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Appendix A (Part 3)

Appendix A (Part 1)
Appendix A (Part 2)
Appendix A (Part 4)
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PROGRAM: Managed Care
MEETING DATE: June 6, 2000


1. Services:

  • Goals: Provide health care services through HMOs to a sub-set of the Medicaid population.
  • Target population:
    • Medicaid recipients; approximately 1/3 of the total Medicaid population serviced through HMOs. Available in eight areas of the state.
  • Legislative authorization:
    • State legislation established use of HMOs at current level. Legislature requiring an evaluation to determine the effectiveness of the system; expansion of the system currently on a moratorium until evaluation completed. Evaluation will review: Access; Impact; Financial, Administrative & Cost Effectiveness; Quality. TDH expects managed care will continue at some level.
  • Requirements related to service delivery and source of requirements:
    • Medicaid is federal requirement; HMO is state initiative

2. Current Delivery System:

  • Describe:
    • Medicaid ID card (8.5 x 11 paper)
    • HMO plastic ID card
    • Eligibility information goes from SAVERR to the Enrollment Broker system (Maximus) and then to Med ID system and to NHIC for the payment of the claim; if there is an interruption in coverage (managed care) the client will be in fee for service instead
  • How does the service delivery system relate to other programs?
    • Some Medicaid recipients also receive other benefits such as TANF and Food Stamps and WIC.
    • Medicaid data resides on the (TDHS) SAVERR system.
  • Pros:
    • Med ID card shows what's needed, next visit
    • Med ID card with HMO card are transportable, can be used if client out of area or in another state.
  • Cons:
    • Paper difficult to hold onto
    • May have multiple Med ID cards depending upon number of health programs for which family members are eligible
    • Med ID cards not always current; problem with providing services to people not eligible, or turning away someone because the client can't provide eligibility info and the provider can't access the information on-line.
    • Processing ID card is based on DHS cut off date; not on a full calendar month. Changes may have occurred at the end of a month in a client household that are not reflected accurately on the Med ID card.
    • Current Med ID cards can be photo copied and used by an unauthorized person (would also need HMO card to use Med ID card)

3. Identify Current or Planned EBT/ESD Initiatives::

  • TDH is exploring the possibility of using an EBT/ESD system as the identifier/authentication mechanism for Medicaid
  • Financial and programmatic impact of EBT/ESD on the agency programs has not been determined.
  • TDH believes EBT/ESD can be used in place of the current Med ID card approach.
  • TDH is interested in exploring the feasibility of one card for the family.

4. Issues to consider related to an EBT/ESD System:

  • Want a card system with a back up system that would allow eligibility access in real time, on-line.
  • Need basic health information on a card.
  • How to provide equipment to providers? Particular issue is for providers who do not adopt the card technology. Many providers do not have electronic billing or internet access.
  • Interoperability must be achievable for times when the client is out of town/state.
  • SAVERR needs to be replaced with a system that will eliminate the cut-off issue.
  • Population is highly mobile, a card system will have to address this issue. Client may move from an area with HMO to an area without or one without to one with.
  • How will Med. ID card and HMO card be linked? One card or two?
  • Issue re: card loss

5. General Comments:

  • TDH to provide population numbers.
  • TDH will provide enrollment numbers and flow-charts.


PROGRAM: Child and Adult Protective Services and Childcare Licensing
MEETING DATE: May 31, 2000


1. Services:

  • Goals: To protect the unprotected - children, elderly, and people with disabilities - from abuse, neglect, and exploitation.
  • Target population: Vulnerable populations who are being are in danger of being abused, neglected, or exploited. This includes children, adults who are elderly or have disabilities living at home or in state facilities.
  • Legislative authorization: PRS was created in 1992 by the passage of HB7 of the 72nd State Legislature.

2. Current Delivery System:

  • Describe:
    Protective Services to Children investigate reports of abuse and neglect; works with families to stabilize homes; places children in foster care when necessary; and places children in permanent homes as appropriate. The agency contracts with other providers for specialized services.

    Adult Protective Services investigate reports of abuse, neglect, and exploitation of elderly people living at home or in facilities licensed by TXMHMR. Protective services may be direct delivery or contracted.

    Child Care Licensing develops and enforces minimum standards for child-caring and child-placing facilities. The agency also licenses those facilities and investigates complaints about them.

