Historical challenges in the eligibility system The original Integrated Eligibility (IE) model

1. House Human Services Committee80th LegislatureTestimony on the Integrated Eligibility SystemFebruary 23, 2007Celia Hagert, Senior Policy Analysthagert@cppp.org (512) 320-0222 x100

2. Overview • Historical challenges in the eligibility system • The original Integrated Eligibility (IE) model • Problems in the IE pilot • The revised IE model • Ongoing challenges – the symptoms of a troubled system • Recommendations to support a smooth transition to the new system

4. Historical challenges • Clients are not easy to serve – majority are poor; many are elderly, have disabilities, or grapple with language barriers • Application requirements are complex • Eligibility determination is complicated & requires extensive and constant training of caseworkers • Rules vary considerably by program and within programs • Labor-intensive process is costly for states & complicated for clients

5. Historical challenges • Legislature has not provided necessary staff or funding to ensure effective administration • Cut staff by 40% from 96-04 despite increasing caseloads and workload (applications grew, work became more complex) • Out-of-date technology has lead to duplication of effort and “red tape” • Chronic underfunding exacerbates other challenges

7. Historical challenges • Services to clients have suffered • Less than half of eligible households get Food Stamps • Half of uninsured kids are eligible for Medicaid/CHIP, but not enrolled • Clients frustrated, deterred • Heavy staff workload has lead to high turnover, poor customer service

8. A Vicious Cycle What happens? • System doesn’t work • Client services suffer • Public confidence in system is undermined • Alternative approach/fix sought

9. What is Integrated Eligibility? • Modernization of eligibility determination & enrollment: • Better technology & greater automation • Centralized & paperless computer system (TIERS) • Remote application options (call centers, Internet) • More partnerships with nonprofits • Privatization – “TAA” contract includes development, administration, and partial staffing of system

10. The original IE model Application Options TAA Responsibilities HHSC Responsibilities Clients Benefits (TANF, Food Stamps Medicaid, CHIP) • Self Service • Phone • Mail/Fax • Web • Support of Eligibility • Screen • Collect data for applications and re-determinations • Process documents • Enrollment • Select network • Manage enrollment Support • Make data changes • Handle inquiries • Refer fraud/abuse • Process complaints/ appeals • Determine eligibility • Certify and issue benefits instruments • Hear appeals • Provide in person assistance • Issue expedited benefits • Assisted Service • TAA • HHSC Benefits Office Source: Adapted from a graphic provided by the Texas Health and Human Services Commission

11. Assumptions in the IE Model • Better technology, smarter processes would reduce application processing time & staff workload • Technology would improve accuracy, reduce fraud & ensure better stewardship of tax dollars • Simpler process, more application options would improve access for clients • Private sector could do it better, cheaper • CBOs would support the new model by helping clients navigate the more automated system

12. Assumptions in the IE Model • Overall staff could be reduced • Many policy-knowledgeable state staff could be replaced with lower-skilled vendor staff • Fewer local offices would be needed • State would save $646 million over 5 years

13. Flaws in the IE Model • No staffing analysis to determine true needs in “old” system – staff had already been reduced 40% from 1996-2004 • No evidence to support two primary assumptions: • Fewer staff would be needed in IE model • Low-skilled, low-paid vendor staff could replace trained state staff • Staffing assumptions dependent on assumptions about technology & automation

14. Missteps in the IE Approach • Unrealistic expectations about savings • Overly aggressive timeline • Premature loss of staff • Inadequate testing & training (i.e., Max-e/TIERS interface) • Premature pilot = Delays & denials of services to clients

15. Oct 04 Apr 05 Oct 05 May 06

16. Pilot Problems • Technical problems • Computer interface didn’t work • Documents lost or couldn’t be located • Poor training of vendor staff • Unable to answer questions • Did not process applications correctly • Asked clients for wrong information • Inadequate complaint resolution process • Staffing shortages – private and public (long wait times at call center/high call abandonment rates)

