December 26, 2006
State finally cuts bait on Accenture

One more story from last week to catch me up on current events: The state's Health and Human Resources Commission has finally realized what everyone else knew to be true months ago and cut bait on Accenture.

Texas is drastically cutting a private contract for social services because of backlogs and errors in processing applications, state officials said Thursday.

The $899 million contract with Accenture to operate call centers to determine benefits eligibility will be reduced by $356 million and ended in 2008, two years early, said Health and Human Services Commissioner Albert Hawkins.

Under the restructured contract, the Bermuda-based company will be largely relegated to data entry, leaving judgments about whether Texans qualify for food stamps, Medicaid and other welfare programs to state workers.

"We didn't draw the line between vendor work and state work in the right place," Hawkins said. "As we rebalance the roles between the state and the vendor, we will be drawing that line in a different place."

For example, if a client applying for benefits fails to list an asset such as a car, and a check of public data indicates a car is registered to the family, the situation will be investigated by state employees, not Accenture workers.

Additionally, a planned expansion of Accenture-run call centers from two Central Texas counties to other areas of the state will not occur, Hawkins said.


The announcement was received as good news for state workers and groups that work with low-income Texans. Hawkins said 900 temporary positions in eligibility offices will be converted to full-time to stabilize the state work force.

"We're glad to see that HHSC is acknowledging that its call-center experiment didn't work," said Mike Gross, Texas State Employees Union vice president.

Gross said the commission should restore staffing levels at its local benefits offices to levels that existed before the contract was signed in June 2005.


Scott McCown, executive director of the Center for Public Policy Priorities, an Austin group that has advocated a more cautious approach to privatization, said Thursday's announcement served as a reminder that not all duties performed by state workers can be transferred to the private sector.

"I think the Legislature significantly underestimated the value of what the public sector did. There's a tremendous amount of expertise and skill in the public sector that the private sector could not replicate," he said.

There's not really much to add to this, as I've been saying it all along. I'll simply point you to this Chron editorial, Father John, and HHSC Employee for more.

On a related note, Eye on Williamson flags an Express News story about a different aspect of THHSC that's broken and in need of a complete do-over.

Since mid-2005, investigators at the state Health and Human Services Commission have been unable to determine the level of fraud in a pilot program that officials have touted as the future of entitlements in Texas.

The findings of a state audit released last month potentially put in jeopardy millions of dollars the federal government sends to Texas as its part of public assistance programs in Hays and Travis counties.

Those counties were chosen by HHSC to test a complex system for processing the applications of needy people before rolling it out statewide.

The state auditor's report comes almost a year after problems at the commission emerged in its move to privatize social services, an effort Gov. Rick Perry has endorsed.

The problems included the inability of a troubled computer system, called TIERS, to function properly.

The federal government also has raised concerns about a nearly $900 million contract the state agency signed with a Bermuda-based firm to manage TIERS, which stands for the Texas Integrated Eligibility Redesign System.

In a report that pulls few punches, the audit found TIERS is a faulty computer system and that incomplete or unavailable data had squelched the state's ability to monitor the level of recipient fraud in state programs that disburse millions of dollars in federal benefits.

The report said information "that is critical to pursuing investigations of fraud and overpayment is not readily accessible to investigators through TIERS, and the data that is accessible is not sufficient to legally pursue criminal proceedings for fraud."

We first heard about this last month. I'm still waiting to hear an official reaction from the state's leadership. At the very least, there should be some action on this front in the Lege. Stay tuned.

Posted by Charles Kuffner on December 26, 2006 to Budget ballyhoo | TrackBack