News Room

February 28, 2007

"Because of incompetence 200,000 children lost CHIP coverage. Here in Texas, HHSC is the functional equivalent of FEMA."

Written by Senator Eliot Shapleigh,


AUSTIN –  Today, Senator Shapleigh questioned Texas Health and Human Services Commissioner Albert Hawkins on his mismanagement of the Accenture contract to operate the Texas Children's Health Insurance Program (CHIP).  Since 2002, 200,000 children have lost CHIP coverage because of a series of errors, including software malfunctions, rule changes, and, in one case, applications misdirected to a warehouse in Seattle.

Hawkins' appearance before the Senate Nominations Committee follows his re-nomination by Governor Rick Perry on February 7 to continue leading the state's health and human services agency.  Hawkins was first appointed in January 2003.

"Because of incompetence 200,000 children lost CHIP coverage.  Here in Texas, HHSC is the functional equivalent of FEMA," said Senator Shapleigh.

Hawkins also answered questions on Governor Rick Perry's executive order mandating human papillomavirus (HPV) vaccinations for girls.  Hawkins' re-nomination was left pending by the committee.

The following op-ed by Senator Shapleigh is available for publication:

“Heck of a Job”
Senator Eliot Shapleigh

In the devastation following Hurricane Katrina, George Bush landed in New Orleans—five long days after the storm hit—and declared to his FEMA director, Michael Brown, "Brownie, you're doing a heck of a job."

Of course, Brown had botched the job such that the whole world soon saw on CNN—stranded victims on rooftops for days, dead bodies floating in the water, and chaos at the Louisiana Superdome. Bush's comment now stands as shorthand for rank incompetence by a government agency.

Taking a good look at Texas health care, we might easily say the same—"you're doing a heck of a job."

Let's take a look at the facts. Texas now ranks first in the U.S. in the uninsured, with 5.6 million Texans lacking health coverage.  Texas also ranks first in children without health insurance.  In other health-related areas, Texas ranks fifth for its rate of cervical cancer, third for its percentage of population malnourished, and 42nd for WIC benefits to women and children.

These numbers are no accident.  Texas has worked to get where we are now.

In 2003, lawmakers were asked to solve the state's revenue problems as they debated how to budget a $10 billion shortfall. Texas' leadership responded by cutting even further critical education, health services and other programs that were already severely under-funded.  In the CHIP program alone, 200,000 Texas children were cut when the Texas legislature, under HB 2292, turned social services in Texas from brick-and-mortar commitment to people into a call center-based virtual reality committed to profit.

For the love of money, Texas' lifeline to working-class families became a telephone line.

In a June 18, 2003 memo, HHSC outlined the intent of HB 2292.  Its purpose, according to the memo, "[r]estricts eligibility for families," "changes [the] term of coverage…from 12 months to 6 months," "establishes a 90-day waiting period," and "reduces CHIP outreach efforts to [the] federal minimum"—a deliberate formula for rationing health care through frustration, and worse, incompetence.

Over the next four years, Texas' health agency proceeded to privatize under the largest state contract ever awarded outside of TXDOT.  Despite clear warnings from many lawmakers, Albert Hawkins, HHSC Executive Commissioner, negotiated and signed an $898,939,876 contract with Accenture—formerly Andersen Consulting—on June 29, 2005.

On November 29, 2005, our office requested a Comptroller report to assess damage under the contract and provide options.  Our office wrote to Hawkins to warn him specifically that:

A State Auditor's report issued in September stated that, as of August 2005, the Commission had failed to achieve any of the $21.7 million in savings promised by outsourcing payroll and human resources jobs to a private company.

Our office received numerous complaints regarding Access HR, the human resources system operated by Convergys.  These complaints include poor customer service, accessibility problems, payroll problems, difficulty applying for positions, and productivity problems.

In 2003, 4023 eligibility workers interviewed an averaged of 142,000 Food Stamp applicants per month.  The Accenture call-center plan reduces the number of eligibility workers to around 1,700.  How is it possible for less than half the number of eligibility workers to interview and certify the same number of Food Stamp applicants?

We were concerned that the elderly and those with limited English or reading proficiency will be negatively impacted by the Accenture call center plan.  Has the Commission planned to ensure that these Texans are still able to access essential social services?

It is estimated that, due to the changes, over 3,500 jobs will be lost, resulting in over $68,000,000 of lost payroll spent in local communities.  How will the jobs proposed to be created by the call centers compare to those lost throughout the state?

Damaging reports surfaced shortly thereafter.  The Houston Chronicle reported in March 2006 that computer incompatibility problems with HHSC caused Accenture's clients to fall through the cracks.  This critical breakdown so early in the process prompted Sen. Bob Deuell (R-Greenville) to ask Hawkins, "I've got concerns about [Accenture] doing the job.  Do you share those concerns?" '

Hawkins dismissed the concerns, even as HHSC's Bob Arbuckle warned staff in a memo, "We cannot continue to bounce clients around.  If [Accenture] inappropriately bounces someone back to us, we need to step in and help client."

In the same month, the Dallas Morning News and Lubbock Avalanche-Journal  reported, "Hundreds of poor Texas families are struggling with children's health care because of errors and confusion about new enrollment policies for CHIP…"  Amber Nicole "Niki" Grayson, 16, was among the children who lost coverage, although her mother, a single parent and child care worker, met deadlines and provided proof of her $17,000 a year income.

A spokesman for HHSC blamed the mother.

In Austin, three-year-old Ryla Woodward spent a weekend in a hospital when she fell ill with mononucleosis.  Days following, she lost her CHIP coverage, placing follow-up exams and other check-ups out of her family's financial reach.  In Ryla's case, HHSC confirmed that she and her sister were mistakenly caught up in a broken eligibility-screening system operated by Accenture, according to the Austin American-Statesman

By June 2006,  new problems began to arise.  Reports emerged in statewide newspapers that Accenture had misprinted a fax number on its applications, causing CHIP applicants to send their documents to warehouse in Seattle instead of HHSC in Austin.  The error resulted in hundreds of children without health insurance, many of them unaware of the fact until they sought care.

In a report dated October 25, 2006, the Comptroller issued a startling report.  Since Accenture began operations on December 1, 2005, CHIP enrollment had plunged by 8.5 percent or 27,567 children through August 2006.  She also found that Medicaid enrollment had dropped 2.9 percent or 53,937 children in the same timeframe.  Most troubling, the letter stated, "Evidence shows that some children were inaccurately denied benefits but were in fact eligible.  In addition, I found that rather than saving money in this biennium, this contract will cost the state almost $100 million more than budgeted while fewer children and families receive the needed benefits."

The Comptroller concluded, "this project has failed the state and the citizens it was designed to serve.  The contract with Accenture must be ended."

Despite clear representations on savings in call centers, they did not work. As a result of incompetence in operating the contract, over 200,000 Texas children have been dropped from the program. Of the original $898,939,876 in Accenture's contract, $358,256,100 now has been cut. Now, HHSC wants to hire 900 state employees back from the ones they just fired to do the work that they used to do.

Government is about people—not contractors, greed, privatization or profits. Texans want government to do a few things, and do them well. Despite the record, on February 7, Rick Perry nominated Albert Hawkins to serve four more years as head of HHSC.

After this "heck of a job," what do you think?

- END -

E. Anthony Martinez
Communications Director

Office of Senator Eliot Shapleigh

Texas State Capitol – E1.610

Austin, Texas 78711

512.463.0129 (phone)

512.463.0218 (fax)


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