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Comptroller's Desk
CHIP Needs Outside Investigation

I am shocked and appalled by the recent findings of the Texas State Auditor's Office (SAO) highlighting "serious deficiencies" in the management of the Texas Children's Health Insurance Program (CHIP) contract. Because the auditor reported on these questionable activities, I recently wrote to United States Attorney Johnny Sutton and United States Health and Human Services Acting Principal Deputy Inspector General Dara Corrigan asking for a federal investigation into the mishandled CHIP contracts.

The SAO report also found that the Health and Human Services Commission's lack of oversight and lax standards for the CHIP contractor for rural Texas led to "excessive or unnecessary payments" of $20 million.

More than one-fourth of the money went to a company that "had no employees and did not provide a service" that "directly benefited CHIP," according to the auditor.

Because federal dollars as well as state dollars are involved in this scandal, an independent, federal inquiry is warranted.

A number of the players involved have connections with the Texas administration. Consequently, an internal investigation would not be independent because the governor, who sits atop the Texas Health and Human Services System, appoints the Health and Human Services System Inspector General.

By my estimates, the agency's lax, possibly criminal mismanagement that led to $20 million in overpayments could have paid for insurance for 17,000 children for a year. Since last September, 145,500 children have been dropped off the children's health insurance rolls because of budget cuts. That's unconscionable!

The time has come for an outside, independent investigation of all aspects of the state's CHIP program.


[signed]
Carole Keeton Strayhorn
Texas Comptroller