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Big Deal: Texas Ends Accenture Contract Early Amid Problems, Lack Of Savings

FssaSome pretty big privatization news came out of Texas yesterday. The Austin American-Statesman fills us in on the details:

"Texas on Tuesday ended a deal worth hundreds of millions of dollars with a private group led by Accenture LLP to manage the Children's Health Insurance Program and enroll Texans in programs such as food stamps and Medicaid.

"The move, which follows reports that thousands of eligible Texans had trouble enrolling in social services, halts the nation's most ambitious effort to privatize such programs. Both champions and critics of outsourcing claimed that Tuesday's action validates their philosophy.

"The mutual agreement between the state and the private group, Texas Access Alliance, severs what was originally an $899 million, five-year contract that was slashed to $543 million in December. The Health and Human Services Commission and the consulting firm Accenture never agreed on all the final terms of the deal.

"'You suggest that this agency has not acted in good faith and has retreated from agreements we reached in December,' Health and Human Services Executive Commissioner Albert Hawkins wrote Monday in a letter to Accenture. 'This is incorrect. To the contrary, (the options Accenture offered) contradicted many of the agreements Accenture made with the state.'

"As the deal dissolves, Accenture spokesman Jim McAvoy said he doesn't expect either side to blame the other for what went wrong.

"'The state's position on funding wouldn't permit us to successfully operate the program,' McAvoy said.

"State workers will run CHIP and manage Accenture subcontractors, including Maximus, until the agency decides who will handle the work. State employees will assume a greater role, although some work will still be done by private contractors, Hawkins said. The transition should be complete by Nov. 1, he said.

"The state's goal, as outlined by the Legislature in 2003, was to modernize the enrollment system for social services by giving Texans the option to sign up by phone and online instead of just in person. By hiring a private group to run the call centers — Accenture's group beat out IBM — state officials expected to save $646 million over five years. But no savings have materialized.

"After problems with a pilot in Travis and Hays counties, Hawkins halted a statewide rollout of the system last year.

"Some of the more than 3 million Texans enrolled in programs such as Medicaid and CHIP reported receiving benefits late or talking to call center workers who couldn't answer their questions.

"'Some people may say that everything is fine now that Accenture is off the job,' said Patrick Rose, D-Dripping Springs, chairman of the House Human Services Committee. 'That's not true. We've got to make sure we get to the bottom of what's happened over the last two years so that we don't repeat the same mistakes.' As several states consider outsourcing social services, some here said Texas' experience shows that enrolling people in critical programs should not be handed to private companies."

Perhaps most noteworthy is this nugget tucked away at the end of a press release announcing the split:

"According to an item in the Austin American Statesman's online version, projected savings from privatization never materialized."


Any comments from the State Capitol?

Or are we getting the usual -


chirp, chirp

Where are the 1,000 new IBM jobs that Mitch promised Indiana???

Our FSSA system get "privatized" on Monday.
My guess is that within two years current FSSA employees will return to the state. However, I also believe this will happen after we see a total collapse of the "new" privatized system. As for IBM there has been no mention of them in any of the county offices it is all ACS not IBM. Another bit of misinformation by our beloved Guv.

Well, of course it's ACS. That's Roob's old company, after all. IBM was a smokescreen from the get-go.

What do you expect from Daniels, Roob and those within the finance & legal department of FSSA? They'll all be gone when this contract is cancelled in the next few years and will still claim it was a good idea to lay-off FSSA employees so a private company that Roob used to work for could hire the same employees back at half the wages and pocketing the rest, while promising the State "supposed" savings and seeing a decline in the quality of services.

Hang in there. As someone who is in the front lines of the Texas mess, I have some experience. Texas never actually laid off state workers, they left in droves because they were told they wouldn't have a job in the future. We never made it to that future, imploded before we got that far, and all who stayed are now trying desperately to get to the point when we can fix the mess. By the way, ACS is a former contractor w/Tx HHSC.

Yes, it's a mess and only going to get worse before it gets better in Texas. Our staff left ahead of a layoff, and the only way they can come back is if they come back as "temps" which many are not willing to do. Our offices are now sinking due to the severe staffing shortages so even with Accenture gone, it's still bad.

I'm running a blog that's linked to this comment if you'd like to check it out- I've referenced this post there.

Thanks, HHSC, I checked out your blog and linked on to others. Indiana is already sinking due to the hiring freeze and people leaving the sinking ship. ACS projects that it will roll out the southern counties in December 2007. All the county employees now have unmanageable caseloads due to staff shortages. It will now take 2 people to do the work of one former caseworker. My caseload is triple what it should be, and more cases are being distributed every day due to caseworkers leaving. ACS is my employer as of Monday,and they have not done payroll sign up for anyone in the state.
We are already melting down like Texas did. It looks like all the psychological misinformation about "You will always have a job", intended to entice caseworkers to stay at their posts until roll out, didn't work.

Wow, that is an explosive bunch of info on the HHSC Employee site. And if you're wondering if nobody in Daniels' camp did their homework, of course they did. THEY DON"T CARE! There's money in it...for him and his pals. That's all that matters. He'll be long gone before the system implodes like it has in Texas.
Well, here's a novel thought, maybe ACS has LEARNED something from their Texas disaster. Don't hold your breath.

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