News Release

NEWS RELEASE

Albert Hawkins
Executive Commissioner

Date: Dec. 21, 2006
Contact: Stephanie Goodman or Ted Hughes, (512) 424-6951

HHSC Announces New Strategy to Modernize Eligibility System

AUSTIN — The Texas Health and Human Services Commission (HHSC) today announced a new strategy to modernize the state’s eligibility system and make it easier for Texans to apply for services. Under the plan, the state will retain some functions originally envisioned to be performed by the private sector, reduce the terms of the contract, and change management of the Children’s Health Insurance Program (CHIP).

"We remain committed to implementing a system that works better for consumers and makes efficient use of taxpayer dollars," said Health and Human Services Executive Commissioner Albert Hawkins. "We have evaluated the results of our pilot and concluded that we need to take a different approach to achieve our goals."

Hawkins said the new strategy includes rebalancing the roles of the state and the private sector.

"Our goal from the beginning was to design a system that efficiently supports state workers and keeps complex decision-making in the hands of trained, experienced state employees," Hawkins said. "The pilot has shown us that we need to redraw the line between the state and private sector to clarify that the private sector is there to provide a support role to state staff."

In June 2005, HHSC concluded a competitive procurement process and entered into a contract with the Texas Access Alliance (TAA) for call center operations, CHIP processing and eligibility determination, maintenance of the TIERS computer system and enrollment broker services. Most of the functions, including CHIP processing, have long been performed by the private sector. The critical new elements in the contract included establishing call centers and moving some work currently performed by state eligibility workers to the private sector.

Under the original contract, for example, vendor staff image food stamp, Medicaid and TANF applications into the system and attempt to verify some information through independent sources. If an application lists no cars and the independent check indicates the household has a car, vendor staff attempt to resolve the discrepancy before sending the case to state staff. In the rebalanced model, vendor staff will image the case into the system, run the independent checks and submit all the information promptly to state staff who will decide how to proceed.

Within the contract, management of CHIP will change with Accenture taking over responsibilities previously handled by Maximus. CHIP eligibility determination, which is less complex than most other social service benefits, has been handled by a private contractor since the program’s inception in 2000. The state changed contractors in November 2005 and has noted several ongoing performance issues since that time. The most serious issue involved unnecessary letters to CHIP applicants requesting more information. A review found that in some of the cases, the requested information was either on the original application or had been received by the subcontractor and not attached to the case properly or within required timeframes. This issue led the state to implement manual checks to ensure that families were not inappropriately disenrolled.

Other elements of the state’s new strategy include:

Modernizing technology by converting cases statewide to the state’s new computer system. In early 2007, HHSC will begin a gradual conversion of 8 million food stamp, Medicaid and TANF clients to the Texas Integrated Eligibility Redesign System (TIERS). State workers will continue to process all cases, and all state benefits offices will remain open.

Recovering $30 million in state costs through service credits and discounts.

Reducing the contract by $356 million. The original contract was valued at $899 million and expired at the end of fiscal year 2010. The revised contract is valued at $543 million and ends after fiscal year 2008.

Resuming the pilot in Travis, Hays and Williamson counties with a more limited role for the vendor in food stamp, Medicaid and TANF cases once the technology solutions are in place to support improved performance. The state will not expand the pilot beyond the current three counties during the current contract term.

Converting 900 temporary positions in eligibility offices to regular-status positions to help stabilize the state workforce.

"We recognize that modernizing a system of this size and complexity is never easy," Hawkins said. "But we remain focused on implementing a system that finally allows Texans to choose how they want to apply for services, is built on modern technology and makes the most of limited state resources."

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