Indiana welfare officials considering canceling the state’s privately run welfare system have no backup plan in place, and critics say it will be hard to undo the privatization of 1,500 state case workers more than two years ago.
Anne Murphy, secretary of the Family and Social Services Administration, confirmed recently that the system led by IBM Corp. and Dallas-based Affiliated Computer Services Inc. has so many problems that Indiana could cancel the 10-year, $1.16 billion contract. She asked IBM to submit a “corrective action plan” as part of a process that could result in cancellation of the contract if changes aren’t made by the end of September.
However, Murphy said that her agency doesn’t have a backup plan for running the welfare system that provides benefits to 1.2 million Indiana residents. Top state officials have started discussing what to do if the vendors’ performance doesn’t improve, but no plan has been made.
“We don’t have a Plan B yet,” Murphy said. “We’re hopeful that they’re going to make the changes and that there will be improvements.”
IBM spokesman Jim Larkin said the company is working with the state to make improvements quickly.
Welfare 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 also have requested improvements.
Carmel attorney Scott Severns represented a 33-year-old single mother with one child in a telephone hearing on food stamp eligibility last week. The woman had submitted details on her car registration and loan to ACS months before, but the hearing officer denied her claim because she could not provide updated information, Severns said. He also is appealing the denial of the woman’s Medicaid application.
“What those people are up against is just horrendous,” said Severns, who represents about 150 clients on Medicaid and food stamps.
Severns questioned the state’s ability to cancel the IBM contract if the vendors don’t improve. Case workers began leaving as early as 2005 because they thought Gov. Mitch Daniels would outsource welfare intake, and FSSA turned over 1,500 remaining case workers to ACS in March 2007.
“We’ve kind of got a too-big-to-fail situation now,” Severns said. “It’s unthinkable to pull the plug because those guys run the system now. It’s not as if the state can march in and say, ‘All you guys work for us now.’ There will have to be a workable system built as this one is dismantled. It really is a tragic error.”
IBM and ACS have introduced call centers, document processing and other automation in 59 of Indiana’s 92 counties, but that doesn’t make up for the loss of state case workers in every county, he said.
Rep. Gail Riecken (D-Evansville) one of four Indiana House members recently briefed by Murphy on the situation, gave the AP an e-mail message from a hospital case manager frustrated with the slow pace of Medicaid approvals.
“I have applied for babies only to inquire 30 days later and be told that they have not even started processing the application yet. Meanwhile, these moms are not getting the prenatal care they need and babies are not getting well baby care,” the message said.
Representatives from hospitals, United Way agencies and other care providers in Evansville and the surrounding county meet regularly to share information on their problems with the welfare system. A June 9 report sent to Riecken contained 12 complaints, including the following:
– “Information is being submitted 5-6 times before it is acknowledged as being ‘received’ by the state”;
– “State Call Center staff will hang up on providers when asked too many questions or when they get frustrated with the providers”;
– “Nursing homes are not accepting patients who are ‘Medicaid pending’ because they can no longer rely on Medicaid coverage being approved retroactively and/or timely.”
Daniels has repeatedly described the state welfare system as one of the worst in the country when he took office, but state Sen. Vaneta Becker of Evansville, a fellow Republican, challenged that. Managers in her home county solved constituents’ problems within 24 hours, she said, even though a technology shortage meant case workers had to share phones and computers.
“It wasn’t the worst system in the country,” Becker said. “We had a good system in place.”
She too said a big problem is too few case workers, but unlike Severns, thought it might be time to start over.
“I’m just not sure without rescinding the contract, things are ever going to get fixed,” Becker said. “I just don’t have much faith in the process they’ve set up in the first place.”