B2B Payments

State’s Aging Computer System Causing Payment Delays To Health Providers

Computers can get old quickly in these days of fast innovation. The state of Florida is finding that out quickly, as its 30-year-old system for allocating payments isn’t keeping up with the times, or its payment-due dates with physicians and hospitals.

An aging computer system in Florida is creating problems for the state’s ability to pay healthcare providers on time, as limits in how much can be doled out daily is forcing the agency responsible for the allocations to again stagger payments over time instead in larger lump sums.

Florida’s 30-year-old computer system that manages the accounting process is unable to distribute more than $1 billion over a 24-hour period. It simply wasn’t designed to distribute that much. Subsequently, it reportedly had to delay payments twice last month when it exceeded the limit.

Causing the problem are Medicaid-program changes that are part of a major system overhaul that’s now underway. Whereas the state once was able to make payments to providers over time, it now is making them in larger sums.  Or at least it was until the limit problem cropped up, which also is affecting payments to other agencies as well, including for education.

The situation is not unexpected, however, as various lawmakers and former agency heads in the state warned last year of the system’s limitations.

In response to the payout-limit issue, the Tallahassee Democrat reports, the Florida Department of Financial Services, which oversees the accounting system, asked each of the state’s agencies to let it know in advance when they need to make any payments exceeding $5 million.

“When this program was created, there wasn’t the expectation we would be hitting a 1 billion number on a 24-hour basis,” Chris Cate, a spokesperson for Chief Financial Officer Jeff Atwater, said in an interview.

A study the state released in March found the system will cost up to $500 million to replace, so it may be a few years before the state can act on plans to replace it. State lawmakers this year set aside $9 million, which would cover only the planning phase for the project. An earlier attempt to replace the system in 2007 was scrapped after taxpayers had paid $100 million for a failed replacement.

WFSU reported in October that the one state lawmaker believed that situation might have made officials afraid of trying again.

“The staff that was here when that project bombed certainly remembers it, and you know that’s one of the fortunate things is we have very good staff working with us and for us, and we can rely a whole lot on what they say,” Republican state Sen. Alan Hayes told the publication. “But yeah, there’s definitely a very large precautionary attitude towards this next system.”

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