17. Pilot Outcomes • Large backlogs in application processing lead to delays in services to thousands of families • More than 100,000 kids lost health coverage in first four months of the pilot • Surge in missing information requests & “procedural denials” for failure to complete application process • Rise in Food Stamp error rates

18. Federal oversight • USDA is monitoring system’s performance • Conditioned funding & contract approval on new system’s ability to maintain program access and program integrity • Hired Booz Allen as technical consultant to monitor system readiness from a technology perspective & evaluate potential risks • Conducted two reviews of pilot in 3/06 and 9/06

19. Federal oversight • USDA’s main concerns & findings • Lack of timeliness • Rise in error rates • Higher denial rates • Data collection problems – HHSC has not provided the data requested & needed to evaluate performance • Problems with TIERS, in particularly its ability to track overpayments (also noted by HHSC OIG) • Funding for further rollout remains conditional

20. Revised IE approach • Contract size & term reduced • Maintain current state staffing levels, convert many temps to permanent staff • Reduce role of vendor staff, increase role of state staff • Focus on technology • Continue with TIERS rollout • Re-launch pilot “when ready”

21. Oct 04 Apr 05 Oct 05 May 06 Oct 06 FY 08-09

22. Ongoing Challenges • Inadequate staff & heavy workload • Application delays persist - timeliness is below federal standards in most metro areas • Error rates are above national average, exposing state to potential financial penalties • These problems WON’T go away until new system rolls out AND delivers promised efficiencies

24. Timeliness – Delays • Statewide, new application timeliness is well below federal standard (95% processed within 30 days for Food Stamps/45 for Medicaid) • Delays are severe in Region 3 (DFW), Region 5 (east Texas), Region 6 (Houston), Region 7 (pilot area) • Food Stamps/TANF – worst in Regions 3, 6 & 7 • Medicaid – worst in Region 3 & 7

25. Timeliness - Statewide

26. Timeliness – past 12 months

27. Timeliness – DFW (Region 3)

28. Timeliness – DFW (Region 3)

29. Timeliness – Houston (Region 6)

30. Timeliness – Pilot Area (Region 7)

31. Timeliness – Pilot Area (Region 7)

32. Food Stamp Error Rates

33. Error Rate Comparison

34. Caseloads – Food Stamps • Notes: • The influx of Katrina evacuees makes it hard to identify caseload trends • TIERS data collection problems make it difficult to identify trends in the pilot area.

35. Caseloads – TANF • Notes: • Caseload decline is similar to previous two years – due to full family sanctions, time limits, work-first approach • TIERS data collection problems make it difficult to identify trends in the pilot area.

36. Important questions • Technology – does it work? How much does automation reduce workload? • Are there enough state staff to support the transition? • How long will it take to roll out the new system? • How many staff will be needed in the new system? • Can vulnerable populations navigate more automated system? • Does the revised model (new business processes/workflow) work? • What is the right role for a private company?

37. Recommendation #1:Improve oversight Overarching goal: prevent similar problems from occurring through better oversight • Establish legislative oversight process • Establish statutory benchmarks and criteria to evaluate IE: • Timeliness at or above federal standards • Reduce procedural denials to FY 2005 levels • Rebuild child health enrollment, stabilize caseloads • Error rates at or below national average • Use these criteria to determine whether system is performing well, contractor is meeting performance measures, and IE is ready to expand

38. Recommendation #2: Protect the vulnerable • Evaluate impact of remote application process on vulnerable populations (i.e., seniors, persons with disabilities, the homeless, people with language barriers) • Look at caseload & administrative data relevant to these populations • Survey CBOs that serve these populations • Conduct exit interviews with applicants • At the end of the day, the true test of a good system is its ability to serve the most vulnerable

39. Recommendation #3: Support contracting reforms • Improve contract writing, monitoring & enforcement by building agency capacity • Establish a means to monitor contractor performance • Strengthen conflict-of-interest provisions • Establish a sound process for making outsourcing decisions that protects clients and taxpayers