Sen. Breaux weighs in on the progress of her bills and the reestablishment of FSSA

State Senator Jean Breaux (D-Indianapolis) discusses a host of issues including the reestablishment of FSSA.

Budget Briefs: FSSA Budget Breakdown

Indiana’s Family and Social Services Administration (FSSA) is responsible for providing administrative services and funding to meet the needs of citizens that require long term, developmental or rehabilitative care.

As the preferences of those requiring care shift, as federal reform efforts take shape and as the administration continues to focus their budgetary priority on fewer programs, FSSA’s ability to provide appropriate care has become more difficult.

FSSA is broken down into five divisions:

The Division of Family Resources (DFR) is responsible for determining eligibility for Medicaid and managing Indiana’s food stamps (SNAP) and Temporary Assistance for Needy Families (TANF) programs. DFR also inspects and licenses Indiana’s child care facilities and oversees Headstart, a federal program that provides early education to low-income children.

In the FY12-13 biennium, DFR offset a 77 percent decline in dedicated funds with a 22 and 10 percent increase in general and federal funds respectively as compared to the previous biennium. The division’s total combined FY12-13 appropriation stood at $1.3 billion.

FSSA Hybrid Update

On August 23, 2011, the Family and Social Services Agency (FSSA) gave an update to the Joint Commission on Medicaid Oversight on the “hybrid” system for social services eligibility determination.  View FSSA’s presentation here.

Progress of the “Hybrid” conversion

Five of the seven FSSA regions have transitioned to the hybrid system.  Click on the map to view in greater detail.

The two remaining regions are:

• Tippecanoe and Wayne counties, which are scheduled for roll out in late 2011
• Marion County, which is scheduled for roll out in February 2012

May 2010: More on the history of the hybrid roll out >>

Dec. 2009: FSSA presentation on privatization costs and the hybrid plan>>

System Performance Update

FSSA reported that overall performance of application processing has improved with the transition to the hybrid process.  When IBM was processing applications, FSSA reports that 77% were processed timely, whereas now 88% are processed timely.  The number of days FSSA has to process an application varies by benefit applied for.

In addition, Indiana has moved from number 53 to number 10 in the nation for reducing the number of cases inaccurately determined to be eligible.  Indiana has moved from 45 in the nation to number 12 for reducing the number of cases inaccurately determined to be ineligible.

Background

In December 2006, Indiana signed a 10-year contract with IBM to modernize the State’s eligibility process for Temporary Assistance to Needy Families (TANF), the Supplemental Nutrition and Assistance Program (SNAP), and Medicaid.  The project transferred a majority of State employees to private contractors and modified the application process to move away from an in-person caseworker system to an online application, centralized call centers, and faxing or mailing required documents.

After the failure of the “modernization” project, the state ultimately canceled the contract with IBM and is now in a court battle with the company.

Budget Brief: FSSA, IDOC and the Indiana Supreme Court

On Monday, March 28, the Senate Appropriations Committee took testimony from the Family and Social Services Administration (FSSA), the Indiana Department of Corrections (IDOC), and Indiana Supreme Court Chief Justice Shepard.

FSSA Go to Summary
IDOC Go to Summary
Indiana Supreme Court Go to Summary
Family and Social Services Administration (FSSA):

Non Medicaid portion of the budget:

• 9.4M reduction in appropriation request for CHOICE
• Implementation of transition from Care Select to Chronic Disease Management will help FSSA reduce costs by over $11M.
• Reductions of almost $18M in administrative costs due to attrition, efficiencies and contract deductions.
• Over $11M in savings from maximizing federal dollars.
• Continuation of RCAP moratorium for a savings of $3M.
• Reduction of approximately $7M in DD state line funding as a result of transitioning individuals to waiver funded services.
• Elimination of DDRS Crisis and Outreach contracts that will save approximately $6M
• $15M in annualized savings due to the SOF Transition plan.

