AUGUSTA -- Two local providers who accept Medicaid say they are nervous about a new state billing system in light of significant and lasting problems they've had with changes implemented five years ago.

The state Department of Health and Human Services is on schedule to switch to a new payment system early next year, five years after going live with a program that caused billing problems for hundreds of providers.

This time around, Commissioner Brenda Harvey said she expects a much smoother transition.

However, to date, only 41 percent of the state's 4,785 providers have signed up to receive payments. The deadline is Dec. 23.

"We are very confident that, when we turn on the system, we will have tested it and tested it again," she said.

Two local providers -- one that helps people with developmental disabilities; the other a podiatrist -- say they are concerned about another switchover.

"We have done everything they've told us to do to sign up," said Paula Benson, who handles the books for her Augusta podiatrist husband Dr. Daniel Benson. "I've called and I leave messages and don't get return calls. I'm so afraid. I'm very nervous."

Benson said she's been trying since Oct. 6 to activate the new account, with no success. She said she was initially optimistic that a new system would work well, be compliant with federal standards and reduce the workload in her office.

Because of problems with the old system, they've been filing requests for payments on paper.

At one point in 2007, the state owed the practice $87,000 for 334 claims dating back to 2005.

Benson said she's attended meetings to learn about the new system and can't understand why it's been so difficult to sign up.

"It's frustrating as a provider when you call to get answers and they don't return your call," she said.

Uplift Inc. in Gardiner, which serves 80 adults with developmental disabilities, was able to successfully sign up for the new program, said Heidi Mansir, executive director.

"I won't say it was easy, but we were able to do it," she said.

Just weeks after the old system launched in 2005, the state fell behind by $500,000 in payments to Uplift. Mansir said that experience has left her concerned about the new system.

"I am worried, and it's because of the process last time and the problems we ran into," she said.

On a positive note, Mansir said her finance director is pleased the state is testing the system before going live this time, and also that they've gotten more information from the state.

Any provider that accepts Medicaid payments is required to participate in the system, which includes physicians, nursing homes, group homes, hospitals and agencies that provide services for the disabled.

The new billing system cost $54 million, 90 percent of which was covered by federal funds, Harvey said. Moving forward, she said it will cost about $5 million a year to operate the system, half of which is paid by the federal government.

Eventually, the state hopes to be certified by the federal government -- something that was not possible with the old system -- which will mean additional federal funding.

The state had serious problems beginning in early 2005 when it switched to a new billing system to replace one that had been in use since 1978. Just weeks after the switchover, groups that help the mentally ill, developmentally delayed and foster parents complained that the state was thousands of dollars behind in payments.

In December of that year, the state reported a continuing backlog of 287,000 claims.

As recently as May 2007, Benson, the Augusta podiatrist, along with a Waterville clinical psychologist, continued to have problems getting state payments.

Harvey said the new system, which will be run by an outside company, has been built differently so it is more flexible when problems crop up.

By July 1, 50 state workers will be laid off as the state outsources the work.

She said the state has also trained additional staff to answer questions, particularly during the transition period.

"That isn't to say there won't be a glitch," she said. "I anticipate nothing like what happened in 2005."

Susan Cover -- 620-7015

scover@centralmaine.com