AUSTIN –  Today, May 1, Senator Eliot Shapleigh (D-El Paso) issued the following statement on the nomination of Albert Hawkins for Executive Commissioner of the Texas Health and Human Services Commission:

Let me first say this vote is not about Albert. All of us like Albert.

But it is about children. And fundamentally, it is about our responsibility for our children. 

At his first inauguration in 2001, President George W. Bush said, "America, at its best, is a place where personal responsibility is valued and expected."

I agree.

But, with personal responsibility comes accountability.  And with accountability comes consequences.

Today, we in the Texas Senate have the Constitutional duty to hold Albert Hawkins accountable for his record at Health and Human Services and to provide consequences for his tenure.

Government by and for the people means effective government.  People expect value for tax dollars and responsibility in public servants.  When billions in state contracts fail, when hundreds of millions in tax dollars are wasted, and when lives are affected by failure, the people whom we all represent demand we deal with that failure. 

Albert Hawkins operates a state agency with an annual operating budget of $25 billion and 46,000 state employees working in 1,000 locations around the state.

Except for TEA, no agency touches as many Texans' lives.  Without a doubt, no agency makes as many decisions that literally mean the difference between life and death.

Unfortunately, the record of Albert Hawkins at HHSC is a record that has no defense. Saying as you do, Senator Jackson, that he has done a heck of a job does not fix the facts.

Under him, Health and Human Services has become the functional equivalent of FEMA.

ACCENTURE/CHIP

Let’s review the Hawkins record—first on Accenture.

In 2003, we were asked to solve the state's revenue problems, with a $10 billion shortfall.   We responded by cutting critical education, health services and other programs that were already severely under-funded. 

Part of that response was H.B. 2292, a bill to privatize critical social services, including CHIP and Medicaid.

In a June 18, 2003 memo, HHSC outlined clearly the intent of H.B. 2292.  Its purpose "[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, HHSC proceeded to privatize under the largest state contract ever awarded outside of TXDOT.  Despite clear warnings from many lawmakers, Albert Hawkins, negotiated and signed a $899 million contract with Accenture on June 29, 2005. 

On November 29, 2005, exactly five months after the Accenture contract was signed,  I wrote to Albert Hawkins to express my serious concerns over the contract. 

In the letter I addressed to Hawkins two years ago, he had clear indication that his agency was in trouble:

A State Auditor's report issued in September 2005 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 the Convergys.  I asked at the time: "What guarantee can you offer that the call-center contract with Accenture will not result in a similar lack of promised savings?

Two years ago, Albert Hawkins knew that:

My office received numerous complaints regarding Access HR, including "poor customer service, accessibility problems, payroll problems, difficulty applying for positions, and productivity problems."  Again, I asked Hawkins, "These problems should serve as warning against moving too rapidly toward privatization.  What guarantee can you offer that similar problems will not arise due to the privatization of call-centers by Accenture?"

Two years ago, Albert Hawkins knew that:

I was concerned that "the Commission's decision to privatize the intake system will decrease accessibility to essential social services."  Again, I asked Hawkins, "Have any other states experimented with using call-centers as the primary portal for applying for health and human services?  If so, have there been any indicators regarding whether accessibility was impacted in any manner?

The record is clear.  Albert Hawkins knew what was coming. 

On March 14, 2006, I wrote Hawkins again.  This time, the casualties of mismanagement—uninsured Texas children—were already numbering in the hundreds of thousands.  I wrote:

I am troubled that Texas is moving backward instead of forward in our efforts to insure more children across Texas.  As you know, CHIP enrollment has fallen significantly across the state, especially in the last few months.  From a statewide high of 529,211 in May 2002, there are now fewer than 300,000 children benefiting from CHIP, and projections indicate that enrollment will continue to decline.

And then there was Medicaid.  I informed Hawkins in the same letter:

Children's Medicaid is suffering a similar fate…Currently, there are nearly 79,000 fewer enrolled in February 2006 than in November 2005, and the decline has recently been extremely dramatic: enrollment dropped by over 30,000 children from January to February of this year (2006).

Again, I asked Hawkins a series of questions, looking for answers to—what should be described as—nothing less than a catastrophe. 

Soon enough, I had my answers. 

By October 2006, the state Comptroller found that the Accenture contract was behind schedule and $100 million over budget.  In a letter, she wrote, "Many cases show eligible children are losing health coverage through no fault of their own, but due to mistakes and errors made by Accenture and its subcontractors."

Albert Hawkins oversaw administrative errors and omissions that wrongly deprived 200,000 children of health coverage.

The Comptroller further found in 2006 that:

• The $899 contract estimate for Accenture is "understated and misleading;"

• The contract provides Accenture with perverse incentives to process applications inefficiently;

• HHSC has failed to hold Accenture to the contract's limit on profit;

• The contract pays for effort rather than performance; 

• The contract failed to define or enforce most of the 94 "key performance requirements;"

• HHSC has jeopardized federal funding to Texas;

• HHSC's implementation attempted to do too much at once;

• HHSC did not allow enough time for the vendor to prepare and introduce the system, jeopardizing CHIP and Medicaid coverage for Texas children;

• The rollout was plagued by staffing problems at all levels; and

• HHSC's contract with Accenture was poorly executed and the agency has made limited effort to manage it effectively since its signing.