House version of FSSA’s budget:

Rep. Espich’s version of the budget included amendments that will “decrease the savings” that FSSA proposed they could make with their recommended policy changes. See below for a list of the changes that Espich made, and their “additional costs” to the state.

Changes to Non Medicaid portion of the budget:

• Increase CHOICE appropriation by $4.7 and $9.4 in FY 12 and 13.
• Modified language around Evansville facilities limiting FSSA’s ability to gain efficiencies and savings (FSSA will lose savings of $.7 and $.7 in  FY 12 and 13)

Changes made to Medicaid portion of the budget:

• Reinstated optional services to Medicaid, which will cost $12.9 and $14.0M in FY 12-13
• Language on managing Mental Health Drugs was changed to reduce the Potential savings by at least 50%, “costing” ($3.6M and $3.6M in FY 12-13

o   Exempts psychiatrists from having to get prior authorization, grandfathers patients currently receiving Medicaid from having to adhere to the preferred drug list.

• Change the language regarding the Nursing Facility Quality Assessment Fee (QAF) costing an additional $20.8M and $17.2M in FY 12-13.
• “Increase in Medicaid appropriation to cover funds previously augmented” ($11.5 & $11.5 in FY 12 and 13.

Indiana Department of Corrections (IDOC)-

• Indiana’s prison population has increased by 41% since 2000. The inmate population growth is surpassing DOC’s housing capacity. Indian’s prisons are currently operating at 99.8% capacity. They have done all they can do to create space and reorganize the existing system to accommodate population growth. The only other options are changing legislation and/or funding the expansion of facilities. DOC urges the legislature to consider altering sentence requirements and funding community based corrections.
• 78 counties are participating in community corrections programs. These programs are proving to be effective options for managing population growth and limiting costs. See page 18 of presentation to see breakdown of the types of community correction programs (work release, home detention, day reporting, etc).

Four major changes in DOC budget request:

• Contractual increase for food service contract. Increase requested due to increased population and rising food costs.
• Contractual increase for medical contract (will result in savings for state)- increase request due to increased population, rising medical costs, and expanded scope of service. The current contract pay private vendors on a per offender/ per day rate. Sherriff’s have a “legislative deal” that states that they will only pay private vendors the Medicare rate + 4% for services. By instituting the Medicare +4 contract, the state will save $4,655,000/year.
• Contractual increase for New Castle Correctional Facility- They have a contract with a private vendor that requires DOC to pay a daily cost for the supervision and housing of offenders in this facility. Due to increasing offender populations, DOC needs to operate this facility at maximum capacity throughout the biennium (thus they have to increase their budget request).
• Active electronic tracking of sexually violent predators- A new statute, effective July 2010, requires DOC to place active electronic tracking devices on all offenders defined as “sexually violent predators.” The Criminal Law and Sentencing Policy Study Committee recommended that DOC amend this law so that they would only have to track offenders deemed to be at high risk of committing a new sexual offense. Implementing the tracking system without amendment will cost $11.3M over the biennium. Amending the law will cost $2.6M over the biennium.

Indiana Supreme Court-

Committee will consider four items:

• Increased funding to update the appellate case management system for electronic filing and service of documents.
• Continue to allow the salaries of judges to be considered alongside all other state employee raises.
• Increase funding for the Public defenders commission as more counties choose to participate in program
• Allow fees to be increased from $7-10 for JTAC

Budget Brief: FSSA, Health and Inspector General

Hearing Date: December 1, 2010

Testifying Agencies:

FSSA / Healthy Indiana Plan

• Presentation
• Transmittal Letter
• Performance Measures
• Operating Budget Request
• DMHA Capital Budget Request
• EPCC Capital Budget Request
• ESH Capital Budget Request
• MSH Capital Budget Request
• LSH Capital Budget Request
• RSH Capital Budget Request
• LCSH Capital Budget Request

Inspector General

• Transmittal Letter
• Organization Chart
• Performance Measures
• Operating Budget Request

Tobacco Master Settlement Fund

• Presentation
• Operating Budget Request

Indiana Comprehensive Health Insurance Association (ICHIA)

• Presentation
• Operating Budget Request

Presentation Highlights:

* NOTE: The “base rate” is the annual appropriation recommended by the State Budget Agency. This year, the base rate reflects cuts made under the governor’s 15% budget reduction target, not the amount last appropriated by the General Assembly.

