A Sick Medicaid System
August 5, 2012
Maine Department of Human Services (DHS) believed that they needed a new Medicaid system so that information could be safer, accurate, and provided more functions. This new system needed to be updated with the new HIPAA requirements. DHS managers reasoned that building a new system would be easier and less expensive to maintain than upgrading and maintaining the old system (Oz, 2009). In 2001 DHS put together a proposal. They received two offers. DHS chose the lowest bid from a company called CNSI. CNSI had no experience with a Medicaid system. When trying to build this new system there was very little communication between CNSI and the medical experts. In 2003 the new governor John Baldacci merged the Department of Behavioral and Developmental Services with the Department of Human Services in the new Department of Health and Human Services (Oz, 2009). In doing this the new system was a disaster. The claims were being denied and medical providers had to take out loans and some had to close their businesses because of no payments. DHHS fell so far behind due to the system they had to hire more experts. Instead of the system costing $15 million they had to pay out $70 million and they were six years behind. Were there any factors that contributed to the project failure which were not the fault of the project team and its leaders? There were several factors that played a roll in the project failure. The first issue was the fact that they only had two RFP’s and the states head of procurement that chose the lower of the two bids. When making the decision he/she didn’t hold in account that they didn’t conduct any type of research for either company, they checked no references, they checked no past projects of CNSI, and left no room for negotiations for the more experienced company. By choosing CNSI because of the lower bid they...
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