Christie Budget Doesn’t Fund Permanent Fix for Social-Services Computers

Andrew Kitchenman | April 21, 2015 | Health Care, Social
It’s still unclear when state will have system to efficiently handle applications for food stamps and Medicaid

Gov. Chris Christie’s budget proposal doesn’t include money for a permanent fix to the computer problems that have bedeviled applicants for social services for years.

Legislators pushed for a solution after the state cancelled its contract for a new computer system. Contractor Hewlett-Packard repeatedly failed to deliver on the Consolidated Assistance Support System (CASS), which cost the state $15 million and the federal government tens of millions more.

State officials came up with a “transition plan,” using another contractor, Xerox, to handle human-services applications. In addition, the state hired auditing company KMPG for $850,000 to analyze what can be salvaged from CASS and to make recommendations for a future system. Xerox is budgeted to be paid $7 million.

CASS was first envisioned in 2006 as a way to connect the state with county welfare offices, allowing applicant information to be shared instantaneously across different programs, including the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, and Medicaid, the primary health program for low-income residents.

The state signed a contract with Hewlett-Packard to build the system in 2009, but cancelled it after five years of delays.

State Auditor Stephen M. Eels has questioned why state officials didn’t act sooner to cancel the contract.

State officials said yesterday that they paid for the stages of the contract that Hewlett-Packard completed, and stopped paying when the company stopped delivering. They haven’t explained why it took five years for that to happen, although they have said that a series of corporate acquisitions contributed to delays.

Acting Human Services Commissioner Elizabeth Connolly said the state is looking to see what other states are doing with their social-services computer systems, and whether the state can “piggy-back” onto another state’s contract.

“I think we’ll have a better plan after we see what KPMG has,” she said during an Assembly Budget Committee hearing yesterday on her agency’s proposed budget.

Unlike many states that have more centralized systems, New Jersey relies on county welfare agencies to process social-services applications. The ability to process applications varies widely from county to county, a problem that CASS was intended to help fix.

The issue became more crucial in January 2014, when Medicaid eligibility was expanded under the federal Affordable Care Act. This led to a surge in applications to NJ FamilyCare – the state’s primary Medicaid coverage program – and large backlogs of applications in some counties. FamilyCare has added 420,000 people since the expansion.

In addition to problems with the computer system, another factor contributing to delays is that counties don’t have enough workers processing applications.

[related]The ACA-fueled surge in applications actually offered county governments an opportunity to try to their handling of applications — at the time, counties were paid a certain amount for each application they received and could have spent that money to hire more workers.

But counties didn’t hire additional workers, noted state Medicaid director Valerie Harr.

The state changed that payment system in January, hoping to motivate counties to speed up their processing of social-services application. Instead of being paid for each application they receive, the counties are now paid based on the number actually completed.

State officials are transferringthe remaining county backlogs of 9,000 to 12,000 applications to Xerox. They hope to eliminate the backlog by the end of May.

“We are very concerned about the backlog, because we want people to have their Medicaid – the goal with the expansion is to get Medicaid to the people who need it,” Connolly said.

Committee Chairman Assemblyman Gary S. Schaer (D-Bergen and Passaic) questioned why state officials can’t provide a timeline for resolving problems with the computer system, beyond receiving the KPMG report in mid-May.

He and Assemblyman Raj Mukherji (D-Hudson) also expressed concerns over the fact that counties have been inconsistent in reporting backlog data, and that the state doesn’t require them to submit the data.

Processing applications “is being done without a system; we don’t know when that system is going to be up and running; our counties are not cooperating with us in terms of providing data. Why am I getting a queasy feeling, commissioner?” Schaer asked Connolly.

Connolly responded that the state does have a system to process applications, even if it doesn’t provide the coordination that CASS was supposed to provide. That system is based on a patchwork of different computer systems that have handled applications for different social services, including the Family Assistance Management Information System (FAMIS), which has been used for decades and doesn’t allow the state to closely track applications as they are processed by counties.

Assemblyman John Burzichelli (D-Cumberland, Gloucester and Salem) noted that state officials promised last year that CASS would be ready this year.

“Are there bad guys here? Did somebody do something wrong?” he said, questioning whether it will be possible to fix the problem after seven years of failing to fix it.

Connolly said the ACA made integrating social-service computer systems more complicated.

“There will be solutions that come forward,” Connolly said. “I don’t think it’s going to not happen – we’re working in the same way as other states to integrate very complex systems and merge them together.”

Raymond J. Castro, senior policy analyst for the nonprofit New Jersey Policy Perspective, said it’s striking that the state hasn’t included money for a permanent replacement for the CASS project in the 2015-2016 budget He said that the state could have speeded up the process of hiring a new contractor, particularly if the state based its system on one used in another state.

Castro said “it’s going to require major reform” to improve the process for determining whether residents are eligible for social-service benefits, although a new computer system would help.

In addition to the FamilyCare application backlog, the state has ranked next-to-last in the country in the efficient handling of food-stamp applications. It faces federal penalties for the delays, but state officials said improvements have put it on track to avoid the penalties.