This year, HHSC cancelled the $899 million private sector contract to administer Medicaid and CHIP. 

Here is the breakdown of dollars spent on the Accenture contract:                                               

Enrollment Broker Services               $127.8m

TIERS Maintenance                          $184.3m

CHIP                                                 $50.4m

Call Center Intake & Operations         $132.8m

IE Eligibility Processing                      $45.4m

TIERS (Texas Integrated Redesign System)/IEES (Integrated Eligibility and Enrollment System)

Now, let’s turn to TIERS—another failed privatization experiment, this one costing Texas taxpayers $500 million.  

TIERS is the computerized eligibility system for social services in Texas.  IEES is the call center system providing entitlement benefits to Texans.

In 2003, under H.B. 2292—the same privatization bill that nearly dismantled CHIP—HHSC assumed responsibility for social service eligibility determination and became the direct manager over the TIERS contract.

An RFP was released in July 2004, and in January 2006, IEES was launched, using TIERS, under the largest contract of its kind in the state's history. To date, the state has spent half a billion dollars on the cancelled contract.

On April, 16, 2007, the US Department of Agriculture sent notice to Albert Hawkins to suspend the rollout of TIERS because:

• TIERS failed to hold case histories and adhere to the requirements for claims establishment and processing, and
• TIERS continued to issue incorrect supplemental benefits to households in the system.

After 30 Senators on this floor signed a letter on March 13, 2007 to ask the status of TIERS, the Inspector General issued his report and findings.  The OIG found the following seven (7) critical failures contributing to the suspension of IEES pilot:

1.   Removal of the original data warehousing requirement without an adequate alternative;

2.   A failure to evaluate alternative technological solutions to TIERS;

3.   A rush to privatize without analyzing all the relevant data;

 4.   Using a different scoring methodology is awarding the IEES contract;

 5.   Giving Deloitte numerous passes on system deficiencies and a failure to enforce contract provisions fundamental to the TIERS contract;

 6.   Wrongly releasing Accenture from a core competency contract requirement, immediately before going live with IEES; and

 7.   The absence of effective management of project and contract oversight.

In addition, the House Human Services Committee reported this April that an independent audit conducted by KPMG found that "the system is lacking appropriate technology design at the database level to properly meet material compliances and improve system weaknesses."

First CHIP.  We have a problem.  Then TIERS.  We have a pattern.

Then we have Frew. 

FREW

For 14 years—and through Albert Hawkins' tenure at HHSC—Texas went to court to deny children health care.

Finally, on April 9, lawyers in federal court outlined a settlement in Frew v. Hawkins, ending the dispute over the state's obligations to provide access to health care for Texas' low-income children. 

Under the settlement, the state will pay physicians and dentists 25 percent to 50 percent more to see Medicaid patients, hire more caseworkers to help families, and reduce wait times on toll-free phone numbers set up to assist families.

But, why did our state wait six sessions to do what we should have done years ago?

Why didn't HHSC do more, instead of litigating to do less?

Now, let’s talk about the lives behind the record—the consequences of incompetence.

Here is the story of Devante Johnson.

DEVANTE JOHNSON

(source: Children's Defense Fund Texas, In Harm's Way, 2007)

Thirteen-year-old Devante Johnson had advanced kidney cancer and could not afford to be without health care coverage. 

But last year, that is exactly what happened, when Devante spent four desperate months uninsured while his mother tried to renew his Medicaid coverage. 

For years, Devante and his two younger brothers were covered by Medicaid. Texas families who qualify for Medicaid or CHIP are required to renew their coverage every six months, and Devante’s mother, Tamika, had tried to get a head start by sending in her paperwork two months before Medicaid was set to expire. 

The application sat for six weeks until it was processed and then transferred to CHIP, because an employee believed their family no longer qualified for Medicaid. At that point the paperwork got lost in the system.

Tamika grew more and more desperate as she watched her son get worse. “I did everything I possibly could,” Tamika, said “I would literally get off the phone in tears, crying because they [CHIP employees] frustrated me so much.”

For four months, Devante went without health insurance as employees unsuccessfully attempted to reinstate his coverage. As a result he could no longer receive regular treatment and had to rely on clinical trials for care. Meanwhile, his tumors grew.  Time was running out.

It wasn’t until a state representative intervened that Devante’s coverage was

immediately reinstated. Two days later, Devante was able to start a promising new treatment. But it was too late.

Devante Johnson died on March 1, 2007.

CONCLUSION

Let's be clear what we don't have here.  What we don't have here is an administrator doing the best under the circumstances.    

What we have documented—what is repeated in every failure over the past few years: Accenture, TIERS, Frew—is an administrator who:

• Failed to provide adequate planning,
• Failed to provide adequate oversight, and
• Failed to respond to errors when they were found.

What we have is a failure of leadership. 

If those two words—"personal responsibility"—mean anything.  And if that responsibility means consequences.  Then there is only one vote on that record. 

A vote of "no" on the nomination of Albert Hawkins for HHSC Commissioner. 

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