    The automated Child and Adult Protective system (CAPS, registers cases and assists case workers with reporting requirements. Connections through this system allow information sharing with TXMHMR. However, the case record is still a paper system that is maintained locally. Currently payments to foster parents and adoption subsidy payments, and payments to local contracted providers are handled with paper warrants.

    PRS uses TWC as a conduit for processing child care.

  • Pros:
    • CAPS has been steadily improved. It helps workers with standardized reports.
  • Cons:
    • Case record documentation is time consuming; and better documentation of child care delivered through TWC's system is needed.

3. Identify Current or Planned EBT/ESD Initiatives:

A judicial web site puts detailed information about children in PRS custody in the hands of judges with the click of a computer button.

4. Issues to consider related to an EBT/ESD System:

  • It is felt that most recipients of these foster care and adoption subsidy warrants would have checking accounts for a direct deposit system.
  • There are problems getting school records for children in foster care. A statewide system for accessing school records would not only help PRS service delivery but should be beneficial to the general public in today's mobile society.
  • Access to certain law enforcement information, statewide, could be very useful to PRS, to check for history of domestic violence, for example. However, law enforcement agencies use a wide variety of automation platforms, making a statewide system unlikely.
  • Since child protective services are delivered through local Child Welfare Boards, what ability exists to implement statewide systems for local provider payments? What about other ESD systems that require equipment to be added?


PROGRAM: Child Support Enforcement
MEETING DATE: May 31, 2000


1. Services

  • Goals:
    • The Office of the Attorney General provides services for parents who wish to obtain or provide support for their children. Services include location of non-custodial parent, enforcement of child support, court orders, and establishing and disbursing payments.
  • Target Population:
    • Custodial Parents - General population (approx. 70% of caseload); TANF population (approx. 30% of caseload)
  • Legislative Authority:
    • The OAG has been designated as the single state agency in Texas with the authority and responsibility to administer the Child Support Enforcement Program pursuant to Title IV, Part D of the Social security Act (42 U.S.C. Section 651 et seq.) Texas Family Code - 234.006. HB3272 requires the OAG to determine the advisability of and method for implementation of a debit card child support system.

2. Current Delivery System

  • Describe
    • OAG receives child support payments from obligors, employers, counties
    • Payments are received manually (in person or USPS) and electronically (automated files)
    • A disbursement file is created daily and sent electronically to the Comptroller of Public Accounts (CPA) office.
    • CPA prints child support warrants which are then picked up by the presort vendor, processed (inserted into envelopes along with other required inserts) and mailed (posting/distribution/disbursement in TXCSES), plus 1 day for printing warrants and mailing
    • Divorce courts set up order; domestic relation offices represent families (5 or 6 offices in the state); and services are free.
    • DHS TANF clients who receive child support currently receive a $50.00 disregard from CSE
    • The OAG currently has an MOU with DHS to process the $50.00
    • The CPA prints child support warrants
  • Pros:
    • Custodial parents are familiar with the current process
    • Flexibility - warrants are accepted at financial institutions, check cashing facilities, grocery stores
    • Works well for unbanked population
    • Process is in place and has a proven track record
    • Fairly cost effective
  • Cons:
    • The process is paper intensive and slow from point of receipt by the OAG's office and distribution to the client
  • Technical Infrastructure:
    • IMB mainframe, ADABAS/Natural, mainframe application, warrant info sent to comptroller via tape
  • What are the direct and indirect costs?
    • Cost for CPA to produce warrant is .02 cents
    • Cost for OAG for envelopes is .017 cents
    • Cost for OAG for postage is .0264 cents
    • Cost for stuffers is .04 cents (2 @ .02 cents)

3. Identify Current or Planned EBT/ESD Initiatives

  • HB3272 requires OAG to explore the use of an EBT system. As a result, the OAG is considering options for improving/changing the method of distribution
  • Electronic Funds Transfer (EFT) (direct deposit) will be available for child support recipients by September 2000
  • Custodial parents who are TANF recipients or unbanked are the prime candidates for an EBT process for distribution
  • DHS will begin processing the $50 disregard not later than 9/01. Consideration should be given to adding this payment to the Lone Star card
  • EBT/ESD possibilities for the unbanked custodial clients are:
    • Low cost or no cost bank account with debit card and the OAG pay the transaction fee
    • Use of a EBT card
    • Continue issuing warrants

