AUGUSTA, Maine — As officials work to nail down how much a Medicaid computer error will cost the state, the problem’s potential scope has widened.

The Department of Health and Human Services originally estimated that the error led the state’s Medicaid program, known as MaineCare, to continue paying medical bills for up to 19,000 beneficiaries after they lost eligibility through the end of last year. A March 30 report by a working group looking into the bad payments refers to an additional 5,300 people who mistakenly received coverage from Jan. 2 to March 10 of this year.

The computer system that pays MaineCare claims doesn’t communicate properly with a separate system that tracks eligibility, according to DHHS officials.

The group sorting through the problem includes DHHS Commissioner Mary Mayhew; State Controller Terry Brann; Chief Information Officer Jim Smith; the payment system’s vendor, Molina Medicaid Solutions; and a subcontractor, Goold Health Systems.

DHHS anticipated that additional recipients would be added to the mix, Mayhew said Wednesday night. The billing system undergoes regular fixes to address a long list of problems dating to its implementation in September 2010, she said.

One of those fixes finally closed the 19,000 cases in early January, Mayhew said.

“That fix was only able to close the cases retrospectively,” she said. “As we continued to receive feeds from the eligibility system, that same core issue still existed.”

The working group is expected to brief the Legislature’s Appropriations Committee again on Friday. Late April has been set as the target date for attaching a dollar figure to the MaineCare payment error, Mayhew said.

The financial impact of the additional 5,300 recipients will be assessed separately, she said.

“We are looking holistically at the entire system and the connection with the eligibility system and re-evaluating all of the current priorities and issues that need to be addressed in the system,” she said.

Beginning in September 2010, some MaineCare recipients were sent letters notifying them that they had lost eligibility but MaineCare cards remained active for those ineligible recipients.

Beneficiaries can cycle on and off the program as their personal circumstances change, such as getting a pay raise or signing up for private insurance.

In cases where these patients went to the hospital or used other medical services, MaineCare erroneously picked up the bill. The bad payments went to health care providers, not to individual recipients.

Mayhew has said providers had no way of knowing which patients no longer were eligible for MaineCare.

The problem, dating back two years, has inflamed partisan discord in the Legislature. Democrats have called for an independent investigation of DHHS, accusing administration officials of covering up the problem while the Legislature was considering painful budget cuts earlier this year.

Republicans have defended Mayhew, noting that the MaineCare computer problems were passed on to the LePage administration after plaguing the administration of Democratic Gov. John Baldacci.

The annual state audit released Wednesday underscored DHHS’ Medicaid woes.

“The Department does not have adequate procedures to determine individual eligibility for the Medicaid and [Children’s Health Insurance] programs, to maintain records relevant to making eligibility determinations or to charge the appropriate program for the associated costs of eligible individuals,” the report reads.

“There’s clearly some lack of functionality that needs to be addressed and should be taken seriously,” State Auditor Neria Douglass said Wednesday.

Similar findings about eligibility determinations have been noted in audits each year dating back to 2005.

“Often in these cases, particularly with DHHS, we find problems and there’s an agreement there’s a problem and they say, ‘well we have a system that’s going to fix that next year,’ and then we go in and next year it’s not fixed,” Douglass said. “Then they have another new procedure for correcting the issue. It will be good when we finally get them corrected.”

Maine’s latest Medicaid billing system was implemented in September 2010 with hopes that it would make the payment troubles a thorn of the past.

“It’s still not working [fully], it’s not fixed yet,” Douglass said. “We can always hope for more.”

The audit, which covers the fiscal year ending June 30, 2011, bases its findings on actual errors, including improper payments, that occurred within a sample. It evaluates state compliance with federal programs. The federal government pays for roughly two-thirds of MaineCare’s costs.

The audit does not judge the performance of state agencies, which is the domain of the Office of Program Evaluation and Government Accountability.

I'm the health editor for the Bangor Daily News, a Bangor native, a UMaine grad, and a weekend crossword warrior. I never get sick of writing about Maine people, geeking out over health care data, and...