Family & Social Services Administration (FSSA) – FSSA is a health care and social service funding agency. Ninety-four percent (94%) of the agency’s total budget is paid to thousands of service providers ranging from major medical centers to a physical therapist working with a child or adult with a developmental disability. The FSSA budget of $7 billion is funded by $2.3 billion in state general fund dollars, and $4.7 billion in Federal grants and programs. The five care divisions in FSSA administer services to approximately one million Hoosiers each year. See below for highlights from the budget presentations of various divisions within the FSSA administration.

Missed opportunity: H.I.R.E. program

In the latest update from FSSA, Indiana missed out on the opportunity to put as many as many as 10,000 Hoosiers to work at half the cost to employers between April and September 2010. The H.I.R.E. program approved in March never moved forward because the agency spent April through June of this year holding “several discussions regarding implementation.”

Meanwhile, Illinois moved forward with the Put Illinois to Work program and helped 26,000 otherwise unemployed workers bring home paychecks during that period. Read an earlier post on programs in Illinois and other states>>

The federal funds – and the state’s opportunity – expired on October 1.

The update was made available at the request of the State Budget Committee. Read earlier entry from that meeting>>

Update from Wednesday’s budget meeting: Hybrid, Health care, and H.I.R.E

The State budget panel met Wednesday to review numerous fiscal issues facing the state. The panel, comprised of members of the General Assembly and the State Budget Office, heard reports on the impact of national health care reform on Indiana, the  Family and Social Services Administration (FSSA) hybrid program, and the Helping Indiana Restart Employment (H.I.R.E) Program.

Impact of the Congressional Affordable Health care for America Act in Indiana:

Milliman, FSSA‘s contracted Medicaid actuary, testified before the Budget Committee about the potential impact of the Patient Protection and Affordable Health care for America Act on Indiana’s state budget. Milliman provided a worst-case scenario, projecting the maximum cost to the state to be $3.6 billion  from State Fiscal Year (SFY) 2014 through SFY 2020. Milliman’s estimate assumes 100% participation – in other words, that every eligible Hoosier, even those already insured, would switch to Medicaid.

The panel did not address the benefits Hoosiers will receive from the new legislation.  Benefits include an expansion of health care access for 700,000 people in Indiana and new guidelines for the regulation of insurance companies.

Budget Committee member State Senator John Broden (D-South Bend) pointed out that the main focus of the new reform should not solely be based on the cost of the program, but also the opportunity for hundreds of thousands of Hoosiers.  Broden stated:

We’re potentially expanding coverage to Hoosiers at 10% of the cost.  If anyone thinks that we would have more people insured through the private system had Congress not acted, they’re living in a dream world.

Listen to Senator Broden’s full statement from committee:

Download: Broden.BudgetCommHealthCare.051210.MP3

Milliman also indicated that the state would realize cost savings of about $246 million in the areas of children’s health care, breast and cervical cancer programs, and health care for pregnant women.

FSSA Modernization Review:

FSSA Secretary Anne Murphy addressed the Budget Committee regarding the expansion of the hybrid pilot program to the Vigo Region in June.  The hybrid is a new version of the state’s system for public assistance eligibility determination and was introduced as a fix to the state’s failed privatized call center system that took away face-to-face interaction with caseworkers.  The pilot program originated in the Vanderburgh Region, which includes Daviess, Dubois, Gibson, Knox, Perry, Pike, Posey, Spencer, Vanderburgh, and Warrick counties and cost the state $10 million from December 2009 through March 2010.

