NJ Spotlight

A botched computer system implementation has led to persistent delays in getting food and healthcare to low-income residents and may cost the state millions of dollars and access to future federal funding.

The problem was raised at a legislative hearing yesterday, after a state auditor issued a report criticizing the contract. The commissioner in charge of the program refused to testify, citing ongoing negotiations.

“These are families that are going needlessly hungry or being denied essential healthcare,” said Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective.

The Department of Human Services’ handling of the $118 million contract for the Consolidated Assistance Support System (CASS) has also drawn scrutiny from State Auditor Stephen M. Eells, who has questioned why officials didn’t act sooner on the contract, or write into it provisions that would allow the state to recoup damages from the failure to complete the contracted work.

CASS, when first envisioned in 2006, was seen 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 in 2009 with Hewlett-Packard to build the system, but repeated delays led the state to recently terminate its contract. Now, the state is in talks with Hewlett-Packard over the contract termination as it tries to salvage the work that’s already been done.

The cost of the project ballooned over time from $83 million to $118.3 million, not including an additional $109 million in estimated government costs. While the federal government paid for most of the costs, it wasn’t clear yesterday what the state’s potential losses on the contract are.

A quality-assurance contract responsible for monitoring Hewlett-Packard’s progress found that the company left key management positions vacant and changed project managers three times since 2010.

“They consistently had red flags as to certain areas where the deliverables weren’t being delivered on-time,” said Helen Lesenskyj-Dublas, a manager in Eells’ office. The computer system was based on technology that was originally used in Europe and was already old in 2009. Its performance was complicated by the rollout of the Affordable Care Act, which expanded eligibility for Medicaid.

Work never completed

While Hewlett-Packard completed five of the six project phases, it never completed its work, and it’s unclear whether or how the state will salvage the work that’s been done.

Eells said at an Assembly Human Services Committee hearing on the issues that he’s seen no evidence that Department of Human Services officials brought concerns over the contract to the Department of Treasury, which is responsible for ensuring that problems with contracts are resolved.

“They could have made complaints as soon as this QA (quality-assurance contractor) was letting them know that the appropriate resources were not being provided by HP,” Eells said, adding that there were “plenty of avenues they could have taken. (Only) they have the answer to why they didn’t choose to use this information.”

Eells also noted that the agreement apparently didn’t include any recourse for the state to seek damages resulting from a failure to complete the contract -- provisions that are included in other contracts.

“We also have a significant concern the state of New Jersey and or the federal government has invested anywhere from $100 to $200 million in a project that we’re not sure is going to have an end result,” Eells said, adding that he would like to see the state find a way to complete CASS. The state auditor is the only constitutionally established position in the state that’s appointed by the Legislature and does not report directly to the governor.

Human Services Commissioner Jennifer Velez declined to speak at the hearing, citing the ongoing talks with Hewlett-Packard.

Federal funding at stake

Recouping losses and getting the system up and running are not the only issues the state faces due to the contract. It’s also under threat of losing federal funding if it doesn’t improve the speed with which it process SNAP applications. The state bettered federal requirements for timeliness in a recent week, according to Velez, in a letter to the committee.

Velez also said that county welfare offices could improve the backlogs by using “best practices,” including shifting from a system in which individual case managers handle specific applications to one in which the same applications are processed by different county workers and no longer have assigned case managers. She noted that the state has made funding and training available for counties to improve their performance.

“While a new or improved information technology system can improve operations, the issues that have led to New Jersey’s timeliness problems are linked more directly with inadequate staffing, outdated business operations and reluctance to embrace best practices” by counties, Velez wrote.

Whether counties or the state should handle human services programs has been a long-running issue. Counties have guarded their responsibility (and the jobs that come with it), but healthcare analysts have said the system would be more efficient if the state were able to standardize procedures and staffing levels.

Committee chairwoman Assemblywoman Valerie Vainieri Huttle (D-Bergen) said legislators deserve answers – not a refusal to appear by the commissioner. “I find it frustrating that time and time again we get letters of excuses,” for not appearing, she said.

While Velez refused to appear before the committee, a stream of advocates for the poor did testify.

Questions and criticisms

Castro noted that the state is at risk of losing a 75-percent funding match for maintaining the computer system.

He emphasized that the state leads the nation in the percentage of residents who are long-term unemployed. This is adding to the stress on SNAP and Medicaid applications.

Castro also questioned why the state hasn’t used some of the millions of dollars it saved by expanding Medicaid eligibility to provide additional staff members to support application processing.

Diane Riley, advocacy director of the Hillside-based Community FoodBank of New Jersey, raised questions about the rates cited by Velez. She said some applicants are having their applications closed for questionable reasons, such as failing to participate in an interview that they didn’t know existed. The problem, Riley admitted, has improved of late.

Communication Workers of America New Jersey legislative and political director Seth Hahn noted that the state has one of the lowest levels in the country for the portion of those eligible for SNAP who are receiving benefits -- with an estimated 140,000 eligible residents not receiving food aid.

Hahn also rejected Velez’s statement that counties aren’t embracing best practices. He said that shifting from having individual caseworkers handle applications depends on having a new computer system like CASS.

“The losers here are the parents who can’t feed their children,” Hahn said, pointing to Connecticut and Kentucky as states that have successfully implemented new computer application systems.

The negative fallout from application delays is falling upon hospitals and nursing homes, which take financial hits when residents who can’t pay bills also aren’t in Medicaid.

Capital Health Chief Financial Officer Shane Fleming said hospitals refer unpaid bills to collection agencies, further harming the residents.

Jay Solomon, who as CentraState vice president of senior services oversees nursing homes in Monmouth County, said Monmouth has three vacancies in its office processing Medicaid applications and that nursing home officials have been told that priority is being given to emergency applications. He also raised concerns about how applications are being closed too quickly, leading to people applying multiple times.

“If we had an automated system, maybe these situations could be avoided,” he said.