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Saturday, September 26, 2009

Ind. Gov't. - Still more on: Daniels' welfare privatization: Too big to fail? Shouldn't we be working on a Plan B?

Updating this ILB entry from Sept. 22nd, a number of stories today cover yesterday's testimony of Family and Social Services Administration (FSSA) Secretary Anne Murphy before the State Budget Committee.

Ken Kusmur of the AP has good coverage, but local papers have truncated it. What looks to be the entire story is available here from Forbes. Some quotes:

Murphy said a team from IBM Corp. has made improvements to its system by improving its technology and adding staff. But she said the timeliness of processing applications for food stamps, Medicaid and other benefits has not improved, a problem she attributed to too little in-person contact.

"There has been a loss of the face-to-face interaction," Murphy said. "We think a lot of the errors that we're seeing are the result of not having sufficient face-to-face interaction with the client." * * *

Critics have complained about lost documents, lengthy approvals for benefits and other problems with the new system, and Murphy has given the contractors until the end of this month to fix a host of problems.

Among them, a complaint from both advocates for welfare recipients and lawmakers about a lack of face-to-face contact that largely began when Indiana moved about 1,500 state caseworkers to the IBM team in March 2007.

Murphy said the state does not want to return to the old system, in which every welfare recipient had a single caseworker. She said her department wants to find a balance between the old system and the new technology-driven system, which uses call centers and document imaging and gives both state caseworkers and their private partners access to the files of every welfare recipient. * * *

Sen. Luke Kenley, R-Noblesville, was among the lawmakers who questioned whether the state is getting its money's worth from IBM and its partners. Kenley said the budget committee will continue examining the contract through much of the fall. "This is only the beginning of this discussion," Kenley said.

Angela Mapes-Turner has this report in the Fort Wayne Journal Gazette. Some quotes:
State officials claimed Friday that they’re closely monitoring Indiana’s failing attempt to privatize welfare. But they admitted to lawmakers that they don’t know what the penalties might be for not meeting federal standards.

Lawmakers pressed Anne Murphy, secretary of the Family and Social Services Administration, for details on how a 10-year, $1.16 billion deal with IBM Corp. can be salvaged and what progress has been made since the state ordered corrective steps July 1. * * *

Murphy told the state budget committee that no decision has been made on whether to cancel the IBM contract and that she won’t decide until next month.

She would not say how much the problems are costing the state compared with the old system, or how much the federal government might fine Indiana if benchmarks for food stamp and Medicaid services aren’t met.

Rep. Dennis Avery, D-Evansville, asked Murphy why more details of how the state is planning to fix the system have not been made public. She replied that the details are part of an ongoing investigation by Daniels’ administration. * * *

She presented oft-repeated details about why the state entered into the contract with IBM in the first place: low client satisfaction, high error rates.

But in response to questioning by lawmakers, she said there has not yet been a survey of client satisfaction in areas under the new system, and current error rates are not available to present to the board. * * *

Some opponents pushed to scrap the contract. Rep. Gail Riecken, D-Evansville, who pushed legislators during the special session for an independent audit, told the panel Friday it’s too late for that.

“We are beyond the time for audits and investigations,” she said. “We know there are problems. We also know that the neediest of our citizens cannot wait any longer for these vital health care services.”

The state budget committee will form a subcommittee to study the issue.

Committee Chairman Sen. Luke Kenley, R-Noblesville, seemed to say the billion-dollar deal could be saved so long as some services were being rendered. He pointed out that the number of Hoosiers receiving assistance is higher than ever.

“We fixed the BMV,” Kenley said with a laugh. He defended a comparison of the two agencies, saying both deal with people on a one-on-one basis.

“I don’t think we know the answer whether or not we are really hurting a lot of people,” he said. “There are obviously individual cases that are not being taken care of adequately, but … many more people are receiving services, so somehow the services are getting out.”

From Eric Bradner's coverage in the Evansville Courier & Press:
Sparks flew this afternoon as a state fiscal panel held the first hearing of its investigation into Gov. Mitch Daniels’ administration’s often-criticized effort to modernize the way Indiana handles welfare applications. * * *

The most tense moment came when state Rep. Dennis Avery, D-Evansville, told Murphy he understands the agency is closely monitoring the new system’s performance but won’t release that information.

“So the public has no idea,” Avery said.

“We have said that those are internal documents,” Murphy answered.

The exchange prompted the committee’s chairman, state Sen. Luke Kenley, R-Noblesville, to look at Avery and ask, “Is this a trial, or is this an effort to improve the system?”

Not long afterward, Rep. Gail Riecken, another Evansville Democrat, said it didn’t matter – she’d seen enough to make up her mind.

She said lawmakers should look at “the reality that the entire contract is failing” and act immediately to cancel it and sue Armonk, N.Y.-based IBM Corp. and Dallas-based Affiliated Computer Services, Inc.

“We know that there are problems,” she said. “We also know that the neediest of our citizens cannot wait any longer for vital health care services.”

Her calls for change were echoed by others Friday. * * *

The meeting had been viewed as an important development because the vendors have promised results. FSSA Secretary Anne Murphy said this summer that the vendors are implementing a “corrective-action plan,” and that she expects improvements by now.

But other than intense questioning and requests for more data, the panel essentially kicked the can down the road, making plans for more meetings next month.

“It was awfully general,” Avery said of the meeting. “All efforts to get specific info were met with either ‘we don’t have it’ or ‘we can’t make that public.’” * * *

After the meeting lawmakers complained that it sounds like other than proceeding under the current contract, no other options are being considered. But Kenley disagreed, saying he thinks the Daniels administration is looking into alternate plans.

“I have a feeling they are doing that even as we speak,” he said.

From Mary Beth Schneider's story in the Indianapolis Star:
After an eruption of complaints, the state halted the program's expansion in January. So far, 59 of Indiana's 92 counties are using the modernized system. But that covers only about a third of Indiana's population, as the system doesn't include some of the state's most populous counties, including Marion and Lake.

Friday, lawmakers questioned whether taxpayers are getting their money's worth.

"It kind of boils down to about $100,000 a day that's being spent by the state, which is taxpayer dollars, for services that are not being provided," said Rep. Peggy Welch, D-Bloomington.

She and others asked for more information about the contract, including how much the state is spending because the system hasn't moved statewide. * * *

Lawmakers are not alone in questioning the IBM contract. The U.S. Department of Agriculture's Food and Nutrition Services has told the state the system's error rate is unacceptably high, and Friday, advocates for Hoosiers who get food stamps and Medicaid repeated their assertions that the system is failing the state's most vulnerable residents.

"We can't continue to experiment when people's lives are at stake," said Paul Chase, public policy director for AARP of Indiana. "A systemwide fix is needed, and it's needed now."

From Lesley Stedman Weidenbener's report in the Louisville Courier Journal:
Problems with the new system emerged shortly after it was implemented in a few counties. Advocates for the poor began complaining that some families were being kicked off services for no reason or for minor paperwork errors.

Nonprofit groups said they were overrun with people seeking help with the state applications and requesting assistance as they waited for state services.

Paul Chase, state director for AARP Indiana, told lawmakers Friday that many of those problems still occur.

“There are serious and ongoing shortcomings,” Chase said. “Too many seniors, people with disabilities and others who are our most vulnerable citizens have faced monstrous challenges” to get services.

Early this year, Family and Social Services halted the rollout, saying the companies’ performance was unacceptable. Currently, only about 35 percent of Hoosiers receiving welfare services do so under the new system. * * *

Meanwhile, budget committee Chairman Sen. Luke Kenley, R-Noblesville, said he’ll create a subcommittee to take additional testimony about the issues before the October meeting. But he warned that the committee – four lawmakers and the governor’s budget director – was in no position to order the Daniels administration to make changes.

“We can review what is being done. We can make suggestions.” Kenley said. “But the executive branch runs the offices of FSSA.”

Posted by Marcia Oddi on September 26, 2009 09:59 AM
Posted to Indiana Government