Building an ESD System for Texas - ESD Opportunities
Note: To help the reader navigate this report, a chart of acronyms is provided at the beginning of Chapter 2 in Exhibit 1 .
2.8.3. ESD Opportunities
The following discussion begins with the status of TDHS' EBT system and TDH's WIC plans, and presents the current status of services and functions provided by the state which might be enhanced by ESD.
Since 1995, TDHS has used EBT technology to make payments to individuals eligible for benefits in its TANF and Food Stamp Programs. The Lone Star Card, a magnetic stripe debit card, is issued to recipients, and used in retail grocer locations to purchase eligible food items under the Food Stamp Program. Recipients can also withdraw cash TANF benefits. Benefit issuance costs are less for this technological approach than use of paper coupons. In addition, EBT technology has reduced the incidence of stolen benefits and fraud for both programs. Both recipients and the retail community support this approach, and EBT for the Food Stamp Program is mandated by the federal government.
TDHS will transition to the latest version of its EBT benefit issuance system, EBT2, in February 2001. Through agreements reached with its current contractors, TDHS will have the opportunity to add additional TDHS programs to the system software without additional cost. One such program on TDHS' list is the addition of the payment made to recipients in TANF cases, where child support is collected. Programs in other agencies can be added to the EBT2 software for an additional licensing fee. This fee, which covers use of the software only, may be negotiable and has a ceiling of $2.5 million. 47 Once the ceiling is reached, other programs can be added for no additional cost.
Changes are also underway with TDH's WIC program. A contract will be awarded in the near future for a card integrator to assist in implementing a pilot project for electronic delivery of WIC services. TDH anticipates that this initiative will be designed to add an integrated circuit chip to the existing Lone Star Card, creating a hybrid card with magnetic stripe, smart card, and bar code technology available.
With these ESD systems either in place or on the horizon, a logical strategy is to build on this structure. There are a number of opportunities that have been identified below.
The Medicaid program uses a paper form to verify a client's eligibility for medical services. The form, mailed monthly to eligible recipients, is used by both clients and providers in the receipt and delivery of medical services. Not only is it costly to print and mail these monthly Med ID forms, but there are a number of other problems associated with the current process.
These problems are far-reaching, as the process affects every program that deals with the medical needs of clients. That includes Medicaid traditional programs, Medicaid managed care, and the Vendor Drug Program; and it is also a significant issue in programs like TXMHMR's residential services, adult and child foster care, and other such services. Inadequate eligibility information can result in services being denied to eligible recipients, or inappropriate delivery of services to people who are not eligible for services in a specific time frame.
Many rejected claims are caused by providers' assumptions about a client's eligibility-in general, or for a specific service. If a client has a paper Med ID form, providers sometimes do not examine it to ensure that it is for the current month, or that it covers the service requested. If the client is known to the doctor or if they have received the service before, providers sometimes assume the service will be approved. An electronic card system would require eligibility verification in virtually every situation, thus reducing the incidence of rejected claims. Although this requirement has been an initial concern in other states, after a very short time, providers have appreciated the improvement to their claims payment situation. 48
In addition to the programmatic and claims problems related to the current eligibility authentication system, there is a significant cost to the state for accessing the eligibility database maintained by the National Heritage Insurance Company (NHIC), the insuring agent for the Texas Medicaid program. The NHIC database is also not current with the eligibility information on the TDHS database. The capability exists to use the TDHS database with considerable financial benefit to the state.
An ESD system has the potential to reduce many of these problems with the current system, and could become an enhancement to the related Vendor Drug program. More detailed information regarding the current and recommended Med ID system is available in Appendix B, the "Medical Identification Analysis." The specific recommendations for Med ID found in the earlier Med ID analysis will be presented in the Recommendations section of this report.
