historical challenges in the eligibility system the original integrated eligibility (ie) model

Center for Public Policy Priorities www.cppp.org

House Human Services Committee80th Legislature

Testimony on the Integrated Eligibility System

February 23, 2007

Celia Hagert, Senior Policy [email protected]

(512) 320-0222 x100


• 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


• 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


• 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• Out-of-date technology has lead to duplication of effort and “red tape”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




• 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


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


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


The original IE model

Benefits(TANF,

Food StampsMedicaid,

CHIP)

HHSCResponsibilities

Application Options

Self Service• Phone• Mail/Fax• Web

Assisted Service• TAA• HHSC Benefits Office

Clients

TAA Responsibilities

Support of EligibilityScreenCollect data for

applications and re-determinations

Process documentsEnrollmentSelect networkManage enrollment SupportMake data changesHandle inquiriesRefer fraud/abuseProcess 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


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


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


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


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


Permanent vs. Temporary Staff

6,920 6,6376,247

5,612

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Permanent FTEs

Temporary FTEs

Total

Oct 04 Apr 05 Oct 05 May 06


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)


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


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


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


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”


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

Staffing Levels for FY 08-09 (if exceptional item funded)

66976,920 6,637

6,247

5,612

6,309

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Permanent FTEs

Temporary FTEs

Total


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


Downsizing of Eligibility Workforce Increased Workload1996-2006

0

2000

4000

6000

8000

10000

12000

14000

1996 2003 2004 2006

Num

ber

of s

taff

200

300

400

500

600

700

800

900

1000

1100

Ave

rage

wor

kloa

d pe

r w

orke

r

Number of staff

Averagew orkload perw orker


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


Timeliness - StatewidePercent of New Applications Processed Timely, January 07

Medicaid Food Stamps TANF

Region 1 96.6% 95.3% 95.2%

Region 2 92.8% 91.2% 92.4%

Region 3 81.7% 72.2% 78.3%

Region 4 96.3% 94.3% 95.9%

Region 5 93.2% 91.0% 94.5%

Region 6 87.9% 84.2% 88.5%

Region 7 68.9% 78.9% 84.6%

Region 8 96.5% 93.4% 97.0%

Region 9 93.3% 92.6% 93.7%

Region 10 94.3% 96.6% 94.7%

Region 11 97.0% 90.8% 92.8%

Region 00 98.1% 75.3% 0.0%

State 86.9% 84.6% 88.6%

Federal standard = 95%


Timeliness – past 12 monthsTimeliness in New Application Processing

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

May-06

Jun-06

Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Per

cent

pro

cess

ed ti

mel

y

FS

TANF

Medicaid

Federal standard = 95%


Timeliness – DFW (Region 3)Region 3 Food Stamp Timeliness

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07

Federal Timeliness Standard


Timeliness – DFW (Region 3)Region 3 Medicaid Timeliness

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%




Timeliness – Houston (Region 6)Region 6 Food Stamp Timeliness

60.0%

65.0%70.0%

75.0%

80.0%

85.0%90.0%

95.0%

100.0%




Timeliness – Pilot Area (Region 7)Region 7 Pilot AreaFood Stamp Timeliness

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%




Timeliness – Pilot Area (Region 7)Region 7 Pilot AreaMedicaid Timeliness

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%




Food Stamp Error Rates

Texas Food Stamp Error Rates Increase in Federal Fiscal 2006

Oct. 05 4.47%

Oct. 05 - Nov. 05 4.57%

Oct. 05 - Dec. 05 5.67%

Oct. 05 - Jan. 05 5.96%

Oct. 05 - Feb. 06 6.77%

Oct. 05 - Mar. 06 6.95%

Oct. 05 - Apr. 06 6.86%

Source: Health and Human Services Commission


Error Rate ComparisonFood Stamp Rates in the Big Eight States in FFY 05 & 06

State FY 05 Cumulative Error Rates

Rank in 05 (lowest to highest)

FY 06 YTD Cumulative Error Rates

(through May 06)

Rank in 06 (lowest to highest)

Pennsylvania 4.51% 1 2.96% 1 Texas 5.03% 2 6.82% 5 Illinois 5.75% 3 6.20% 4 California 6.38% 4 6.06% 3 Florida 7.19% 5 9.38% 8 New York 7.23% 6 5.23% 2 Michigan 7.34% 7 7.07% 7 Ohio 8.65% 8 7.01% 6 United States

5.84% 5.75%

SOURCE: Summary data reported by states to USDA's Food and Nutrition Service. Data for FY 05 are preliminary as of 2/1/06. Data for FY 06 are unweighted and preliminary as of 9/22/06.


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.

Food Stamp Recipients, FY 2005-present

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

FY 200

2

FY 200

4

Nov-0

5

Jan-

06

Mar

-06

May

-06

Jul-0

6

Sep-0

6

Nov-0

6

Jan-

07

Katrina growth

FY'05 = 2.44 million Now = 2.32 million-5% drop since FY 05

Dec '05 peak = 2.92 million


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.

County Sep-05 Dec-07 Change % Change

STATE 190,989 151,890 -39,099 -20%

Harris 27,240 19,339 -7,901 -29%

Hidalgo 24,965 23,179 -1,786 -7%

Dallas 17,188 12,171 -5,017 -29%

Bexar 12,773 9,234 -3,539 -28%

El Paso 12,740 10,683 -2,057 -16%

Cameron 11,824 10,522 -1,302 -11%

Tarrant 10,240 7,415 -2,825 -28%

Travis 6,171 NA NA NA

Hays 373 NA NA NA


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?


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


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


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