Program Review and Investigations Committee




<MeetMDY1> July 14, 2016


Call to Order and Roll Call

The Program Review and Investigations Committee met on<Day> Thursday,<MeetMDY2> July 14, 2016, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Terry Mills, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Danny Carroll, Co-Chair; Representative Terry Mills, Co-Chair; Senators Perry B. Clark, Stephen West, and Whitney Westerfield; Representatives Ruth Ann Palumbo, Rick Rand, Arnold Simpson, Chuck Tackett, and Jeff Taylor.


Legislative Guest: Representative Joni Jenkins.


Guests: Timothy Feeley, Deputy Secretary, Deck Decker, Executive Director of the Office of Administrative and Technology Services, Adria Johnson, Commissioner of the Department for Community Based Services, Cabinet for Health and Family Services; Kevin Pollari, Principal, Deloitte; Emily Beauregard, Executive Director of Kentucky Voices for Health, and Cara Stewart, Kentucky Equal Justice Center.


LRC Staff: Greg Hager, Committee Staff Administrator; Chris Hall; Colleen Kennedy; Van Knowles; Chris Riley; William Spears; Shane Stevens; Joel Thomas; Aurora Cooper and Rayann Houghlin, Graduate Fellows; and Kate Talley, Committee Assistant.


Representative Mills welcomed legislative guest Representative Joni Jenkins.


Staff Report: State Funding Of The Bluegrass Water Supply Commission.

            Mr. Riley said that the report was revised to address questions raised at the June 9 committee meeting, but that the major conclusions remained the same. One of the revisions to the report is to provide more detail on the first $900,000 appropriation and the $202,000 in local matching funds. More than $625,000, or 56 percent, of these funds were paid to O’Brien & Gere Engineers and to the commission’s general counsel Damon Talley.


O’Brien & Gere was paid more than $323,000. Deliverables produced by O’Brien & Gere included strategy session presentations that covered the topics of project financing options, ownership options for proposed water infrastructure projects, and a proposed partnership with Kentucky American. O’Brien & Gere also conducted a water quality work session detailing disinfection by-products, an analysis and review of alternative sources of water supply, and a unit-cost analysis for the commission’s proposed water system.


Mr. Talley was paid $302,000 from the first appropriation, of which nearly $277,000 was for legal services. Legal work on various Public Service Commission cases accounted for nearly 39 percent of the total; work related to the production of materials for and participation in Bluegrass Water Supply Commission (BWSC) meetings accounted for 35 percent. The remaining 26 percent of legal service hours were for conferences with the Kentucky River Authority and the Kentucky Infrastructure Authority, negotiations with and the development of an agreement between Kentucky American and the commission pertaining to the potential construction of a shared water treatment facility, and work on the grant assistance agreements for both $900,000 appropriations awarded to the commission.


Mr. Thomas stated that BWSC was formed by the Lexington-Fayette Urban County Government as a local entity. Local entities that are not formed by either the state legislative or executive branches have the option to adopt the Model Procurement Code contained in KRS 45A, or use KRS 424.260. The Finance and Administration Cabinet and Government Contract Review Committee are responsible for oversight of state contracts but do not review contracts solicited by local entities.


BWSC received a second $900,000 appropriation during the 2006 Regular Session (as HB 380) that went unused. The HB 380 appropriation was amended during the 2009 Extraordinary Session as HB 4. The amended bill allowed BWSC to pay off two 5-year loans from the Kentucky Association of Counties and the Kentucky League of Cities. Six BWSC member municipalities received the remaining HB 4 funding to help finance water interconnectivity projects. As of January 2016, BWSC had nearly $184,000 remaining HB 4 funds.


Representative Simpson said that his understanding is that the appropriations to the commission were to be used for a regional water project. In response to questions from him, Mr. Thomas said that the second appropriation (HB4) was less restrictive than the initial appropriation, but the remaining commission funds must still be used for water interconnectivity projects.


