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Wednesday, July 08, 2009

Ind. Gov't. - More on "State puts IBM on notice over welfare deal"

Updating this ILB entry from yesterday, Will higgins' report today in the Indianapolis Star has this startling information:

In January 2007, before the IBM system was rolled out, the portion of food-stamp cases that were mishandled was 4.38 percent. By January 2009, that number had shot up to 18.2 percent.
More from the story:
Nearly two years into the privatization of Indiana's welfare system, state officials are considering scrapping it amid widespread concerns that include the mishandling of nearly one in five food-stamp cases.

State welfare officials acknowledge that in about three-quarters of those cases, eligible Hoosiers are being denied aid they should be receiving.

"It's possible we'd have to cancel the contract," said Anne Murphy, secretary of the Indiana Family and Social Services Administration, referring to a $1.16 billion deal with IBM. She said the company will have until September to make improvements. * * *

Despite critics' objections that welfare requires a personal touch, the gradual rollout began county by county in October 2007. After a chorus of complaints from social workers, aid recipients and lawmakers, the rollout was halted abruptly in March, with 33 counties to go, Marion County among them.

Murphy says the new [$1.16 billion] system is no worse than the previous state-run system but that the economic recession -- unemployment is 10.6 percent -- combined with last year's extensive flooding has swollen the welfare rolls and bogged down the system. In April, when FSSA last compiled its food-stamp numbers, 695,000 Hoosiers received stamps, compared with 584,000 in April 2007. * * *

Last month, IBM implemented changes that involved hiring more than 300 additional staffers, some retraining of existing staff and adding new computers and more scanners. Murphy said it's too early to appraise the new strategy.

Critics are skeptical. "I've had tons and tons of complaints," said Sen. Vaneta Becker, R-Evansville, one of two Republicans who pushed for legislative oversight of the FSSA before the agency went further with its privatization. "I've heard of two people who died after losing Medicaid."

Becker characterized the changes IBM is implementing as "fine, but they won't solve the problem."

Ken Kusmer of the AP has a lengthy story today. Some quotes:
Canceling the contract would set back efforts in some states to outsource and automate welfare systems and move away from cost-intensive, hands-on work by government caseworkers. The industry and some members of Congress have closely watched the Indiana experiment after a similar one in Texas ended with a canceled contract with Accenture in 2007.

Murphy’s comments are the first by a senior member of Gov. Mitch Daniels’ administration that IBM and its partners, most prominently Dallas-based Affiliated Computer Services Inc., could lose the contract.

IBM and its partners have taken over welfare intake in 59 of Indiana’s 92 counties and handle about one-third of the state’s 1.2 million-person caseload. Most area counties, including Allen, switched to the new system in May 2008.

Murphy said a 12-week review of their efforts resulted in more than 200 recommended changes to improve training, reduce turnover, add 350 more employees and introduce more technology to speed up approval of welfare applications and reduce error rates.

IBM spokesman Jim Larkin said the company “is working closely with the state to implement that plan in an aggressive manner.”

Clients, their advocates and lawmakers have harshly criticized the IBM team for lost documents, slow approvals and severed eligibility for Medicaid, food stamps and other benefits. Federal food stamp officials have also requested improvements.

In April, using FSSA data, The Journal Gazette documented problems with the agency’s food stamp program. During the final quarter of 2008, the FSSA failed to process almost a third of food stamp applications within its goal of two months, leaving thousands of Hoosiers waiting for help.

Nearly 78 percent of applications in Allen County were processed within two months from April to June 2008, but that rate fell to 66 percent during the last three months of the year, according to the state data.

In Noble County, during the last three months of 2008, almost half of food stamp applications took longer than 60 days to process.

The agency blamed its slow processing times on growing pains, an increased volume of applications and possible client errors.

Four members of the Indiana House briefed by Murphy said she told them the corrective plan was an intermediate step before the state resorted to canceling the deal.

“She did say that they would initiate breach of contract, and she said IBM was aware of this,” said Rep. Suzanne Crouch of Evansville, a Republican like Daniels.* * *

Daniels has said repeatedly that he inherited one of the worst welfare systems in the nation and has made the IBM deal one of the hallmark initiatives of his 4 1/2 -year-old administration. * * *

Daniels had signed the contract in December 2006, saying it would give Indiana taxpayers “a billion dollars of savings” and serve welfare recipients better. “No decision we’ve made is more clearly in the public interest,” he said at the time.

But critics wary of seeing problems similar to those in Texas already were condemning the contract. In Washington, Sen. Tom Harkin of Iowa and Rep. Henry Waxman of California, both Democrats, raised concerns in letters to then-U.S. Agriculture Secretary Mike Johanns, whose agency oversees the food stamp program.

Also criticized were Affiliated Computer Services’ ties to Murphy’s predecessor, Mitch Roob, a former executive at the Texas-based technology vendor. Under the Indiana contract, FSSA outsourced 1,500 of its employees in 2007 to ACS to operate call centers and perform other tasks.

Roob left FSSA in January to take over Indiana’s economic development efforts, and Murphy, his deputy secretary and chief of staff, rose to FSSA’s top job. After reviewing data on the welfare project, she decided to halt its rollout and go to the governor.

Posted by Marcia Oddi on July 8, 2009 08:13 AM
Posted to Indiana Government