Another area for consideration is subsidized childcare services provided through TWC and the local Workforce Development Boards (WDB). Texas purchases childcare services for about 100,000 children of families who are receiving TANF benefits or meet low-income guidelines and are involved in workforce programs, as well as certain children who are served by the Department of Protective and Regulatory Services (PRS). These childcare services are delivered through local childcare providers, and are administered by TWC through WDBs who contract with CCCs. Services are authorized locally and a paper referral form is given to the provider for each child. The payment system is partially automated, but the child's attendance information must be entered into the system at the end of the billing period. Attendance data is recorded on a paper form that is used for data entry. Oklahoma uses a similar paper process, and a study of their system indicated that errors in record keeping and data entry resulted in overpayments and slow payments to providers. Since Texas has more automation and a quicker payment cycle, it is expected that overpayments are less of a problem, however data is not available to determine the impact for Texas.
An ESD solution could be implemented for childcare, using the Lone Star Card as a vehicle for automating attendance data collection on a daily basis at the childcare site. Using a private Web site, agency staff could track and monitor service delivery in real-time from their offices, and necessary adjustments could be made retroactively. Such a system could also supply additional financial management tools for payment, budgeting, and monitoring.
In addition to the children currently in subsidized childcare in Texas, another 31,000 are on a waiting list for subsidized slots in childcare facilities. The demand for this service increases with the impact of welfare reform, the nation's positive economy, and the growing low-income population of Texas. This program could benefit from any financial savings in administration, allowing the savings to be redirected into additional childcare services.
TWC also administers employment services funded through federal, state, and local monies. To provide these services, TWC contracts with 28 WDBs that in turn contract with providers for delivery of the employment services.
Most of the employment services require that certain levels of participation be achieved in order to continue to receive funding. In addition, the amount of federal dollars that can be obtained is tied to the availability and use of match money at the state and local levels and to verification that only allowable, billable services are provided and claimed. Tracking and reporting participation rates and match money is a challenging endeavor and one that could potentially benefit from an ESD system.
Another ESD opportunity involves certain state-issued warrants. The state makes payments to some state employees and other individuals through paper warrants. These payments include salaries and travel reimbursements for state employees and annuities to retired state employees through the Employees Retirement System (ERS) or teachers through the Teacher Retirement System (TRS). The state also issues warrants for child support payments to custodial parents and unemployment insurance payments to qualified individuals.
The majority of state employees have their salaries and travel reimbursements directly deposited to their bank accounts. The remaining employees chose not to directly deposit to their bank accounts or lack bank accounts in which direct deposits can be made. Those payments are made using the paper state warrant.
All payments for child support to the custodial parent, and for unemployment insurance are also currently made on state warrants. Direct deposit for those individuals with bank accounts who receive these payments could reduce the number of warrants produced by the state.
A card-based ESD system could be used as a vehicle for payment to all those who do not have bank accounts or who do not choose to take advantage of direct deposit. In the event that any of these financial distribution systems are added to the existing Lone Star Card system, access to funds through ATMs must be made available. Currently cash disbursement services using an EBT/ESD process are available only through POS devices in Food Stamp-authorized grocery stores. Although grocery retailers receive some compensation for providing this service, an expansion of cash payments through other existing retailers is not desirable. ATM access is currently available in other states' and federal EBT systems, and could be a viable option for Texas.
Lack of a mechanism for personal banking can also be an issue for programs other than those where financial benefits are paid by or through the state. Similar issues are involved in some residential service situations. In TXMHMR residential services, nursing homes, and certain PRS children's services, funds belonging to clients are managed by the agency or the facility in trust accounts. These are often manual systems, or systems that do not allow able clients to access their funds easily. Efficient systems are needed for receipt and accountability of funds as well as for actual spending of funds to purchase personal items by or for clients. An electronic system could provide a vehicle for accomplishing this need.
The Department of Protective and Regulatory Services administers the Foster Care and Adoption programs. Payments are made to foster care providers and to families who have adopted children through these programs. Approximately 10,000 payments are made each month for the children in care. Sixty percent of these payments are made through direct deposit, with the remainder made through issuance of warrants. Many of those who have opted against direct deposit, as well as many of those who are using direct deposit, indicate dissatisfaction with the process. The main complaint is the inability to receive statements of account for the deposits that document which children and which service dates are covered by the payment.
