Maine Hospital Association,

November 1, 2006

Governor John E. Baldacci
One State House Station
Augusta, ME 04333-0001

Dear Governor Baldacci:

I know you are aware of the many problems that remain with the Medicaid Claims Management System (MECMS) a full twenty months after the new system was implemented. All health care providers, including hospitals, are impacted by the numerous problems that continue to exist with the system, however, hospitals are disproportionately impacted by the inability of the system to process Part A Crossover Claims for patients who are dually eligible for both Medicare and MaineCare.

The State of Maine made a policy decision in 1999 to discontinue payment of these Part A Crossover claims to hospitals while continuing to pay these claims for nursing homes, physicians, and other providers. A primary reason for this decision was that these unpaid claims become bad debt when processed and denied by the State and the Medicare program then pays 70-100% of that same claim when it is re-filed with the Federal Government. In 2004, Maine hospitals received $15.8 million in federal Medicare reimbursement upon the State's processing of these claims and we expected to have received over $16 million in 2005 and an additional $17 million in 2006.

Due to the MECMS problems, the State is unable to process any of these claims for either 2005 or 2006 which is putting the entire $33 million in jeopardy. We realize DHHS staff has been working very hard trying to fix this problem for close to a year but the simple fact is that it hasn't been fixed to date. We were notified last week that it would be at least January of 2007, a full two years after the problem was initially identified, until the problem might be corrected. This is unacceptable considering the latest date that ten Maine hospitals have to file the MaineCare data with the Federal government is November 30, 2006. If this data is not available by the end of November, CMS will recover approximately $3 million on December 1, 2006 with the remaining $30 million recovered from the other 29 hospitals over the next 24 months.

Hospitals were told by the Department of Health and Human Services last winter that this problem would be fixed by March 30, 2006 which obviously didn't happen. We were then told that the problem would be fixed by July 1, 2006 and then subsequently told that it would be fixed by October 2006. Unfortunately each of these target dates was missed and we are now told to wait
until some time next year and furthermore to return millions of dollars to the Medicare program that should be going to pay for the hospital care of patients dually eligible for Medicare and MaineCare.

Clearly, fixing the system as soon as possible to properly process these Part A Crossover Claims needs to be a priority so this problem doesn't become any larger. More importantly, however, we ask that you contact the Centers for Medicare and Medicaid Services directly and do everything within your power to help the Maine Hospital Association convince CMS not to begin the December 1, 2006 recovery process for any Medicare funds from Maine hospitals due to the fact that MECMS is unable to properly process these claims.

David Winslow from MHA has started to work on these CMS communications with Commissioner Harvey and OMS Director Hall. We ask that you put the full efforts of your administration behind the effort and intervene personally with CMS when necessary.

Please feel free to contact me with any questions that you have regarding this important issue.

Sincerely,

Steven R. Michaud
President

cc: Brenda Harvey

Advocacy