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Stopgap System Helps Social Services Speed Medicaid Application Process

End-to-end solution still not in sight, and some state lawmakers are not in the mood to be patient

Credit: Martin Griff
Assemblyman Gary S. Schaer (D-Bergen and Passaic).

One year after state auditors angrily denounced New Jersey’s stalled attempt to speed up the processing of Medicaid and food stamp applications, Social Services officials are declaring the problem temporarily solved.

Yet some applicants and their legislators say that’s not what they’re seeing.

“The backlog remains and is only being exacerbated as New Jersey’s poverty levels rise,” said Gary Schaer (D-Passaic), who chairs the Assembly Budget Committee, which has held hearings on the subject. “I cannot tell you what it is like to walk the street of any town in New Jersey and see people who are hungry … in the year 2016.”

It’s been a longstanding and seemingly intractable problem.

In December 2014, the General Assembly Human Services Committee heard testimony from the state’s auditing department about how a project to replace the 1980s-era computers used to review health insurance and other benefit applications had failed, leaving tens of thousands of the state’s poorest residents without FamilyCare (Medicaid) or money to buy groceries, sometimes for months. The problem got so bad that the U.S. Department of Agriculture threatened to withhold funds unless the state picked up the pace.

Here's the backstory: In 2007, the DHS contracted with a private vendor to replace its outdated mainframe computer with a more modern system called the Consolidated Assistance Support System (CASS). The goal was to run all of the state’s social services with just one computer program, eliminating the slow, cumbersome approach of using multiple programs.

More specifically, the use of multiple computer programs meant that someone who wanted to know what benefits they could receive might spend all day going to different county sub-departments to meet with one representative per program.

But in 2008 the recession struck and the number of applications for all sorts of benefits skyrocketed, including for SNAP and FamilyCare, which requires recipients to reapply every year to report any changes to their income.

Meanwhile, federal, state, and county budgets shrunk, which led to widespread layoffs in the departments that handle these programs. Then in 2013, the ACA expanded Medicaid, particularly to childless adults who made up to 138 percent of the federal poverty line.

CASS, which initially was supposed to cost $83 million, was going to be compatible with the county and federal systems. Then, when the approvals from arrived digitally in Trenton, state officials discovered that their systems were incompatible.

News reports from 2014 showed pictures of floors in county hallways lined with stacks of applications that needed to be processed by hand and quoted county officials complaining that their employees had stacks under their desks to get to “someday.” New Jersey ranked dead last in the time it took to deliver benefits.

Meanwhile, hospitals, nursing homes and doctors that accepted Medicaid weren’t getting paid by the state or the patients whose coverage had lapsed. Eventually, uninsured patients’ accounts got sent to collection agencies, making their problems worse.

Things only got worse. The company that Social Services originally contracted with was bought out several times and eventually landed under Hewlett-Packard’s corporate umbrella. The cost of the contract ballooned to $118 million, and in 2014, the Christie administration fired HP. The federal government lost $56 million on the failed project; the state lost $10 million.

Former commissioner Jennifer Velez blamed the problems on the counties’ failure to follow best practices and a lack of project management at HP. That was before she refused to testify at the 2014 hearing, when the state auditor and members of the committee angrily wondered why no one from the department ever notified anyone about the troubles.

“The amount of money expended on a system that proved an ultimate failure without due questioning year after year!” said Schaer. “The issue of CASS was brought up every year during budget hearings and commissioner after commissioner told us things were moving along until we discovered the whole system was not moving along at all. The system was inoperable.”

Brossoie, who now reports to Acting Commissioner Elizabeth Connolly, who took over this month, denies this.

“The department kept stakeholders and others very informed throughout the process,” she emailed.

Either way, after HP left, the department hired KPMG to study the failures and recommend what to do next -- at a cost of $850,000. Connelly’s staff is reviewing the recommendations, which were delivered in September. Among them: Implement incremental strategies and establish clear leadership.

In the meantime, the agency is trying to resolve the issues with a series of stop-gap measures, including diverting almost all of the applications to Xerox Corp. instead of to the counties, giving the counties money to hire more staff, and buying a computer program dubbed MAGI that at least lets the counties use one program for all social benefits.

But the situation is a bit more byzantine than that description suggests.

Residents can apply for FamilyCare online through the state or the feds, or they can apply in person at a county office. (They have to apply in person at a county office for other services.) Applications that come from or go to Xerox. Some of that responsibility will revert to the counties once DHS figures out how to upgrade its system.

Craig Lucas, who oversees Medicaid for Camden County, said, “We had struggled … But the number of applications we have to process has come down pretty dramatically.”

How dramatically?

Lucas says Camden County processed 14,273 online Medicaid applications in 2014 (which doesn’t count the number of applicants who fill out the paperwork in person at a county office). In 2015, the number dropped to 4,306. It should be noted that because applicants faced so many delays and so much confusion when they tried to get answers, many applied multiple times, sometimes through the federal website, sometimes through the state’s, and sometimes in person. Lucas says his staff discovered 4,703 duplicates in 2014 and 971 last year. Now, thanks to Xerox, his office is only processing applications from pregnant women, and almost all of those applications get processed within the required 30-day window.

Brossoie says this is pretty much the case across all of the counties. “There are no NJ FamilyCare applications pending with the counties or at Xerox,” she wrote. “SNAP timeliness is at about 91 percent, up from 72 percent in the last year.”

Shawn Sheekey, Camden County social services director, calls himself satisfied that the state has since done what it can to rectify the problem, at least in the short term. They’ll keep using Xerox for the foreseeable future while they figure out how/when to implement computer upgrades that’ll render this unnecessary.

“The state promised to give enhanced funding to the counties to deal with this and they delivered,” he said. “We’re in the process of hiring human services specialists.”

But neither he nor Brossoie can explain what happened to the Camden County approvals that vanished somewhere between the federal ACA website and the workers in Trenton who mail out verifications. Xerox referred questions back to Brossoie, and several customer service agents answering local FamilyCare hot lines told battle-scarred residents to, “Just go ahead and reapply through the state’s website. It’ll be faster.”

Schaer says the state consistently fails to provide needed services to its poorest residents, though in this case, the state did do one thing right: it finally acknowledged the problem.

“We’re at a better place because we recognized the problem and have finally admitted what the problem is,” he said. “But just how fast can they make this a workable system?”

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