Similar complaints regarding direct deposits have been registered with the CPA from a wide variety of payee categories. In response to these concerns, the CPA established a secure Web site and an AVR system in March 2000 that vendors can access to learn details regarding their directly deposited payments. PRS has not yet, taken advantage of this recent method for providing such data to foster and adoptive parents receiving a subsidy.
The Employees Retirement System (ERS) administers insurance benefits for state employees and retirees. As a part of that function, ERS operates the Tex Flex program where state employees can establish reimbursement accounts for health care and/or dependent care expenses. These accounts receive funds redirected automatically from employees' payroll before federal income and Social Security taxes are calculated. Claims for reimbursement are made on the accounts when eligible expenses are incurred. In this way, employees reduce the amounts taken from their paychecks for taxes. In September 2000, ERS implemented the Flex Convenience Card (FLEXcard), a magnetic stripe card which eliminates the wait for reimbursement. An employee can pay for eligible expenses directly from the reimbursement accounts, just like using a debit card. Although employees still submit receipts supporting the reimbursement, less documentation is required, and the receipts can be either mailed or faxed. The card can be used at any provider that accepts MasterCard. Over time, the Flex Convenience Card could be integrated with other services and functions relating to employees.
There is a growing concern for the security and safety of government personnel, buildings, and systems, at all levels. Distinguishing employees from visitors to state agencies is more important in the current environment, and will likely become increasingly so. Most state agencies currently have employee identification badges that are required to be worn in the office, and visitors are often required to register when they enter the building. Some agencies, such as the DPS, use ID badges to gain entry to their buildings, using an electronically scanned magnetic card system, but most agencies' employee badges are simply visual identification devices.
Security of information, and authorized access to an agency's computer systems is also of concern. The issue is not just unauthorized access by visitors in a building, but includes unauthorized access to sensitive information by other employees not cleared to work with that data. Many state agencies also believe there is a need to provide the necessary tools and safeguards to support the rapid growth in e-commerce. A single electronic solution could be used for all appropriate state agencies to control access to buildings and to data and a number of other functions as well. These could include maintenance of training/certification records, key management, tracking meeting attendance and emergency evacuations and electronic forms submission, to name just a few. A single state employee card with interagency interoperability could be a very flexible tool. The card could be a customized vehicle for a menu of products and services from which individual agencies could choose, based on the needs of the agency and their employees.
Another situation of security concern is in certain state facilities where patients or clients reside under secure conditions. In TXMHMR's state hospitals and state schools, for instance, locked units are accessed with metal keys issued to direct care staff and a variety of other professional staff that work across units. The system is cumbersome, both in the time it takes to unlock and re-lock doors at every entry or departure, and in the need for issuing, re-issuing, and tracking keys. A single card that serves as an identification badge as well as a door key could increase efficiency.
Having ready access to basic health information as well as records on immunizations and prescription medications could assist state employees and recipients of a number of state programs, especially those where clients are receiving services from multiple agencies and providers. Using an electronic card with an interactive circuit chip, information such as health plan, primary care physician, co-payment requirements, drug allergies, and chronic diagnoses, as well as immunizations and prescription drugs could be carried by an individual and shared with various medical providers at the individual's discretion.
The availability of this information would be particularly beneficial in programs such as Head Start, Texas Health Steps, Maternal and Child Health, and WIC. This shared data could reduce costs by eliminating duplicate medical tests and treatment and by decreasing administrative expenses. Such a system has the potential to reduce health care costs, both in terms of time and money for the participants and providers.
A system for sharing health care information like the one described above, could be implemented on a common multi-function card for a variety of populations, including all state employees, Medicaid eligible individuals, and members of the Children's Health Insurance Program (CHIP). CHIP is a state-sponsored insurance program designed for children whose families earn too much money to qualify for Medicaid health care, yet cannot afford to buy private insurance. The state contracts with private health maintenance organizations (HMOs) to provide the coverage. The HMOs issue a member card to enrollees-just like any HMO card. The provider uses the phone to check eligibility, cost-sharing and co-payment information; or they can call the health plan to check services. The system is comparable to commercial market coverage. Although the program is supported with state funds, users see it as private insurance, and want to maintain a non-governmental image.
