Texas Comptroller calls for immediate end to social services contract citing mismanagement

Texas Comptroller Carole Keeton Strayhorn in a letter to lawmakers on Wednesday said a five-year contract with an Accenture LLP group that administers enrollment for Medicaid, the state's SCHIP program and other social services "must be ended" because of mismanagement, the Houston Chronicle reports.

According to a five-month investigation by Strayhorn, since Accenture took over eligibility services in December, enrollment in the SCHIP program by August had declined by 8.5%, or by 27,567 children.

Computer problems and lost or backlogged applications at SCHIP program eligibility-screening call centers run by the company led to children being wrongly denied coverage, according to the report (Elliott, Houston Chronicle, 10/26).

The report also found that the $800 million contract -- which involves updating Texas' system for enrolling people in public assistance programs to allow them to apply online or by phone or fax -- is $100 million over budget (MacLaggan, Austin American-Statesman, 10/26).

In addition, Strayhorn's report found that the contract provides "perverse incentives to process applications slowly, inefficiently and incorrectly" (Houston Chronicle, 10/26).

Strayhorn, who also is an independent candidate for governor, criticized the state Health and Human Services Commission for not effectively managing the company's contract and recommended that the state Legislature enact emergency legislation to end the agency's management of the project (Austin American-Statesman, 10/26).

According to Strayhorn's recommendation, lawmakers should transfer authority of the project to a team led by a special master who reports directly to the governor and legislative leaders, the Chronicle reports (Houston Chronicle, 10/26).

HHSC spokesperson Stephanie Goodman said Strayhorn's report "is based on old information, is inaccurate and misleading and ignores the terms of our contract" (Austin American-Statesman, 10/26).

HHSC officials say training for call center workers has improved and families can now provide missing information on applications by phone instead of by mail or fax.

According to Goodman, HHSC's legal staff is preparing a recommendation for state HHS Commissioner Albert Hawkins that could include fines against Accenture for not meeting some terms of the contract (Houston Chronicle, 10/26).

The letter is available online.