For Immediate Release:
Wednesday, October 25, 2006
Contact: Carole Keeton Strayhorn
Strayhorn Calls For End of Accenture Contract, Special Master to Oversee Transition, Children to Get Insurance, in Review of Health and Human Services Commission
(Austin)--Texas Comptroller Carole Keeton Strayhorn today recommended the state immediately terminate its contract with Accenture, the private company which was hired by the Governor's administration to administer health and human services to needy Texans.
After her five-month review of the Accenture contract, she reported to the members of the Legislature who had requested the review that she had uncovered wasteful spending and poor contract management by the Health and Human Services Commission.
"The contract with Accenture must be ended. This project has failed the state and the citizens it was designed to serve," Strayhorn said. "I recommend that the contract with Accenture should be ended and that the Legislature pass emergency legislation that removes HHSC's direct management of the project and places responsibility with a turnaround team composed of experts who can effectively manage state resources and stop the drain on tax dollars."
Strayhorn's report found that since Accenture began operations on December 1, 2005, CHIP enrollment has plunged by 8.5 percent, 27,567 children through August 2006. Enrollment in children's Medicaid also fell during this time by 2.9 percent, 53,937 children. Children who were inaccurately denied benefits were in fact eligible.
"In addition," Strayhorn said, "I found that rather than saving money in this biennium, this contract will cost the state almost $100 million more than budgeted while fewer children and families receive the needed benefits."
"I believe the Accenture call center contract is a textbook example of wasteful government spending," Strayhorn said. "The contract with Accenture is fundamentally flawed - it provides Accenture perverse incentives to process applications slowly, inefficiently and incorrectly. It pays Accenture for whatever it spends, regardless of the quality or accuracy of that effort."
Strayhorn recommended the next Legislature approve a special master to oversee the agency's transition from Accenture's management of the program and stop the drain on tax dollars. And most importantly, make sure children receive the health insurance for which they are eligible. In addition, the Legislature should review this administration's 27 major policy changes that have resulted in even more children losing health insurance.
"The turn-around team transition should be funded by the $20 million in excess profits Accenture made while mismanaging its contract," Strayhorn said.
"It is my clear responsibility to look after the fiscal concerns of this state," Strayhorn said. "My administration will stand on performance and accountability. This contract has been mismanaged at virtually every turn."
Strayhorn's review on the Accenture contract was initiated at the request of Sen. Eliot Shapleigh, Rep. Carter Casteel and Rep. Carlos Uresti, who last May asked the Comptroller's Office to analyze, investigate and report on the contract's impact on the state's healthcare system.