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Maine's BMS trims Medicaid, saves $3.5 million.

SOURCE: Jim Gorman Deputy Director, State of Maine Bureau of Medical Services (BMS) 249 Western Avenue Augusta, ME 04333 Fax: (207) 287-2675

PROBLEM: Welfare reform and block grant funding are shifting the financial administration and management of Medicaid from federal to state governments. States are faced with escalating medical costs for their Medicaid population and fewer federal dollars to support their needs. The previous system cost the State of Maine approximately $1 billion annually to process and pay Medicaid claims.

SOLUTION: A new system, designed with the assistance of Sapient Corporation, Cambridge, Mass., helped us get at the problem, find business issues and build technology to solve the problem.

The new system allows the BMS to communicate electronically with HMOs that will be providing Medical services for a significant portion of Maine's Medicaid population. It has the ability to enroll or disenroll individuals from a HMO, or transfer an individual from one HMO to another.

It also sends, on a daily basis, new enrollment information to HMOs and the BMS, so records are constantly kept up to date. The system enables the BMS to pay a set amount for care for each individual, regardless of what type of treatment he/she receives. If any changes are made to an individual's status, the system can automatically adjust the payment to the HMO. The system also reviews the payments made to HMOs and sends this information directly to the state's financial systems.

PLANNING: In Spring 1995, the Governor mandated a move to managed care. We needed to find a way to track our data efficiently and cost effectively. The State of Maine selected Sapient as a partner who could provide technical expertise and help redesign our organization and underlying business processes. The process for designing the solution began with a week-long workshop where a cross-functional team from the BMS convened with a team from Sapient.

The result was a new system to enroll and manage 80 percent of their Medicaid population in managed care. Sapient helped guide the State of Maine from an entirely fee-for-service Medicaid program, to a streamlined managed care model, complete with organizational, process and information systems changes to support its goal.

The first is Maine's Managed Care Enrollment and Capitation System (MECAPS) which provides the baseline for coordinated enrollment and a system for monitoring and updating Medicaid eligibility.

Also, there is a second system called Medicaid Decision Support System (MMDSS), which is the technology framework upon which the coordinated family services and decision-support analyses will be built. MMDSS will be implemented over the next three years.


* Hardware: The systems are platformed on a three-tiered client-server architecture.

* Software: The front end of MECAPS is visual basic 4.0. The front end for MMDSS is visual C++. The middle tier for MECAPS is Tuxedo and for MMDSS is Corba. Both systems utilize an Oracle 7.0 database.

* Training, services, other: Minimal training was required for MECAPS. MMDSS is more complex and will require three days of user training.

COST OF THE SOLUTION: The design, development and role out cost was $1.3 million for MECAPS and $2.8 million for MMDSS.

IMPLEMENTATION: The design for MECAPS began in Oct. 1995 and the system went live in June 1996. The design for MMDSS began in April 1996 and went live in March 1997.

STAFF, PATIENTS SERVED: MECAPS provides service for 157,000 of Maine's Medicaid patients and more than 9,000 care providers use the system each day.


* Savings: The State of Maine expects to save $3.5 million per year in administrative costs.

* Productivity: The BMS now is equipped with the information tools to help eliminate administrative waste and perform more effective analysis of the quality and cost effectiveness of the healthcare services it is providing to its Medicaid population. For example, a claim report that traditionally took up to a month to design and deliver is now completed in minutes.

* Patient care or service: The new system allows the State to monitor the quality of care through the measurement of outcomes in concert with the analyses of claims and encounter data.

ENHANCEMENTS: The Child Immunization Registry is planning with BMS and the Centers for Disease Control (in Atlanta) to leverage functionality off the MMDSS. Also, there are two other systems being developed to assist in a long-term care assessment instrument and an eligibility system for mental health services.
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Title Annotation:Government Activity; What Works; Bureau of Medical Services
Author:Gorman, Jim
Publication:Health Management Technology
Date:May 1, 1997
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