Yesterday, the administration announced its goal to expand to the Vigo Region in June, encompassing Clay, Fountain, Greene, Monroe, Owen, Parke, Putnam, Sullivan, Vermillion, Vigo, and Warren counties.  According to FSSA, the roll-out to the Vigo Region will likely cost the state an additional $10 million. Secretary Murphy indicated that similar costs would be incurred each time a new region switches to the hybrid system.

In August or September of 2010, FSSA hopes to expand the hybrid program into the Clark and Allen Regions, which would include Clark, Crawford, Dearborn, Floyd, Harrison, Jackson, Jefferson, Jennings, Lawrence, Martin, Ohio, Orange, Ripley, Scott, Switzerland, Washington, Adams, Allen, Dekalb, Huntington,
Jay, Kosciusko, Noble, Steuben, Wells, and Whitley counties.

In a response to a question posed by a Budget Committee member at the end of the testimony, Secretary Murphy stated that FSSA will not be paying any further claims from IBM.  Since the termination of the state’s 10-year contract with the company, IBM has submitted claims totaling $125 million dollars.  The state and IBM filed suit against each other today. In it’s filing, IBM seeks $50 million from the state, however it is unclear how much has been already paid in the lawsuit.

Read more in the news:

Indy Star

Louisville Courrier-Journal

Fort Wayne Journal-Gazette

H.I.R.E Program:

The panel also reviewed the Helping Indiana Restart Employment (H.I.R.E) Program which aims to provide emergency funding to subsidize private and public employers by encouraging the creation of new jobs for unemployed Hoosiers. These emergency funds are available through the TANF Emergency Fund established under the American Recovery and Reinvestment Act of 2009. The program was authorized by the General Assembly in Senate Enrolled Act (SEA) 23 and uses one-time federal stimulus funds that are still available to the state and would otherwise be left unused. The program, based on the Mississippi STEPs program, has been implemented in 20 other states and could potentially put 10,000 Hoosiers back to work. A speedy implementation of the program is important because federal funds are set to expire on September 30.

There is a bill moving through Congress that would extend the program for an additional year.

On May 20^th, legislators and staff will meet to discuss the program and plan for its implementation. A representative from the National Conference of State Legislators (NCSL) will attend the meeting to provide technical assistance and explain how other states have benefited from the program.

See a report from the Center on Budget and Policy Priorities for more examples from other states.

Also on the agenda:

1. Arts Commission Grant Process
2. Medical School Expansion
3. State Vehicle Report
4. Gary Trauma Hospital
5. HIRE Program Status
6. FSSA Eligibility Modernization Review
7. National Health Care – Indiana Impact
8. Agency Projects
9. University Projects

IBM claims state owes $125M for failed privatization contract

The Fort Wayne Journal Gazette reported on Sunday that IBM Corp. is seeking $125 M from Indiana in the ongoing “disengagement” process after the failed FSSA privatization contact was cancelled. Gov. Daniels ended the contract last fall after more than two years of poor performance and complaints from Hoosiers.

IBM claims Indiana owes it more than $125 million for ending a controversial welfare contract, including $9.3 million for telephones, computer equipment and furniture.

The invoices reflect “disengagement services” – nearly half a million dollars in December and more than $680,000 in January, the most recent invoice available. The largest invoice, dated Oct. 23, bills Indiana more than $43 million for an annual “deferred fee,” part of the original cost of the contract, which was spread out over 10 years.

The documents also show the state fined IBM $115,000 for underperformance during five months last year. That’s about 1 percent of the $11.5 million in fixed fees the company was receiving each month to administer welfare benefits in 59 of the state’s 92 counties.

In less than three years, IBM had been paid about a quarter of the contract’s original $1.16 billion. The Daniels administration has said the state still saved money on the IBM system and will save money with a new, revised plan, based on projections of what each would cost. But the administration has said it can’t provide a cost-per-client comparison between the old system and the IBM-led system because there are too many variables.

