Investigation reveals FSSA errors paid with tax dollars


Sandra Chapman/Eyewitness News

Indianapolis - The state agency in charge of welfare denies its billion dollar privatized system is broken. But 13 Investigates uncovers confidential information that reveals widespread failure, paid for with your tax dollars.

The state has its own doubts about a system steeped in delays, staff turnover and even in-fighting among contractors.

Two sisters with a rare genetic disease, insured through Medicaid for years, are now cut off because they turned 19. Their cases have been pending for over a year.

"My kids are going to die because I can't afford the medicine," Missy Gibson said through tears. She's concerned the state's delay will mean more uncontrolled seizures for her daughters.

"I'm asking for help but I can't have it," said another single mom, Shannon Frye. She's legally blind in her left eye, and has a rod in her right leg. The 33-year-old struggles to make it after a debilitating car accident that required a metal plate in her face.

"I mean, I was really messed up from it," she said, still fighting through nerve pain.

Now she and others are caught in another mess, one critics say state welfare contractors are too blind with dollar signs to see.

"Too many people are suffering. More dollars are going out to support the system, a failed system, every day - that's $1.16 billion and it needs to be stopped," said Carmel Attorney Scott Severns.

Severns is talking about Indiana's welfare modernization plan.  Two years ago, the Family and Social Services Administration hired IBM to computerize benefit programs for food stamps, medicaid, and cash assistance.

Those who rely on the system say it's a billion-dollar disaster.

"The whole telephone thing does not work," said Frye.

Frye applied for Medicaid disability in February 2008. Under law, the state was to answer in 90 days. But she didn't even get a denial letter until January 2009, almost an entire year later.

Dr. Kimberly Green has provided patient evaluations for Medicaid eligibility for almost 20 years. Frustrated, she wrote a letter to Gov. Mitch Daniels.

"It was like the information fell into a black hole," said the Bedford therapist. "Their application never got responded to. If they called anybody about it they were just told that it was pending. You don't take vulnerable, impaired, challenged people and make their lives more difficult and call it helping them."

Even employees of the system are fed up.

"I couldn't do it anymore," said Angie Kennaugh. The former Marion resident quit her job at the statewide call center there six months ago. "There's just no way I helped anybody. And I dreamed about it every single night and it was horrible," she said with regret.

In June, employees dismissed by Affiliated Computer Services, the subcontractor running the call center, broke their silence to 13 Investigates.

"We were told to lie," Former Tier 2 Call Center coach Gregory Guy revealed.

They read from scripts promising benefits in two days, ready or not. A spokesman from FSSA says the scripted promise should have been restricted to emergency food stamps.

"The only way that this wouldn't be correctly done is if that employee wasn't doing their job correctly," FSSA Communications Director Marcus Barlow told 13 Investigates back in June.

Outraged by the state's response, inside employees sent 13 Investigates another script showing they were ordered to deliver the line across the board.

"'Sir/ma'am, your case is in the final stages of processing. It should be open by tomorrow,'" Kennaugh says almost by memory. "It makes you sick, because you know that there's no way that this will be done. There's no way that they can tell someone that. They don't know if the state has even looked at it yet," she explained.

ACS recently blackened out the call center windows to block the inside view.

But 13 Investigates has uncovered another internal picture of its operations, this one through a confidential IBM fix-it plan. The 300-page report to the state makes sweeping admissions about a failing system.

First, the state discloses it has a "lack of confidence in subcontractor reported data." It cites "no established quality assurance strategy" and found infighting among the contractors, specifically "finger pointing... an attitude of prove it to me" among IBM, ACS and its own partners.

"There is no friendship between the companies. They're all angry with each other because they're all blaming each other for everything all the time," said Kennaugh, recalling her time in the call center. "ACS is terrified the state is going to take this contract," she said.

The report confirms "call center agents are not empowered to assist the clients," and says redundant verifications "make the experience painful" and that "clients are not notified" to problems or status.

It's just not responsive to anybody. "That seems like a colossal waste of my money," said Green, who still has not gotten a response from the governor's office.

As for its employees, the report describes paying workers on a point system as opposed to hourly "egregious, not generating desired behaviors and negatively impacting motivation," resulting in high attrition and low morale.

FSSA Secretary Ann Murphy refused to speak with us on camera. But the agency's spokesman backed away from talk of ending the billion-dollar deal.

"Canceling the contract is not something we're focused on right now," Barlow said.

With no backup plan and behind closed doors, the state is leaning hard on IBM and ACS to make major fixes by mid-September. Critics fear for some clients and taxpayer dollars, it's too little, too late.

Meantime, Carmel Attorney Scott Severns is working with both mothers on their appeals.

Based on the confidential records, the agency will complete what it calls 22 "quick wins" by September, addressing 36 problem areas for improvement.

The plan calls for reducing errors in processing, allowing client feedback and providing new ways to check case status.

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FSSA call center draws fire from employees