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Outdated Technology, Application Backlogs Hinder FamilyCare Enrollment

Delayed computer system adds to problems in getting New Jersey residents enrolled in Medicaid program

New Jersey Human Services Commissioner Jennifer Velez.
Credit: NJTV
New Jersey Human Services Commissioner Jennifer Velez

All they wanted to do was sign up for health insurance newly available to them under the federal Affordable Care Act. When the Obamacare website,, had a glitch-plagued debut, they were advised to apply for New Jersey FamilyCare – the state’s primary Medicaid program – through county welfare offices.

But the county welfare offices were not equipped to handle the flood of applications, requiring the use of paper applications – due, in part, to delays in installing a long-promised computer system.

And that’s left thousands of low-income New Jersey residents still waiting for coverage, as state welfare offices and a private contractor try to clear a backlog of paper applications for Medicaid coverage.

The good news is that from January through April, the state added 142,023 adults to FamilyCare, mostly residents who were newly eligible due to the Affordable Care Act. That increased to 414,229 the total number of New Jersey adults covered by FamilyCare, including 176,000 parents and guardians who were previously eligible for the program but who now have all of their costs covered by the federal government as part of the ACA’s Medicaid expansion.

The ACA expanded Medicaid – and therefore FamilyCare – to childless adults with incomes of less than 138 percent of the federal poverty line, which is currently $15,856 for a single person and $21,204 for a couple.

Previously, parents and guardians with incomes in this range were eligible for FamilyCare, but the state had to share the costs with the federal government. Under the ACA, the federal government bears all of the costs for this group through 2016, with the state share eventually rising to 10 percent of the costs by 2020.

While the number of residents who have gained insurance due to the Medicaid expansion is “one to celebrate,” according to state Human Services Commissioner Jennifer Velez, she added: “The enrollment process itself has been a struggle.”

State officials don’t have an estimate of the total backlog, but Assemblyman Joseph Cryan (D-Union) noted that county offices and Xerox, the state contractor for Medicaid applications, still must process thousands of applications.

“There’s a number of folks that don’t have coverage because of the system, and that sounds crazy – it really does,” said Cryan (D-Union).

While the early months of enrollment were marred by problems with, but the pace of enrollment has picked up, with 92,000 through April and 24,000 new enrollments in the first week of May, according to Valerie Harr, the state’s Medicaid director.

While the open enrollment period for the federal health insurance marketplace ended on March 31, residents can enroll in FamilyCare at any time.

However, county welfare offices continue to be overwhelmed by FamilyCare applications, including many paper applications filled out due to the outdated computer system.

The backlogs vary widely by county, said Harr, who added that she has asked all 21 county welfare offices to report to her weekly on the size of their backlogs. Last week, only eight complied with the request, she said.

A long-awaited new state computer system, known as the Consolidated Assistance Support System (CASS), was intended to relieve the problem by speeding up the application process. But the system, planned since 2006, has been mired in delays.

A series of corporate acquisitions has delayed CASS’s launch. The state is now in talks with contractor Hewlett-Packard about the system, which will serve all of the state’s welfare programs. Hewlett-Packard has submitted a plan to complete the project but hasn’t provided a schedule that’s been accepted by the state, Velez said. The state has refused to pay the company, which Velez described as “a stick, but it’s not a solution” to motivate the company to complete CASS.

“The state’s been reliant upon a very old system,” Velez said, adding that the technology is 30 years old. She said state officials have been concerned about an antiquated mainframe computer that is expected to handle the volume of applications.

“It’s extraordinary to me and I’m sure to you as well that after seven and a half years, we can’t get this system up and running, that our partners keep on changing, that it’s not getting done and, ultimately, the people who are suffering are the people we seek to serve,” said Assemblyman Gary S. Schaer (D-Bergen and Passaic) at an Assembly Budget Committee hearing yesterday on the Department of Human Services budget. Schaer is the committee chairman.

Velez emphasized that the county backlogs shouldn’t cost residents access to healthcare, because their eligibility is backdated to the date they applied, not when their application is processed.

For example, eligible residents who applied in March but who hasn’t heard back from their county office yet is still entitled to receive healthcare services before they receive their FamilyCare cards. She said the state has encouraged healthcare providers to accept letters that residents receive when they apply as temporary evidence of eligibility.

County welfare offices have been slowed down by the requirement that their staffs annually review whether people currently enrolled in FamilyCare are still eligible. This should no longer be a problem, since the state successfully appealed to the federal Centers for Medicare & Medicaid Services to allow counties to delay the “redeterminations” until they’ve cleared the application backlog.

Cryan expressed concern about this delay, saying, “that sounds like the setup for a big backlog” in the future.

Along with the county offices, the state has a contract with Xerox to process applications. That company has its own 7,000-application backlog, which Harr estimated it would work through within six weeks.

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