Committee, which oversees capital funding requests for state computer systems.

“There is still a lot of effort to get the providers enrolled properly and help them understand how to use the new system,” Underwood said. “While some outstanding system issues requiring solutions do occur, the system is mostly working as designed.”

A group of provider associations, however, told the committee that while many of their members are having specific problems learning the new system, they said the department didn’t provide enough training on how to use it.

The groups, such as the Colorado Hospital Association and the Colorado Academy of Family Physicians, said changes in billing procedures under the new system were too much too fast compared to the old system, and have caused many of their members to spend hours of their own time dealing with billing issues, rather than patient treatment.

They said the end result has been a major cash flow problem for the providers, causing some to curtail serving some Medicaid patients.

Some providers have even been forced to forgo paying themselves or adding new workers.

“I don’t think our provider community anticipated the extent and the length of time that the problems have persisted,” said Sue Williamson, executive director of the Children’s Healthcare Access Program. “The disruption of that cash flow has had impacts on those providers. Many of our smaller providers, they haven’t paid themselves, they haven’t hired (to fill) vacancies, they’ve eliminated expanded hours and they haven’t been taking new Medicaid clients.”

Since the system went online in March, numerous providers across the state, including on the Western Slope, have been left waiting months for Medicaid claims to be processed and paid.

In many cases, that backlog in payments has reached into the millions of dollars.

Underwood said the new system  — something his department has been working on since 2009 — was created because of concerns from the federal government that the state wasn’t doing enough to protect against fraud and abuse.

Additionally, the new system replaces one that is more than 40 years old.

“With any change of this magnitude, we expected bumps along the way,” he said. “Moving from the very best of 1970s technology to today’s more modern, more configurable claims payment system is a significant transition.”

The system the state is using, called the Medicaid Management Information System, is the same one being used in 23 other states, with nine more to come online this year.

All of those states are using the same system created by the Virginia-based company, DXC Technology.

Underwood said that the federal Centers for Medicare and Medicaid System, which has called for billing system upgrades nationwide, has seen numerous failures of similar systems, but don’t consider Colorado to be one of them.

“This isn’t a failure,” he said. “This is a rocky start.”

Stu Bailey, vice president of state and local government health care for DXC, said none of those failures was due to his company’s system.

Underwood said that part of the difficulties providers and the department faced was how claims are filed under the new system.

In the past, for example, providers that had more than one clinic only had to file a claim under a single entity.

Under the new system, the claims must specify from which of its clinics the claims stem. If they don’t, they are automatically rejected.

As a result, the system now lists more than 50,000 providers in the state.

Each one had to be licensed and credentialed before their claims could be honored, Underwood said.

One drawback of the system, Underwood admitted, was that it is designed to reject a claim when it encounters an error. As a result, it doesn’t check the rest of a filing for additional errors.

Consequently, the system will tell a provider where an error has occurred, but if it includes others, the claim will continue to be rejected until it is error-free.

Underwood said he expects the new system to be operating properly, with providers filing fewer error-free claims, by January.

State Rep. Dan Thurlow, R-Grand Junction and a member of the Joint Technology Committee, said in an email: “I am disappointed that HCPF does not seem to have a plan to improve the performance of the Colorado Interchange claims processing program. I will continue to urge them to seek outside help and pay for it with money currently going to the vendor that has provided the failing program. Colorado Medicaid providers deserve better performance from their public servants.”


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