The Texas Integrated Eligibility Redesign System (TIERS)

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Summary
Summary: 

In January 2006, the state of Texas hired a private consortium headed by Accenture LLP to develop, operate, and staff Texas's eligibility and enrollment system for Medicaid, Children's Health Insurance Program (CHIP), Food Stamps, and Temporary Assistance for Needy Families (TANF).  Almost immediately, problems occurred such as high call center wait times, technical issues, insufficiently trained contractor staff, delays in application processing, and improper benefit denials.  Many families eligible for public benefits failed to receive the assistance they needed when they needed it.  In March 2007, the state cancelled the contract.  

 

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History
History: 

In 2003, the Texas Legislature, faced with a $16 billion budget shortfall, passed House Bill 2292.  This bill consolidated twelve health and human services agencies into five agencies and directed the agencies to explore the use of privately-run call centers to enroll low-income Texans in public benefit programs.  The cost benefit analysis produced in 2004 made the business case for moving eligibility functions for TANF, food stamps, and Medicaid to private call centers.  The analysis projected savings of $389 million in state and federal funds over five years.

The state chose the Texas Access Alliance, headed by Accenture LLP, to develop, operate, and staff Texas's eligibility and enrollment system for the critical health and social services.  The $899 million, 5-year contract included the development and maintenance of the technological system that would serve as the backbone of the new system, as well as staffing the call centers. 

In January 2006, the new eligibility system was launched in Travis and Hays counties.  Almost immediately, problems arose such as high call center wait times, technical issues, insufficiently trained contractor staff, delays in application processing, and improper benefit denials.  Significant declines in CHIP and Medicaid enrollment were also documented.  Many eligible families were mistakenly denied the public benefits and failed to receive the assistance they needed when they needed it. 

These problems persisted and became so devastating that in March 2007 the Texas Health and Human Services Commission (HHSC) cancelled the contract with Accenture. 

Since the cancellation of the contract, HHSC has taken steps to rebuild its agency workforce, which was severely cut prior to the contract period.  Certain functions were transferred back to the agency, but Texas remains committed to the general idea of outsourcing its eligibility system.  Maximus, a former member of the Texas Access Alliance, took over many of the contracted functions, including staffing the call centers.  HHSC forged ahead with its plans by expanding the system to additional counties beyond the original pilot area. 

Although there have been some improvements since the original contract cancellation, problems persist with application processing timeliness, improper benefit denials and other issues.

 

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Key Issues
Key Issues: 

A significant decline in service quality resulted from the privatization.  Many of the contractor staff were inadequately trained, resulting in numerous errors. In one instance, the contractor staff gave aid applicants the wrong fax number, and more than 100 applications were faxed to a warehouse in Seattle. 

The new system also had to contend with staffing shortages, since the turnover rate significantly increased. In Spring 2006, more than 50% of calls from clients were abandoned before contractor staff answered the call, and the average waiting time was over 20 minutes.  These call statistics eventually improved, but many clients continued to voice frustrations.  The TIERS system experienced serious technical issues, including problems with the data entry component of the system.  These technical problems, combined with staffing shortages and training problems led to delays in application processing and improper benefit denials. 

These problems took a heavy toll on many low-income Texan families.  In March 2007, a 14-year old Houston boy died of kidney cancer after his health insurance was withheld in error by the contractor.  He was unable to receive a special type of treatment for his tumors during the four months in which he had no health insurance.  Other children around the state were also improperly denied health coverage and were unable to receive care for illnesses such as asthma and other chronic disease.  Similarly, eligible families across the state were unable to buy groceries when their food stamp benefits were denied in error, causing many food pantries to report a significant increase in families seeking assistance.   

After the contract was canceled, HHSC returned certain eligibility screening functions to the agency.  However, the agency no longer had the experienced case workers it employed before the privatization, and has struggled to adequately rebuild its workforce for at least two years.  Efforts to attract and retain qualified staff have proved very difficult.

 

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Advocacy
Advocacy: 

The Center for Public Policy Priorities, an advocacy and research organization in Texas, monitored the privatization roll-out and kept lawmakers and the public informed about the status of the system and related problems