New York state’s botched effort to modernize its Medicaid billing system is becoming an increasingly costly mistake.

Over the past decade, the state has paid a Virginia-based IT company nearly $1 billion to set up and operate a Medicaid billing and processing system hobbled by delays, cost overruns and programming flaws.

State audits have criticized the payments to Computer Sciences Corp. as excessive. But the total is likely to grow by hundreds of millions of dollars, as longstanding plans to pull the plug on the contract and replace the system appear to have been put on hold.

Known as eMedNY, the state’s Medicaid management information system is the largest of its kind in the nation, processing roughly $47 billion in claims a year—12 claims a second. It’s the system that mails checks to tens of thousands of doctors, hospitals, nursing homes and others enrolled in the insurance program. And it serves as the main Medicaid data hub for financial reporting, quality measures, auditing and fraud control.

Dozens of state audits and reports have pointed to problems with the billing system, prompting the state in 2007 to start looking for a new vendor.

Now, the Cuomo administration is strongly considering shelving those plans, according to individuals familiar with the administration’s thinking.

Health officials, who issued a request for proposals for a new system last year, had been planning to award a new contract by the end of the year. At least two other companies are vying for the contract, including Hewlett-Packard and Affiliated Computer Services, a division of Xerox.

Cuomo officials now say they’re rethinking the entire plan and conducting a broader review of the state’s billing system. That’s left the status of the contract in limbo—and payments to CSC flowing indefinitely.

The administration says the Medicaid program’s move toward managed care and away from fee-for-service means that managed-care companies will assume more responsibility over the review of payment claims. Officials say the state may not need the same kind of billing and data system it had originally sought. Cuomo officials say they intend to complete their review by the end of the summer.

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