So the question remains — when will Hoosiers see a full accounting of the IBM contract and how much it cost the state?

Wish you were here: Put Illinois to Work program

Illinois is moving forward with the “Put Illinois to Work” program, an initiative that leverages federal dollars to fill as many as 15,000 full-time positions at Illinois companies with unemployed workers.

According to an announcement by the Illinois Senate Democrats,

Employers will receive extra employees at no cost to them: the program is funded by state and federal stimulus dollars, and Heartland Human Care Services Inc. will handle payroll and guarantees no wage expenses for employers.

A similar program in Indiana was authorized by the General Assembly this year, but FSSA has yet to act on implementing the program. Under the Helping Indiana Restart Employment (H.I.R.E) program, which was included in SEA 23, nearly 10,000 unemployed Hoosiers could be rehired.

The program calls for tapping $100 million available in federal stimulus funds that otherwise will be left on the table. The Indiana program was modeled after the Mississippi STEPs program, implemented by Republican Governor Haley Barbour.

Why the rush? 
The federal funding – available through the TANF Emergency Fund established under the American Recovery and Reinvestment Act of 2009 – is set to expire on September 30.  By that time many Hoosiers will have exhausted their unemployment benefits. Indiana’s unemployment rate has hovered above the national average and is now at 9.9%.

How other states are using the funds
Some 42 states have had their applications for TANF Emergency Funds approved and additional states have applications in the works. As of April 1, 26 states had been authorized to use TANF Emergency Funds to establish new or expand subsidized employment programs: Alabama, California, Delaware, D.C., Florida, Georgia, Hawaii, Illinois, Michigan, Minnesota, Mississippi, Montana, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, and Washington.

These states have plans in place to provide subsidized jobs to about 160,000 individuals by the end of September.

Here are a few examples of how other states are leveraging the federal funds:

• Tennessee, for example, has focused job creation efforts on areas of very high unemployment. The creation of subsidized jobs in rural Perry County helped to lower its unemployment rate from 27.3 percent in January 2009 to 18.6 percent in August 2009.
• New York has mounted an initiative to create “green jobs,” expand health care outreach, and subsidize private-sector employers who hire new permanent employees.
• California is creating subsidized employment programs through an initiative in 43 of its 52 counties that aims to eventually place about 20,000 individuals in subsidized jobs. As of January 2010, there were about 15,000 active placements in counties throughout the state.

See a report from the Center on Budget and Policy Priorities for more examples from other states.

Simpson: State money should be spent on services, not health care challenge

Senate Democrat Leader Vi Simpson (D-Ellettsville) released the following statement in response to the Indiana Attorney General’s announcement that the state will be joining a legal challenge to the recently passed national health care law.

“This comes at a time when the state is in the position of making some very serious budget cuts for public schools and for our universities. Even yesterday there was an announcement made that we are going to cut further services to foster children with special needs. There is great irony during this time in our state’s history that we are going to be wasting taxpayer dollars on a lawsuit that most legal authorities believe is pretty hopeless and some have even called it frivolous. We need that money to provide services to people and to educate our children.

“If the Attorney General wants to do something important for the people of Indiana, it seems like he ought to be spending his time and his resources on collecting the $200 million that we are owed from IBM and the contract that they had with the state to provide FSSA services. They failed in providing those services and the contract is null and void, therefore they should repay all of the money that has been paid to them. The Attorney General should be pursuing that, which would be a real asset for the taxpayers of the state instead of wasting time and resources on this.

“I would ask the Attorney General, which parts of the health care plan do you really want to do away with? Is it the expansion of healthcare access for 700,000 people in Indiana or is it the regulation of insurance companies that you object to?”

Listen to the full audio of Senator Simpson’s statement:

Listen to an audio clip of her statement regarding the state’s fiscal condition:

Listen to an audio clip of her statement regarding the IBM contract: