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Sunday, July 12, 2009

Ind. Gov't. - "Medicaid problems swell in new system"

Angela Mapes Turner of the Fort Wayne Journal Gazette has this lengthy and detailed report today. Some quotes:

Indiana's nearly 2-year-old experiment with a privatized welfare system appears to be failing.

The backlog of pending Medicaid applications has ballooned in counties where welfare is handled by private contractors. From May 2008 - after the most recent wave of counties joined the new system - to December 2008, pending cases increased 86 percent. In counties working under the old system, the backlog increased only 16 percent, according to a Journal Gazette analysis of state data.

And the contractors, led by IBM Corp., missed deadlines for processing Medicaid applications at twice the rate of counties that haven't joined the new system.

In December, nearly 60 percent of applications processed under the new system were overdue. * * *

The problems with Medicaid mirror issues the contractors have in processing food stamp requests. Last year, Indiana ranked among the five worst states in improper denials or terminations of food stamp benefits. In April, The Journal Gazette revealed that during the final quarter of 2008, the FSSA failed to process almost a third of food stamp applications within its goal of two months, the slowest processing time since the state privatized some counties. * * *

No new counties have been brought into the system since May 2008 because of problems so critical the state's Family and Social Services Administration announced Tuesday that IBM Corp. must show how it's going to improve. If the state isn't satisfied with IBM's plan to fix he system, it could end its 10-year, $1.16 billion contract. * * *

Evansville lawmakers joined forces during the regular session to call for changes to the welfare system, and their bipartisan pleas were echoed by social workers and hospital administrators who say call center workers hang up when they get frustrated and provide inaccurate information to clients and health care providers.

When Vanderburgh County was part of the first rollout in October 2007, FSSA data show 219 cases were pending beyond allowable deadlines. By the end of 2008, the total had swelled sevenfold, to more than 1,500.

The daily complaints have turned lawmakers into caseworkers and have many people questioning why a functioning system in many parts of the state had to be overhauled.

"Our area wasn't experiencing huge problems," [Rep. Gail Riecken, D-Evansville] said. "To make a drastic change like this, it was extremely upsetting to folks."

Complaints have been so common that a measure calling for an independent audit of the welfare privatization was one of only three bills filed during the special legislative session last month. Riecken backed off House Bill 1003 in deference to the special session's explicit purpose - passing the state budget. But she continues to push for hearings around the state to expose shortcomings in the system, which she says too often trips up on the first crucial step of submitting an application.

"We have to continue working on this problem until it is solved," Riecken said.

Also today, the Journal Gazette has a long editorial, titled "The welfare privatization debacle." It begins:
Gov. Mitch Daniels likes to say that he inherited “the worst welfare system in the nation.” But two extensive reviews of data by The Journal Gazette suggest it has grown worse under his watch.

The latest shows staggering increases in Medicaid application backlogs in the counties where the Indiana Family and Social Services Administration turned eligibility processing over to IBM Corp. Angela Mapes Turner’s report on Page 1A finds that counties under the new system had tardiness rates more than double that of counties operating under the system the governor criticized.

Turner’s April investigation found that almost a third of the state’s food stamp applications were not processed within two months, missing federally required deadlines for timeliness and leaving struggling families to seek help elsewhere.

After The Journal Gazette requested Medicaid timeliness figures, FSSA Secretary Anne Murphy announced that the state might have to cancel the $1.16 billion contract with IBM and its subsidiary, Affiliated Computer Services. They have been asked to submit a “corrective action plan” to address problems. If there are no improvements by the end of September, the state could take steps to cancel the 10-year contract, she told The Associated Press last week.

The move is welcome but long overdue. Social service advocates warned state officials before the contract was awarded in 2006 that it was being pushed through too quickly, with no opportunity for public input and no cost-benefit analysis to determine whether it would produce savings or improvements. Their concerns were based on a botched welfare privatization deal in Texas.

Then-FSSA Secretary Mitch Roob pushed ahead. The “eligibility modernization project” contract was signed and rolled out in October 2007 in a 12-county area. By the following spring, hundreds of people were showing up at meetings to complain about problems with the system, which replaced most state caseworkers with a Web site and call center. The situation grew worse when northeast and southwest Indiana counties went online in the spring of 2008.

Neat the end of today's editorial is this quote:
Enough time has passed in testing this business-model approach to administering vital public services. The results are not encouraging by any corporate measure and uncompassionate by any humane measure.

Posted by Marcia Oddi on July 12, 2009 09:05 AM
Posted to Indiana Government