Idaho state Health & Welfare Director Dick Armstrong says the new computerized billing system for Medicaid, which the federal government required Idaho to develop after its old system was declared obsolete, originally was supposed to begin operating in November, long before Molina Healthcare Inc. acquired the firm developing it in May. "We delayed it until February and then again until June because we believed the system was not ready for operations," Armstrong wrote this month in a letter to Medicaid providers in Idaho. "These delays consumed any cushion we had to keep the previous system available as a backup."

Under its contract with the state, Molina Healthcare could face penalties for the delays, but state officials said they're focused for now on getting the system up and running, and will consider any penalties later.