Representative Simpson made a motion to adopt the report but with reservations about how the money was spent. This situation highlights a danger of public-private entity collaboration. Senator Carroll seconded the motion. The report was adopted by roll call vote.


Representative Mills thanked Senator Buford for raising good questions at the initial presentation of this report. He said he shares Representative Simpson’s concern that public entities be protected while the private entities in these partnerships make money. He asked that staff send a copy of the report to the Lexington-Fayette Urban County Government.


Minutes for June 9, 2016

Upon motion by Representative Taylor and second by Representative Palumbo, the minutes of the June 9, 2016, meeting were approved by voice vote, without objection.


Selection of Study Topic

Representative Mills said that doing a review of the Kentucky Health Cooperative, a topic selected by the committee at its May meeting, would be improper because of ongoing litigation.


Senator Carroll proposed as a replacement a study of salaries and benefits and retirement packages of executives of Kentucky’s public colleges and universities over 10 years.


Senator West suggested that the study also include administrators’ salaries and benefits. Senator Carroll said the levels would be more closely defined as the study proceeds.


In response to a question from Representative Palumbo, Senator Carroll said that the study will include the community colleges.


Representative Simpson suggested that the review of community colleges include administrative councils. The administrative structure varies greatly. Some schools have significantly more administrators than others, and some have more highly paid administrators.


Representative Taylor asked whether the study would include baseline data on compensation in other states. He suggested southeastern states as a comparison.


Senator Clark suggested using the benchmark postsecondary education institutions as comparisons.


Representative Mills said states that are near Kentucky would be a good comparison.


Upon motion by Representative Simpson and second by Senator Clark, a study of compensation, severance, and retirement packages of executives and administrators at Kentucky public colleges and universities over 10 years was adopted by roll call vote. The study is to include the community colleges and comparisons with institutions in other states.


Rollout of benefind

Representative Mills explained that he asked representatives from the benefind program to appear at today’s meeting because of problems caused by the rollout of benefind. His purpose is to learn about problems so that they can be avoided in future rollouts. He emphasized that he is not trying to assign blame. He noted that he would like plans for future systems rollouts to be presented to the Program Review and Investigations Committee before implementation.


Mr. Feeley said that benefind was rolled out on February 29. The program was flawed from the beginning. Working with Deloitte, great strides have been made.


Mr. Decker said that the previous administration received approval from the Centers for Medicare and Medicaid Services to build an information technology system to integrate benefits eligibility across all state-administered health and human services programs. benefind now provides a single system for economic stability programs. The original benefind release date was December 4, 2015. This was postponed until December 28 and then until February 29, 2016, when benefind release 5 went live. A rollback/contingency plan was not feasible and would have been cost prohibitive. Problems arose immediately, and a large number of notifications went out in error. Notifications were stopped on March 23.


The state was required to pay Deloitte $3.5 million for the 2-month delay in rollout, which was renegotiated down from $3.5 million per month. There were several core issues related to the initial problems. Training was inadequate and occurred months before the February 2016 rollout. There was no proficiency test for staff before rollout. System interfaces were not optimal. The pilot project was insufficient, and only 10 counties were included. A 2013 Department for Community Based Services (DCBS) workforce study recommended a statewide structure, with a central call center, which has been inadequate for benefind. During conversion, some data sources were outdated.


Mr. Decker summarized corrective steps that have been taken. These include streamlined operations and communication. There are now meetings twice per week and morning and afternoon status reports. A rapid response team of 10 to 20 Deloitte and Cabinet for Health and Family Services (CHFS) staff was created to deal with cases requiring immediate action. The team has successfully addressed 757 cases. The Operation Field to Frankfort team of 60 to 100 DCBS employees from across the state, assisted by 12 to 15 Deloitte employees, was created. The team, which is consolidated in Frankfort and receives additional training, addresses the high volume of cases and specialized populations experiencing issues. The team has processed more than 50,000 cases and been instrumental in identifying systems issues during the rollout process. Community outreach has been strengthened. The phone system has been improved. The typical call wait time has decreased from 1.5 hours to 20 to 25 minutes. Up to 120 Deloitte staff have provided on-site training and support for DCBS field offices. Extra training has been developed and delivered.