4. Issues to Consider Related to an EBT/ESD Delivery System

  • Must offer the non-TANF client a variety of ways to get the child support money
  • Custodial parents prefer receiving warrants (per 1996 survey)
  • Cost of establishing bank accounts for the unbanked
  • Multiple cards might be the best approach using the same platform but a different face on the cards; OAG would prefer a card unique to child support
  • Child support recipients are opposed to using the Lone Star card because of the stigma associated with the card
  • The OAG would like a phased approach to implementing and ESD System:
    • Phase 1 - TANF $50 disregard handled by DHS as part of the Lone Star Card;
    • Phase 2 - Non TANF - banked population with direct deposit through SDU;
    • Phase 3 - Unbanked population - debit card or state opens banking account

5. General Comments

  • Need additional information regarding the State Disbursement Unit and role this has in possible ESD initiatives
  • The OAG is preparing a customer survey to solicit input from customers regarding options and preferences for changes in the methods of distribution

6. Documents Provided by OAG

  • Letter from Dan Morales, Attorney General, to Ms. Rebecca Lightsy, CPA dated 12/31/97 re: Cost-Benefit Analysis of using electronic benefit transfers to distribute child support payments
  • DRAFT - Child Support Enforcement Electronic Benefit Transfer Analysis; dated 12/96
  • Document entitled: Child Support Options in Texas; OAG 5/2000
  • Memo from Howard Baldwin to Blaine Brunson; dated 9/7/99 Subject: EBT
  • Memo from Howard Baldwin to Kathy Shafer; dated 9/22/99; Subject: EBT
  • HB 3272; section 234.006: Direct Deposit of Child Support Payments
  • HB 3273; section 234.007: Use of Electronic Benefits Transfer for Child Support Payments
  • Print out of OAG Web site


PROGRAM: Unemployment Insurance
MEETING DATE: June 7, 2000


1. Services:

  • Goal: To provide temporary income to workers who are unemployed through no fault of their own. Unemployment insurance also serves the local community by getting money into circulation at the outset of a local or national economic downturn, thus reducing the impact of recessionary pressures. TWC administers benefits available under several federally funded benefits programs in addition to the general Unemployment Insurance system paid for by Texas Employers.
  • Target population: Unemployed former wage earners
  • Legislative authorization: Comes from both Federal and State levels. UI is a unique state-federal partnership - one of the very first of its kind. Authorization is through the federal Social Security Act and the Texas Unemployment Compensation Act (TUCA).

2. Current Delivery System:

  • Describe: Warrants issued and mailed every 2 weeks where required conditions are met. TWC issues its own warrants which do not go through the Comptroller's office. All UI claims are handled through call centers. A maximum UI check is approximately $600 every 2 weeks.

    Call centers receive virtually all initial applications for unemployment benefits via telephone. After an initial application, claimants must certify their continued eligibility for benefits every two weeks. The vast majority of bi-weekly certifications (98%) are filed using an interactive voice response system called Tele-Serv (telephone based). The remaining 2% are mailed in on paper forms.

    An average UI check is approximately $440 and contains benefits for two weeks of unemployment. The maximum weekly benefit amount is $294. So a bi-weekly payment for the maximum benefit amount is $588.

  • Pros:
    • Warrant cut the same day TWC makes decision re: claim;
    • Warrants can be sent to a claimant anywhere in the U.S. and its territories. (Checks are not sent out of the country, i.e. Mexico or Canada.);
    • Statement of account mailed with each warrant. Information includes account balances, deductions including child support, taxes and other information relevant to the UI claimant.; and
    • Most major metro areas have one or two day mail service form Austin, making mailing faster than direct deposit in many cases for those areas.
  • Cons:
    • None noted
  • What are the direct and indirect costs?:
    • TWC information indicates cost is approximately $.41 per warrant, including postage, paper, printing, handling and the administrative cost of lost and stolen checks. This cost also includes a statement of account.

