In 1996 the Health Insurance and Accountability Act (HIPPA) was signed into law. The states had until October 1, 2002 to comply with the new law. This law required states to comply with its new patient privacy and security standards. According to the official website provided by the U.S. Department of Health and Human Services, HIPPA is explained as:
The HIPPA Privacy Rule provides federal protections for personal health information held by covered entities and gives patients an array of rights with respect to that information. At the same time, the Privacy Rule is balanced so that it permits the disclosure of personal health information needed for patient care and other ...view middle of the document...
This system was processing over 100,000 Medicaid claims per week. However, it was deemed obsolete and unable to support HIPPA requirements. The interesting thing here is that many of the states were developing Web portals to integrate into the front end of their existing systems. Therefore, Maine decided to step out on its own, without a model to examine or someone else to request assistance from. They were on their own and no one could have foreseen the impending disaster they were about to inflict on themselves.
Maine's Request for Proposal
Like many of the other state, Maine put out a Request for Proposal in April 2001, and in October 2001 selected CNSI to head up the project. They actually only had two companies to choose from and CNSI's bid was half of its competitor. CNSI's contract called on them to produce a system before the October 1, 2002 deadline, a whole 12 months away. So, CNSI with the help of the IT staff of the Department of Human Services set out to meet that deadline, which would prove to be a futile effort. CNSI had no experience with a Medicaid claims system and as mentioned before, they could not go out-of-state for assistance. The system was delivered late and "did not become fully operational until January 2008." (Laudon, 2007, ¶11)
Key Risk Factors
Case Study 4
Many key risk factors were involved in this project, much like any other project of this magnitude. The time constraint and the budget proved to be insurmountable. There was no time for testing so corners were cut, as is always the case when the deadline is approaching. "There was also no backup or parallel system to support the deployment because the legacy system was incompatible with the new code numbers and a parallel system was not feasible economically or technically." (Laudon, 2007, ¶10) This meant that once the project started, there could be no looking back, no stopping, only progress good, or bad it no longer mattered. Something had to be done or else Maine's 260,000 Medicaid recipients would not have the coverage they needed.
Their legacy system
As previously mentioned, Maine decided to go it alone, scrapping their existing legacy system for a newer, more capable system. Therefore, when things got tough, they had no one to approach for help. They had no model that they could look at and copy. Mostly all the states were using its older systems with some new upgrades. This left Maine to go it alone, and it proved to be quite the challenge. They also decided to embark on this adventure using a contractor that had no experience with the Medicaid claims system. True, they saved 15 million dollars by selecting CNSI, but most likely lost that in delays, inconsistencies, and utter failure. In this case, the old saying "You get what you pay for," is quite àpropos.
Lack of training
By not providing the necessary training to the providers, Maine was setting herself up for chaos. Not only did they fail...