Backlogged cases have been caught up except for the 161 cases pending for information from clients. In the future, CHFS leadership will implement organization and process changes including establishing permanent rapid response and Operation Field to Frankfort teams. There will be a formal examination of the DCBS workforce and structure. Continuous systems improvements will be made. Future plans include integrating child care eligibility by April 2017.


Mr. Feeley said that the benefind concept is good, but there were flaws in the design of the system. Training was outdated for the system that went live in February.


Mr. Pollari said that the rollout has caused frustration. The main concern is to prevent loss of benefits. Every worker has the ability to override the system and issue benefits on the spot. Deloitte did get paid for the delay, but Deloitte staff have been working on issues related to the rollout.


Ms. Beauregard said that she and Ms. Stewart represent stakeholders who have been involved in outreach, education, and enrollment efforts since 2013 and that they have been deeply involved in working to address the benefind crisis and improve the system moving forward. They are here to share the experiences of consumers and kynectors during the rollout.


Ms. Stewart, who is a kynector, said that she learned of the rollout via an emailed tip sheet on February 29 that was riddled with errors. Then they started hearing from consumers. Some were sharing insulin because benefits had been cut off. Some were cut off through no fault of their own. Some received no notice. Some received erroneous notices. Notices still going out do not provide any specifics on why someone is ineligible for a benefit. Phone calls to DCBS can take hours. It may only take 20 to 25 minutes for someone to answer the phone, but the person who answers often cannot address the question. The caller goes back into the phone queue each time the question cannot be addressed, so getting a response can still take hours. Sometimes people are not enrolled in a program it is known they are eligible for because there is a wait for information for another program. Internet speed for many field workers is an issue.


Ms. Beauregard said that kynectors were not initially trained for the rollout. Information that was provided to DCBS workers was not always provided to kynectors. There are more than 500 kynectors who could have helped with the rollout.


Ms. Stewart said that excellent training guides were provided kynectors but not until April.


Ms. Beauregard commended the current administration for extending coverage in March for those who were about to lose coverage. This is not a long-term solution. There are remaining questions. Why were benefits sometimes revoked without warning, with no chance for appeal, and with little information provided? Why were letters of apology and explanation not sent? Why were kynectors not provided training and information on workarounds before the rollout? Ms. Beauregard said that recommendations from Kentucky Voices for Health were being distributed to committee members.


In response to questions from Senator Carroll, Mr. Decker said there are still 257 people who need to receive letters explaining that their 3-month Medicaid extension during the period when benefind was not working properly are now expiring and giving instructions on how to reapply. Mr. Feeley said that they concentrated on fixing problems. Ms. Johnson added that because reviewing all the incorrect notifications was so labor intensive, they focused on an internal rapid response rather than sending letters at a time when they did not yet know the extent of the problems.


Senator Carroll responded that a detailed public announcement was not required, just something about the problems occurring with the state moving to a new system.


Senator Carroll asked whether Deloitte was prepared for the rollout. Mr. Pollari said one of the main problems was that the system generated 25,000 incorrect letters, 9,000 because of bad data received concerning former prisoners from the federal system. Another big problem was that Kentucky’s various systems had incorrect data or could not communicate effectively in some cases. The March 2016 benefits were distributed via the old system. Decisions based on benefind began April 1. Deloitte performed more than 15,000 test cases with multiple checkpoints, but they did not anticipate some of the problems. The cost of phasing in the system over months would have been very expensive.


In response to a question from Representative Mills, Mr. Feeley said the first go live date was December 4, 2015. The former administration delayed it to December 28. The current administration decided that it would be better to wait until the open enrollment period closed. There were financial penalties for delaying. Everyone involved in planning said that the system was ready to go live in February 2016.


Representative Mills commented that when he visited field offices, he was told they were not receiving adequate training and help. He noted that testing should have been better and that there needs to be a connection with policy. Deloitte staff did not know program policy. In the future, a connection is needed between the people who know policy and those implementing the system. In rollouts he has been involved in, the system was not implemented all at once.