A number of agencies share a common service delivery approach for some of their programs in which services are purchased from a local provider. These services may be delivered at the provider's place of business, or the provider may come to a client's home to deliver services. The types of providers range from established multi-location organizations to single, self-employed individuals, or friends and relatives of the client who agree to provide care. In such service delivery situations, it is not always easy to document the trail from authorization of services to delivery of authorized services to the eligible individual, to payment for the specific type and amount of service actually delivered. Electronic solutions are possible that would allow a seamless system, from authorization through payment. Cards, biometrics or both could be used, much like the childcare system, or the building and systems' access possibilities. The main barrier to such systems today is the impracticality of equipping every small service provider with the appropriate card readers or other electronic interface devices. However, as the technology improves and costs decrease, this may become a viable solution.
Transportation is a service that is integral to the provision of a number of other services. Texas provides transportation related to medical services, workforce training and support, and long term care. In many cases, programs now purchase bus tokens or fare passes for clients' use on public transportation systems or taxicabs. Most of the larger urban transit systems are equipped with fare card readers. As this technology becomes more widespread, it may be feasible to use an electronic card embedded with a stored value for a specified dollar amount or number of rides. The anticipated U.S. Department of Transportation project, referenced in the Federal Government Initiatives section should provide support for development in this area.
School attendance is another area that is difficult to accurately document. This is important to school systems for planning and funding purposes. Documentation of a child's attendance at school is another of the possible uses of a widely held multi-function card, or could be achieved using a single use card specific to a particular school campus. Use of an electronic card at school entrances, together with a biometric access, such as a fingerprint, could automatically record that a child was present at any point in the school day, and could document patterns of absences. It could also function as an immediate behavioral modification program for either poor or exemplary attendance, and as a security measure to reduce the likelihood of non-student entry.
Universities and colleges are using campus cards for a variety of purposes, including building and systems access, library control, food service and other on-campus purchases. The various institutions are creating their own individual systems; however, it may become practical to implement standardized systems across the state, using a single card platform. This could result in cost sharing or reducing costs through volume purchasing.
Other states are incorporating electronic technologies in their driver license. Currently, all but 13 states are using some kind of electronic technology, including magnetic stripes, bar codes, smartcards, and biometrics. Seventeen states employ multiple technologies on their license. Texas' current license system includes a bar code, a magnetic stripe, and the collection of a driver's fingerprint. These electronic tools are used only internally within DPS because a state law limits the use of the driver license. 49
If state law did not prohibit such uses, there would be several ways this broadly held card could serve the residents of Texas. Individuals could access their Texas driving records and accident reports at kiosks located in DPS offices or other serviceable sites, or by using the Internet through a more secured system. Car rental companies could verify valid driver licenses. Driving records could be easily accessed for handgun licensing information. In the event Texas chooses to pursue any use of the driver license for these government related functions, measures would be required to protect the privacy of the data and allow individuals to control card access.
Many of the opportunities discussed above apply to a client population served through health and human service, workforce, and related agencies, but there are also many of these applications that have the potential to benefit the general public. An example is a health or medical card that could be carried by anyone, or use of a card or some other electronic device as a validation of professional licensure. Authentication of identity is applicable to a wide variety of situations, from access to bank accounts, use of credit cards, e-commerce procurement, and access to computer systems, unlocking doors, accessing university services, or documenting school attendance.
For the most part, the ideas presented in this section are not new or unique. But while technically possible, they may have been considered fantasy even a short time ago. Today, electronic technology will allow consideration of any of these initiatives; however, the cost of implementing change has been prohibitive-especially when each potential project has been reviewed in isolation. However, with the broader development of an infrastructure, decreasing cost of virtually all of the expense elements, and the sharing of those costs across multiple applications, many of these possibilities are now feasible to develop.
As Texas moves to take greater advantage of an ESD environment, it should build on common standards and embrace new technologies, to deliver a wider variety of services. With the introduction of a multiple technology card, one that contains an integrated circuit chip, a number of additional functions could be added. The Recommendations section of this report will identify those opportunities that are the most feasible and have the greatest potential for acceptance and implementation over the next 10 years.