Medicaid computer changes cause trouble for doctors

Thursday, Jan. 29, 2004 | 11:15 a.m.

CARSON CITY -- Low-income families may have trouble finding doctors to care for them because of the problems of installing a new computer system for the state's Medicaid program, officials said Wednesday.

During the computer switchover, Medicaid payments to doctors, hospitals and other providers have fallen behind. Many claims have been rejected because of improper coding that adheres to the new system and other problems, said Teresa DiMarco, president of First Health Services, the company that is designing and installing the system, told the Legislative Interim Finance Committee.

DiMarco said the system should be stable by April.

It's a nearly $24 million computer system. The federal government is paying $21 million of the cost and the state is paying the rest.

Sen. Ray Rawson, R-Las Vegas, said "a significant number of (health care) providers" no longer accept Medicaid patients because they couldn't get prompt payment for treating those patients.

Medicaid is the federal and state program that reimburses physicians for health care provided to people who can't cover the costs themselves or with insurance.

Assembly Minority Leader Lynn Hettrick, R-Minden, said he met earlier this month in Las Vegas with physicians who are "little providers." He said they are not getting paid within 90 days and some are "on the verge of going out of business. They can't even pay their phone bill."

"We need to make sure these people get enough money to survive," said Hettrick.

Charles Duarte, administrator of Medicaid, said it has advanced $90 million to health care providers who have submitted bills that have not been processed.

Duarte said he has written a letter to First Health putting it on notice that it must make significant progress by Feb. 6 or the state will seek liquidated damages from the company.

Assembly Speaker Richard Perkins, D-Henderson, said doctors are getting their claims rejected and they don't know how to fix them.

The switch is from a manual system run by Anthem Blue Cross & Blue Shield to the electronic system developed by First Health. DiMarco said doctors and hospitals in the past would submit claims to the state that were not filled out correctly or were missing information. Employees of Anthem would then make the corrections.

But that changed with the computer system. She said her employees have been working with physician groups, hospitals and others to cure the problem. And more training is planned.

DiMarco said traditionally it takes 18 to 24 months to install and test these new systems. In this case, the company had only 12 months because the state had to meet a federal deadline of last October to comply with federal privacy requirements. It met the deadline but the problems of nonpayment mounted.

She said that as of Jan. 24, there were 110,444 unpaid claims that are 31 to 90 days old. And there were 1,206 claims that are more than 90 days old. But, she said, the payment schedule has increased. In December the company paid 55 percent of the estimated $65 million in claims. So far this month, it had paid 88 percent of the estimated $75 million in claims.

But Rawson noted that while the claims payment rate is going up, the "error rate remains just as high," referring to the claims that are rejected. "We're not accomplishing anything if the computer is still rejecting them (the claims)."

The Interim Finance Committee on Wednesday also:

-- Approved the application of the state prison to spend $135,000 to buy 22.5 acres of BLM land adjacent to the Jean prison. It would be turned into an industrial park operated by private companies. Howard Skolnik, assistant director in the state Department of Corrections, said it would employ up to 2,000 inmates at minimum wage. Assemblyman Morse Arberry, D-Las Vegas, chairman of the finance committee, said he hoped it didn't turn into a "white elephant."

-- Approved allowing the prison at Jean to lease land to Ivanpah Energy Center to build a wastewater treatment plant to use the treated water for cooling its power plant to be built nearby.

-- Approved the plans for a lease-purchase agreement for the construction of a 120,000-square-foot building for the state Department of Conservation and Natural Resources in Carson City. The building will cost $21 million to be built by a private company and the state will lease it back for 27 years paying more than $70 million. State Treasurer Brian Krolicki told the committee the agency is now leasing office space and will spend that amount of money in rent during this period. The state will end up with ownership of the building, which is 30,000 square feet more than what is now being rented. The agreement still must be approved a second time by the state Finance Board.