Ms. Johnson said that one problem was a system design that forced workers doing intake to ask benefit recipients a long list of nonessential questions.


Representative Mills commented that the field offices reported receiving a list of 100 or more system fixes to check. This was overwhelming for them. An additional problem is Internet speed in parts of Kentucky.


In response to a question from Representative Palumbo about Kentucky Voices for Health’s recommendations, Mr. Feeley said CHFS staff have met with Kentucky Voices staff and will continue to do so.


Senator Carroll asked if the contract with Deloitte allowed the state to recoup funding from Deloitte because of the problems that have been encountered. Mr. Feeley said the contract with Deloitte called for a specified amount to be paid to Deloitte to get a workable system. Deloitte continues to work on this. Mr. Decker said the contract with Deloitte penalizes the state; this is a problem with contracts in general.


Senator Carroll suggested that the attorney general should possibly look into whether there should be some recoupment of cost. Mr. Pollari said Deloitte invested 40,000 hours of its staff’s time to fix the problems, which exceeds contractual obligations. Deloitte still has staff in the field at no cost to the state. Senator Carroll commented that he was still unsure whether that negates the shortcomings. He noted that everyone he hears from says that those answering calls are friendly.


In response to a question by Senator Carroll, Ms. Johnson said a formal workforce reorganization is needed to enable the system to be fully functional. The plan is to move to a more regional approach. In the interim, staff have been dedicated to special populations. Mr. Decker cited the example of refugees as such a population. He said that benefind is working. It took 3 months to get approval for kynectors to work in benefind. kynectors now understand the policies for Medicaid, but they will need to be trained on social services. Mr. Feeley said the goal is to have an integrated system, so if someone applies for one program, the system would tell the applicant whether she or he is eligible for other programs. Mr. Decker said that kynectors still will have to go to DCBS to resolve cases. Mr. Feeley said that the cabinet is working with the federal government to get full system integration.


Senator Carroll requested that user organizations be involved for transparency.


In response to a question from Representative Mills, Ms. Johnson said that in the future a caller would be able to speak with a live person.


In response to questions from Senator West, Mr. Decker said benefind was paid for by the federal government but it did not specify a system to be used. Mr. Pollari said the cost of benefind is approximately $20 million per year. Senator West asked what the cost of kynect would have been. Mr. Decker and Mr. Feeley replied that they would find out for the committee. Senator West said that there were also problems with the rollout of kynect. The state is implementing the Affordable Care Act, which is very complex, so he commended the team for what it has done.


Representative Simpson said that he was at a recent Taskforce on Vulnerable Kentuckians meeting next to the cabinet’s office in Jefferson County. Taskforce members wanted to visit the cabinet office, but the office was closed for lunch. This is very inconvenient for working people who can only visit offices during lunch. The challenge is that we do not communicate well and are not sensitive to the needs of the people in poverty. Ms. Johnson said that facilities are no longer closed during lunch. Mr. Feeley noted that morale at the cabinet has been low and there is a lot of staff turnover. Representative Simpson asked that the cabinet address the recommendations made by Kentucky Voices for Health for the next Program Review meeting.


Representative Taylor commented that the state gambled with human health and safety and lives and that this is not acceptable. He asked why there was no backup plan. Mr. Decker said that the previous administration designed the system. Mr. Pollari said that a plan B would be the ability to let staff go off the system to help people, which they could do. Staff were also authorized to help people by reinstating their benefits. Representative Taylor said he was basing his comments on hearing from constituents who could not get help.


Representative Mills said we talk a lot about people receiving help who do not deserve it but not enough about people who deserve help but do not ask for it.


Representative Mills said that because the regular monthly meeting date conflicts with the National Conference of State Legislatures conference, the next Program Review meeting will be on Friday, August 12.


Senator Carroll commended the efforts to improve the system. He expressed confidence that the benefits of the system will be realized.


The meeting was adjourned at 12:06 pm.