1. Center for Public Policy Prioritieswww.cppp.org House Human Services Committee 80 th Legislature Testimony on the Integrated Eligibility System February 23, 2007 Celia Hagert, Senior Policy Analyst hagert@cppp.org (512) 320-0222 x100 hagert@cppp.org

2. Center for Public Policy Prioritieswww.cppp.org 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 Overview

3. Center for Public Policy Prioritieswww.cppp.org

4. 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 Historical challenges

5. Center for Public Policy Prioritieswww.cppp.org 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–Cut staff by 40% from 96-04 despite increasing caseloads and workload (applications grew, work became more complex) Out-of-date technology has lead to duplication of effort and “red tape” Chronic underfunding exacerbates other challenges Historical challenges

6. Center for Public Policy Prioritieswww.cppp.org

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. Center for Public Policy Prioritieswww.cppp.org A Vicious Cycle high turnover rates staffing shortages, limited resources for automation heavy workload, lapses in customer service What happens? System doesn’t work Client services suffer Public confidence in system is undermined Alternative approach/fix sought

9. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org The original IE model Benefits (TANF, Food Stamps Medicaid, CHIP) HHSC Responsibilities Application Options Self Service Phone Mail/Fax Web Assisted Service TAA HHSC Benefits Office Clients TAA Responsibilities 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 Source: Adapted from a graphic provided by the Texas Health and Human Services Commission

11. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org Oct 04 Apr 05 Oct 05 May 06

16. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org Oct 04 Apr 05 Oct 05 May 06 Oct 06 FY 08-09

22. Center for Public Policy Prioritieswww.cppp.org 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

23. Center for Public Policy Prioritieswww.cppp.org

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. Center for Public Policy Prioritieswww.cppp.org Timeliness - Statewide Percent of New Applications Processed Timely, January 07 MedicaidFood StampsTANF Region 196.6%95.3%95.2% Region 292.8%91.2%92.4% Region 381.7%72.2%78.3% Region 496.3%94.3%95.9% Region 593.2%91.0%94.5% Region 687.9%84.2%88.5% Region 768.9%78.9%84.6% Region 896.5%93.4%97.0% Region 993.3%92.6%93.7% Region 1094.3%96.6%94.7% Region 1197.0%90.8%92.8% Region 0098.1%75.3%0.0% State86.9%84.6%88.6% Federal standard = 95%

26. Center for Public Policy Prioritieswww.cppp.org Timeliness – past 12 months

27. Center for Public Policy Prioritieswww.cppp.org Timeliness – DFW (Region 3)

28. Center for Public Policy Prioritieswww.cppp.org Timeliness – DFW (Region 3)

29. Center for Public Policy Prioritieswww.cppp.org Timeliness – Houston (Region 6)

30. Center for Public Policy Prioritieswww.cppp.org Timeliness – Pilot Area (Region 7)

31. Center for Public Policy Prioritieswww.cppp.org Timeliness – Pilot Area (Region 7)

32. Center for Public Policy Prioritieswww.cppp.org Food Stamp Error Rates Texas Food Stamp Error Rates Increase in Federal Fiscal 2006 Oct. 054.47% Oct. 05 - Nov. 054.57% Oct. 05 - Dec. 055.67% Oct. 05 - Jan. 055.96% Oct. 05 - Feb. 066.77% Oct. 05 - Mar. 066.95% Oct. 05 - Apr. 066.86% Source: Health and Human Services Commission

33. Center for Public Policy Prioritieswww.cppp.org Error Rate Comparison

34. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. CountySep-05Dec-07Change% Change STATE190,989151,890-39,099-20% Harris27,24019,339-7,901-29% Hidalgo24,96523,179-1,786-7% Dallas17,18812,171-5,017-29% Bexar12,7739,234-3,539-28% El Paso12,74010,683-2,057-16% Cameron11,82410,522-1,302-11% Tarrant10,2407,415-2,825-28% Travis6,171NA Hays373NA

36. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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. Center for Public Policy Prioritieswww.cppp.org 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