Tuesday, April 17, 2007

Texas Observer: Trail of TIERS

Trail of TIERS

Albert Hawkins is pushing another fouled-up, expensive idea
by Dave Mann

Perhaps the biggest boondoggle in Texas government at the moment involves a computer program at the state Health and Human Services Commission that has consumed more than $415 million and seven years of effort. It still doesn’t work.

Yet HHSC Executive Commissioner Albert Hawkins continues to ignore forceful warnings about the system’s flaws, and is pushing the much ballyhooed software into wider use at his agency.

An Observer review of internal HHSC documents shows that Hawkins has been told repeatedly by federal officials and his own auditors over the past two years that the agency’s new system simply wasn’t functioning. In one instance, the agency even misled federal officials about the software’s progress, according to internal agency documents.

The software is called the Texas Integrated Eligibility Redesign System, or TIERS for short (pronounced, appropriately enough, “tears”). It is supposed to bring efficiency to state benefit programs and make it easier for needy Texans to get their food stamps, Medicaid and other benefits.

So far, it’s done the opposite. In pilot programs, the software has mysteriously swallowed data and left applicants wondering if they will ever receive their benefits. At other times, it has paid out too much money, but how much is impossible to tell because the software doesn’t produce the data auditors need to check for mistakes or fraud.

Flaws in the TIERS system contributed to last year’s failure of the agency’s grand experiment to let private call centers run by the consulting firm Accenture handle applications for state benefits [see “What Hawkins Knew,” April 6, 2007]. The call center plan has been suspended indefinitely, and HHSC canceled its contract with Accenture last month.

But TIERS somehow soldiers on. The state and federal tax dollars it has already burned could have provided health coverage for every kid in the Children’s Health Insurance Program in 2007.

HHSC officials contend they have fixed many of the problems, and Hawkins is moving forward with plans to slowly expand TIERS across Texas. “TIERS is a successful system today,” says HHSC spokesperson Stephanie Goodman. “It provides benefits to hundreds of thousands of clients every month.”

But federal officials and some state lawmakers remain deeply suspicious, and in recent weeks have tried to halt TIERS expansion. It’s not just the well-being of needy Texans at stake. If Hawkins sticks with the software and the project continues to fail, the state risks incurring federal sanctions and wasting even more taxpayer money.

Hawkins didn’t create the TIERS mess, but he has perpetuated it. HHSC set out to build its new computer system in 2000—three years before Hawkins took over the agency. It wanted to replace an aging system— antiquated, but it worked well enough—with gadget-heavy, Web-based software. The new system was supposed to be easy to use and handle every task a state worker could desire, from processing Medicaid applications to calculating how much food stamp money to pay out. HHSC hired Deloitte Consulting LLP to build the software. The project was botched from the beginning.

After three years, the state and its contractors launched a trial run of TIERS in two Central Texas counties, and they have yet to move much beyond the pilot program, which handles about 250,000 clients a month, according to HHSC. Goodman says HHSC successfully expanded TIERS to Williamson County last fall without hearing any complaints. But state workers in the pilot area have complained for years that the software takes far too long to process applications.

What’s given HHSC the greatest heartache is the system’s inability to maintain case histories—for example, how much a Medicaid provider was paid three years ago, or whether a food stamp recipient mistakenly received too much money, and if so, how much.

The lack of reliable case histories prevents auditors at the HHSC Office of Inspector General from investigating cases of Medicaid fraud and recovering overpayments. HHSC auditors haven’t pursued a single fraud investigation among the hundreds of thousands of cases handled by TIERS in 28 months. Similarly, they halted all inquiries into cases using TIERS in April 2005, according to a report last fall by the Texas State Auditor’s office.

Internal HHSC documents obtained by the Observer reveal the extent of the problem. For example, the HHSC Inspector General’s office believes, based on sample data, that TIERS is paying too much taxpayer money in the food stamp program. But without case histories, the auditors have no way to determine how much money mistakenly went out, and can’t recoup the overpayments. Goodman, the agency spokesperson, says the data are retrievable from TIERS, but the system has trouble putting the information into a format auditors can use.

The federal government requires the state to track and recoup overpayments in the food stamp program, and to conduct fraud investigations. HHSC’s inability to perform either task in the two counties using TIERS is not only wasting taxpayer money intended for needy Texans, but also violating federal law.

For three years, the feds and HHSC’s own auditors have nagged the agency to correct the software failings. In August 2005, HHSC auditors recommended three steps that might limit the continued waste of taxpayer money, including requiring a supervisor to review and approve any food stamp payments of more than $125. HHSC officials later assured federal officials the safeguards were in place as early as June 2005. That appears to have been untrue. HHSC auditors have found “no confirmation” of safeguards such as supervisor approval “anywhere in TIERS or otherwise,” according to an auditor’s memo last fall. HHSC’s Goodman says those safeguards were automated in late 2006 and the amount of overpayments issued by TIERS fell substantially.

Hawkins was well aware of the problems. He met personally with staff from the HHSC Inspector General's office on April 27, 2005, and again on September 29, 2005. At both meetings, auditors warned Hawkins that the agency’s auditors couldn’t track overpayments or investigate fraud in the TIERS data, according to a memo written by Garbarino last fall. Hawkins’ office didn’t respond to three interview requests for this story.

Hawkins moved ahead with an expansion of TIERS before the flaws were corrected. He decided to link the launch of the Accenture call center network in 2006 with an expansion of TIERS. Hawkins planned to roll out the call centers and TIERS statewide and simultaneously.

While the call center flameout drew widespread coverage, the failings of the state’s new software have garnered little publicity. In early 2007, HHSC quietly moved ahead with its planned expansion of TIERS.

After HHSC notified federal officials of its plans, the feds reprimanded the agency in a March 23, 2007, letter denying HHSC approval to expand its problematic software. Of course, HHSC has ignored the feds before. As the Observer reported on April 6, Hawkins twice pushed the Accenture plan forward without federal approval. The feds issued a stern warning to HHSC not to try that stunt again. “[The Food and Nutrition Service] will not participate in further funding of this project if the State elects to move forward with an expansion of TIERS without FNS’ prior approval,” the letter read. HHSC had hoped to expand TIERS to seven more Central Texas counties by the end of April. Those plans are in doubt.

You couldn’t blame the feds if they decide to cut off funding for TIERS. The state has already burned through about $231 million in federal money developing the software. (The state tab is approaching $200 million.)

Hawkins told a House subcommittee on April 4 that his agency had, remarkably, solved most of the problems with the software, including the case history problem. He said agency leaders met with federal officials on March 29 to discuss TIERS and that the feds were pleased with HHSC’s progress. “We were able to present to [federal officials] documents showing that changes have been made,” HHSC Deputy Commissioner Anne Heiligenstein told lawmakers at the hearing. “Their reaction was very positive.”

Despite that happy talk, sources at the Capitol say federal officials are suspicious of HHSC’s claims, though they took state officials at their word. Asked if HHSC’s progress had satisfied the federal government, Jean Daniel, a spokeswoman with the federal Food and Nutrition Service, said, “That’s under review. [HHSC] has provided answers to the questions and discussion points. Those are under review.” Federal officials will visit Texas in April to test just how fixed the computer system really is.

Meanwhile, time may be running out for TIERS. Several state lawmakers are losing patience with the repeated failures. Sen. Bob Deuell, a Greenville Republican, offered a rider to the state budget to allow HHSC to update its old computer system as a temporary fix until TIERS or another system can function successfully. Other lawmakers want to scrap the software and make HHSC start over with a system that won’t waste so much money.