3. Identify Current or Planned EBT/ESD Initiatives:

  • TWC has completed a feasibility study re: EBT and direct deposit. Results of the study indicated cost for EBT is $.97 per transaction (cost figures provided in an unsolicited proposal from Transactive).
  • 65 to 70% of claimants have bank accounts-but feasibility study does not support direct deposit to banked claimants.
  • Unbanked claimant survey indicated only 27% interested in direct deposit
  • Other states have set up direct deposit systems with varying degrees of success or lack of success.
  • Over 20% of claimants receive only one or two warrants (checks). Over half of all claimants receive six or fewer checks.

4. Issues to consider related to an EBT/ESD System:

  • TWC is not opposed to using an ESD approach to service delivery, however, previous research indicates this is not cost efficient.
  • Any ESD process would continue to need a method to provide account information to the claimant.
  • The size of checks may be too great for a grocer to become the "banker"; a UI claimant would need access to funds through an ATM structure.
  • Comptroller requirements for setting up direct deposit hinder setting up direct deposit accounts.
  • Because Texas pays benefits to "interstate claimants" who previously worked in Texas but reside in another state, any EBT card solution that would eliminate paper checks must include national ATM access.

5. Documentation Provided:

  • TWC provided copies of the feasibility study and the unsolicited proposal from Transactive.


PROGRAM: Tex Flex Card
MEETING DATE: Friday, June 30, 2000


1. Services:

The Employees Retirement System operates a program called TexFlex - tax-favored reimbursement accounts regulated by Section 125 of the Internal Revenue Code. Money is automatically deducted from state employees' paychecks before federal income and Social Security taxes are calculated. These accounts can then be used by employees to reimburse themselves for eligible health care expenses (such as eyeglasses or medical/dental expenses) and for eligible dependent care (such as child day care). The accounts result in a tax savings to the employee, as those funds are sheltered from taxes.

2. Current Delivery System:

The pre-tax deductions are made from employees' pay at the end of each month, in amounts designated by the employee, up to certain limits. Employees can file claims for reimbursement of eligible expenses from those reimbursement accounts. In the case of the dependent care accounts, claims cannot be paid from the reimbursement account until the funds have actually been transferred from payroll each month.

Currently claims are filed using hard copy forms and receipts from providers for eligible expenses. The IRS requires that any funds remaining unclaimed in a TexFlex account at the end of the year be forfeited. Use of these forfeited funds for plan administration has allowed ERS to eliminate the monthly fee that was formerly charged to employees for processing the TexFlex accounts.

3. Identify Current or Planned EBT/ESD Initiatives:

On September 1, 2000, ERS will implement a new magnetic stripe FlexCard, which will operate similarly to a debit card, for accessing funds from employees' reimbursement accounts. The employee will give the card to any provider with a credit card reader. The provider will then be paid directly out of the employee's reimbursement account, for eligible services.

One feature of the new system is that dependent care funds will be available for distribution at the beginning of a month, rather than having to wait for the payroll deduction at the end of the month. ERS is going to absorb this one-month 'float.' The total cost to ERS is the same, but absorbing this cash flow problem for employees increases the risk slightly to the agency. Receipts still have to be submitted to ERS after the payment has been made via the card, but those receipts can be faxed.

Use of the card is not mandatory. Manual claims will still be processed if that is the employee's preference; and the manual claims process will have to be used for providers that do not have card readers, such as small day care providers.

The change was suggested by the third party administrator, and is the first state government implementation of such a system, although some private systems do exist. The administration of the program is funded out of TexFlex forfeitures at the end of the year. The total program cost is $2.25 per month per employee, plus transaction costs. The employee pays a $1.00 per month charge plus a $.50 per transaction fee for processing. ERS is absorbing the other $1.25 per month.

ERS is interested in migrating to smart card technology, and can imagine it incorporating the FlexCard with other functions such as:

  • State Employee ID
  • Insurance carrier information
  • Insurance co-pay information

4. Issues to consider related to an EBT/ESD System:

  • ERS cannot afford to install the smart card infrastructure in all providers' offices in order to implement that system. However, they would be interested in partnering with other agencies and functions for sharing system costs.
  • Health Insurance Portability and Accountability Act (HIPAA) Requirements. Even if compliance with the new HIPAA requirements is not difficult for state agencies, the issue will be with contractors - e.g., do Blue Cross or the local physician have privacy controls in place? Putting medical records on cards will depend on these providers being HIPAA compliant. That requirement will need to be included in contracts in the future.