AUGUSTA — The state’s recently approved budget assumes that Maine will receive nearly $17 million if it can get its Medicaid billing system to meet federal standards.

Since it switched computer systems in 2005, and again last year, the state has not been able to gain federal certification. That’s important because it has been costing the state money for several years.

The state currently gets a 50 percent match from the federal government for Medicaid services — but if the system meets federal standards, the state would get a 75 percent federal match.

“We’re cautiously optimistic on certification,” said Stefanie Nadeau, director of MaineCare Services. “We are working feverishly to resolve provider issues. Unfortunately, we’ve hit a couple of bumps in the road.”

MaineCare is the state’s version of the federal Medicaid program, which provides health insurance to low-income Mainers.

For years, Paula Benson, who handles the MaineCare accounts at the Achilles Foot & Ankle Center in Augusta, has struggled to get claims handled properly in a timely manner. In January, she and her husband Daniel, a podiatrist, signed up for one of Gov. Paul LePage’s Saturday meetings with the public to express their concerns about the system.

“We showed him our error rate was at 40 percent,” she said.

LePage designated someone at the Department of Health and Human Services to take calls from Paula Benson when she had trouble with the system.

Since then, the error rate has dropped, but 50 to 60 claims out of 600 are still erroneously rejected each month, she said.

That compares to one Medicare rejection each month on about 400 claims, she said. Medicare is health coverage for the elderly.

Nadeau said the system handles a large number of claims each month — nearly 1 million — and that the state pays out $30 million in claims each week. The state is preparing for a team of federal auditors to visit the state this fall — possibly the end of September or early October — to test the system to see if it can be declared federally compliant.

Benson doubts it will be ready in time.

“I don’t think it’s realistic,” she said. “I do not think it will happen.”

The state hired Molina Healthcare, based in California, to install the new system and to run a call center where the state’s providers can get help with problems. In addition to Maine, Molina currently has contracts with Idaho, Louisiana, New Jersey and West Virginia to manage Medicaid billing systems.

There are 5,000 enrolled MaineCare providers who must process claims through the Maine system. They range from hospitals and nursing homes to podiatrists and mental health agencies.

The state does provide bridge payments to those who are having trouble getting claims processed properly. The temporary payments are designed to keep money flowing to the providers while kinks continue to get worked out of the system.

“There’s a large majority of issues still out there yet to be resolved,” Nadeau said. “If you’re the provider who is having your cash flow impacted, it does not seem like a positive experience.”

To help providers better understand the system, DHHS conducted 26 forums across the state this spring.

Members of the Legislature’s Health and Human Services Committee say they hope the department and Molina will be ready to reach compliance.

Rep. Margaret Craven, D-Lewiston, said she received a complaint about the system from a constituent about three weeks ago. She said Molina, which has run similar systems in other states, should be held accountable for reaching federal compliance.

“I’m hoping over hope we’re going to reach that threshold,” she said.

House Committee chairman, Rep. Meredith Strang Burgess, R-Cumberland, said she’s heard from developmental disabilities providers who continue to have trouble.

“As a new administration came on board, the committee made it really clear to the department that they should put as high a priority as possible to make sure the computer system becomes fully functional,” she said.

She described the $17 million in budgeted savings as a “placeholder,” noting that there will be several tests and deadlines that must be met to win certification. But she said the September 2010 switchover was done in a more thoughtful way — for one thing, they ran two systems simultaneously for several weeks — to put less stress on providers.

“We will not allow the crazy computer errors to go on like they were in the past,” she said.

Susan Cover — 620-7015

scover@mainetoday.com