1. 900 Lydia Street - Austin, Texas 78702
Phone (512) – fax (512)
Health & Human Services Reorganization and the Integrated Eligibility Initiative
One Voice:
A Collaborative for Health and Human Services
September 30, 2004
Celia Hagert, Senior Policy Analyst

2. Overview
Reorganization/Consolidation of HHS Agencies
Proposal to Use Call Centers for Eligibility Determination
Close local offices and replace with up to three call centers and an Internet application
Significant new role for private providers and their volunteers
Outsourcing of State Agency Functions and Jobs

3. Center for Public Policy Priorities
Major Concerns
Health and human services cuts that accompanied reorganization shift responsibility to local governments/private providers who do not have the resources to replace services
As a result, 83 counties, 10 cities, and three public health districts, and three chambers of commerce have passed resolutions against the new law
Proposal to Use Call Centers for Eligibility Determination
Loss of local offices/jobs
Unreasonable expectations from local nonprofit providers who do not have the resources to make up for loss of state workers
Could lead to less access to federal/state services, more dollar loss
Outsourcing of State Agency Functions and Jobs
State/regional/local job loss
Raises concerns about accountability, ability of state to monitor contractors, performance, openness
9/17/2018
Center for Public Policy Priorities

4. Reorganization/Consolidation of HHS Agencies
Consolidated eleven HHS agencies into four and placed them under the oversight of the Texas Health and Human Services Commission (HHSC).
Consolidated policy/rulemaking authority under HHSC executive commissioner
Uniform organizational structure for HHS agencies
Stripped individual agency directors of policy/rulemaking responsibilities.
Replaced agency governing boards with advisory councils—with no rulemaking authority.
Abolished most advisory committees.

5. Reorganization/Consolidation of HHS Agencies
Consolidated all administrative functions (legal services, human resources, etc.) for HHS agencies at HHSC.
Created new Office of Inspector General at HHSC; consolidated fraud/abuse functions (detection activities) for HHS agencies at HHSC.
Changes in agency structure/functions will occur at state, regional and local levels

6. The Health and Human Services Enterprise
New powers & responsibilities of the Health and Human Services Commission:
HHS program/policy
HHS rate setting
All administrative functions for HHS agencies: legal, HR, contracting, procurement, purchasing, etc.
Medicaid
CHIP
Vendor Drug Program
Eligibility services (Food Stamps, TANF, Medicaid, including integrated eligibility project, TIERS)
Family violence
Child Nutrition
OIG
Ombudsman
9/17/2018
Center for Public Policy Priorities

7. The Health and Human Services Enterprise
New agencies and responsibilities:
Dept. of State Health Services, DSHS (health and mental health services—includes state hospitals & community services, alcohol and drug abuse)
Dept. of Aging & Disability Services, DADS (mental retardation services—includes state hospitals & community services, community care, nursing homes, aging services)
Dept. of Assistive & Rehabilitative Services, DARS (rehabilitation services, services for the blind/visually impaired, services for the deaf/hard-of-hearing, early childhood intervention)
Dept. of Family & Protective Services, DFPS (child/adult protective services, child care regulation)
9/17/2018
Center for Public Policy Priorities

8. The Health and Human Services Enterprise
Agencies that were abolished:
Interagency Council on Early Childhood Intervention
Texas Commission for the Blind
Texas Commission for the Deaf and Hard of Hearing
Texas Commission on Alcohol and Drug Abuse
Texas Department of Health
Texas Department of Human Services
Texas Department of Mental Health and Mental Retardation
Texas Department on Aging
Texas Health Care Information Council
Texas Rehabilitation Commission
Note: Cancer Council became independent entity, no longer an HHS agency; moved to Article 1 of the budget (Gen. Govt.)
9/17/2018
Center for Public Policy Priorities

9. Governor
The Consolidated Texas Health and Human Services System as directed by HB 2292, 78th Legislature
HHS Transition
Legislative Oversight Committee
2 Senate members
2 House members
3 Public members
HHSC Commissioner, ex-officio
Health and Human Services Commission
Office of
Inspector General
Executive Commissioner
Health & Human Services Council
HHS Centralized Administrative Services
Medicaid
HHS Rate Setting
HHS Program Policy
Vendor Drug Program
CHIP
TANF
Eligibility Determination
Nutritional Services
Family Violence Services
HHS Ombudsman
Interagency Initiatives
HHSC
DHS
Assistive & Rehabilitative Services Council
Aging & Disability Services Council
State Health Services Council
Family & Protective Services Council
Department of Aging and Disability Services
Commissioner
Mental Retardation Services
State Schools
Community Services
Community Care Services
Nursing Home Services
Aging Services
Department of State Health Services
Commissioner
Health Services
Mental Health Services
State Hospitals
Community Services
Alcohol & Drug Abuse Services
Department of Family and Protective Services
Commissioner
Child Protective Services
Adult Protective Services
Child Care Regulatory Services
Department of Assistive and Rehabilitative Services
Commissioner
Rehabilitation Services
Blind and Visually Impaired Services
Deaf and Hard of Hearing Services
Early Childhood Intervention Services
DHS MHMR
TDoA
MHMR
TCADA TDH
THCIC
ECI
TCB
TCDHH
TRC
PRS
9/17/2018
Center for Public Policy Priorities
Agencies formerly providing programs
7/30/03

10. Center for Public Policy Priorities
Agency Councils
New 9-member agency councils will replace governing boards.
Councils do not vote; instead make recommendations to their agency commissioner/HHSC commissioner.
Must reflect ethnic and geographic diversity of the state.
Meet quarterly
Draft of council roles/responsibilities and new rulemaking process on HHSC’s website at
9/17/2018
Center for Public Policy Priorities

11. Status of the Reorganization
HB 2292 policy changes were effective on September1, 2003, or January 1, 2004.
New agency commissioners appointed December 18, 2003.
Organizational structure for new agencies approved.
DFPS began operations on Feb. 1, 2004; DARS on March 1, 2004.
Call center “business case” released on March 25, 2004
DADS and DSHS began operations on September 1, 2004.
Many contracts awarded to manage reorganization/implement privatization provisions
9/17/2018
Center for Public Policy Priorities

12. New Web Sites and Numbers
— The commission's main site provides information about all of the state’s HHS programs.
— The Department of State Health Services site.
— The Department of Aging and Disability Services site.
– The Department of Assistive and Rehabilitative Services site.
– The Department of Family and Protective Services site.
HHSC also has a new hot line, (877) – a centralized referral about health and human services programs in Texas.
9/17/2018
Center for Public Policy Priorities

13. Major Concerns with Reorganization
Massive centralization of power at HHSC raises concern that HHS policy decisions will
become less open to the public, in particular, the advocates who look out for the interests of the people these programs serve;
more subject to the exclusive priorities of the governor, over those of the legislature, and therefore more susceptible to political considerations
Such a large agency (HHSC) will lead to
more bureaucracy,
confusion among stakeholders and the public over whom to contact for a specific programs, and
Bottlenecks in the rulemaking process

14. Major Concerns with Reorganization
Massive centralization of power at HHSC raises concern that HHS policy decisions will
become less open to the public, in particular, the advocates who look out for the interests of the people these programs serve;
more subject to the exclusive priorities of the governor, over those of the legislature, and therefore more susceptible to political considerations
Such a large agency (HHSC) will lead to
more bureaucracy,
confusion among stakeholders and the public over whom to contact for a specific programs, and
Bottlenecks in the rulemaking process

15. Major Concerns with Reorganization
Loss of specialized HHS agencies will mean
less specialized attention and care for clients
A lack of responsiveness to the advocates and stakeholders who represent these clients
New agency councils have no authority over policy direction or rulemaking at their respective agencies:
New rulemaking process reduces councils to a superficial advisory body with no real opportunity to affect the debate

16. Call Centers & Proposed Integrated Eligibility Model
State’s proposal would move most eligibility functions for TANF, Food Stamps, and Medicaid to three call centers.
Total eligibility staff would be reduced by 57%, from 7,864 workers to 3,377
57% of local offices would be closed (from 381 to 164); offices would become “Benefit Issuance Centers.”
Internet application
TIERS - New computerized eligibility determination system and database (currently under pilot) would support system
Use of 211 I&R network as gateway to call centers
Private, community-based organizations expected to DONATE 600 volunteers & 1 million hours to help clients navigate the new system.

17. Call Centers & Proposed Integrated Eligibility Model
Estimated savings of $389 million in state and federal funds over five years, 46% of which is state dollars.
Original timeline proposed implementation in September 2004 with overhaul complete by 2006
Timeline revised in July with start-up date of May 1, 2005.

18. Call Centers & Proposed Integrated Eligibility Model
Request for Proposal (RFP) released in July for
1) call centers;
2) Operation and maintenance of TIERS (new computerized eligibility determination system and database); and
3) Health plan enrollment and EPSDT screening
Outsourcing of call centers would mean an even greater loss of state jobs, although small workforce of state staff retained to make eligibility decisions.
See for more information about RFP

19. Key Concerns with Call Center Proposal
Good ideas that should be implemented as enhancements, not replacement
Too many untested assumptions:
--211 capacity
--Resources/ability/desire of CBOs
--Reliability of TIERS and other technology
--Ability of clients to use Internet/apply by phone
Timeline is overly aggressive with no real pilot phase.
Drastic/immediate reduction in staff without testing could lead to less access or general system failure
Could reduce access for special needs clients; raises concerns over potential ADA/civil rights violations.
Could jeopardize the billions of dollars in federal funding for these programs. Over $17 billion in benefits, state and federal, issued in 2004.

20. The “Non-Profit Tax:” Concerns over Proposed Role for CBOs
Staffing levels in proposed model are dependent on CBOs assisting clients navigate the new system; yet no formal enrollment process
Calls for unpaid volunteers, who may not be a reliable workforce
No money for staff or the constant training that will be needed
Unclear what will be expected of CBOs: Will they take applications?
No formal contracting process envisioned; decisions are left up to private companies who bid on RFP
No discussion of the need for monitoring CBO performance or penalties if CBOs fail to fulfill responsible assigned to them.
Raises questions about CBO liability or risks to CBOs of taking on this role. No discussion of CBOs’ ability to:
Meet statutory or regulatory requirements, such as a client’s “right to apply without delay”
Comply with application processing timeliness
Maintain required records and comply with privacy laws

21. Key Concerns Over Proposed Staff Levels
DHS offices are badly understaffed now; local offices and staff in a constant struggle to do more for less.
Eligibility staff at local DHS offices reduced 41% since ’97
Caseload per worker increased 101%
Inadequate staff levels at DHS eligibility offices have led to
Poor customer service,
Lawsuits, and
Most recently, disruptions in services to Medicaid clients as a result of a backlog in the processing of renewals.
New approach could jeopardize program integrity

22. Staffing Shortages at DHS Offices
SOURCES: DHS Regional Information and Performance Report, August 14, 1997; DHS Regional Summary Report, July 2003; DHS Program Budget and Statistics, November 2003.

23. Staffing Levels & Average Workload in Region 6

24. Staffing Levels & Average Workload in Region 6

25. Recommendations on Integrated Eligibility Initiative
New tools should be implemented as an enhancement, not a replacement, to the current model.
New approach and tools should be thoroughly tested before local offices are closed or staff reduced significantly.
New model should begin with an analysis of how many staff are needed to run system smoothly
Business case and proposed model should be revised with full input from state eligibility workers, advocates, industry, and other stakeholders.
See our full analysis at

26. New Privatization Provisions
Provides for privatization of certain administrative functions for HHS agencies, e.g., purchasing, human resources
HR contract awarded to Convergys in June
RFP for purchasing released in July.
Expansion of Medicaid Managed Care will double the population served under managed care contractors (from current 1 million to more than 2 million)

27. New Privatization Provisions
Privatization of certain mental health/mental retardation services: MR Intermediate Care Facilities (ICF-MR), state schools, state hospital Note: One bid received to operate state school that was deemed inadequate; No bids received to operate state hospital
Medicaid finger imaging pilot (see
Prescription drug contracts
Call center privatization, if cost-effective
See: for more information about these contracts and the procurement process.

28. Privatization of Service Delivery
Major Concerns with
Privatization of Service Delivery
Access - A more automated, impersonal eligibility system with low-skilled and untrained staff could lead to less access
Jobs - Loss of state employee jobs, particularly in rural areas
Accountability - Will state be able to protect client rights & hold private companies accountable for their performance in operating these programs?
Taxpayer dollars – Do private companies always offer the best value when their bottom line is profit?
Long-Term Impact – What is the cost to the state if things go wrong? 28

29. Sound HHS Outsourcing Process
Recommendations for a
Sound HHS Outsourcing Process
Create privatization review board (with legislative and public members) with authority over major HHS outsourcing contracts
Strengthen role of Transition Legislative Oversight Committee created by HB 2292
Develop objectives for outsourcing related to achieving savings, improving service delivery, increasing program integrity, and local impact that will govern outsourcing decisions
Require an independent cost-benefit analysis be done prior to awarding a major contract to confirm that these objectives will be met

30. Sound HHS Outsourcing Process
Recommendations for a
Sound HHS Outsourcing Process
Develop a standard testing and roll-out process for new service delivery models that include
real pilots,
thorough evaluation, and
solid fall-back option and safeguards if new system fails
Develop a process similar to the state agency rulemaking process for gathering public input before major outsourcing decisions are considered or made