On Wednesday, Tim Jeffries, the former director of the Arizona Department of Economic Security revealed that the current computer software program used by the Department and the Arizona Health Care Cost Containment System is a failed system. According to multiple sources, due to this failure, unknown numbers of needy Arizonans have been periodically and wrongly denied Medicaid benefits.
In an appearance on the James T. Harris radio show, Jeffries explained some of the failures of the system known as HEA Plus (Health-e-Arizona PLUS). HEA Plus, the State’s Medicaid eligibility system, was launched under the purview of the Arizona Health Care Cost Containment System (AHCCCS) with the launch of Obamacare and subsequent expansion of Medicaid.
“The system was never intended to just be for Medicaid,” said Jeffries. “It was intended to be integrated with TANF (Temporary Cash Assistance For Needy Families aka welfare) and SNAP (Supplemental Nutrition Assistance Program aka food stamps) because our offices across the state handle eligibility processing for all three Federal programs.” He continued “Arizona DES has 77 service centers…an integrated system is needed to efficiently and cost-effectively assess eligibility of Arizonans for Medicaid, food stamps and welfare.
“As you know,” explained Jeffries, “I did over 600 town halls across the state during my 633 days at the Department. In the summer months of 2015, colleagues – employees, were hammering me about the HEA Plus system. Even though the system was under AHCCCS purview, all the eligibility workers were in DES. As a result (of the employee feedback), we started to look deeply at what was going on.”
According to experts, the HEA Plus system, built by SIS (Social Interest Solutions), had a faulty software code foundation. That faulty foundation was of such poor quality there was no practical way to shore it up, or save it. The system is not scalable nor sustainable. And, through the cracks of that failed foundation Arizona’s neediest residents fell periodically.
“HEA Plus was supposed to be a 20 month project that would cost taxpayers – largely federal tax payers – $47 million. As a result of this initiative, taxpayers were supposed to have a 21st century system for Medicaid, food stamps, and welfare,” Jeffries told Harris. “When I started digging into HEA Plus as a result of hearing from thousands of DES colleagues, we were at 50 months and $102 million and only a third of it was done,” said Jeffries of the HEA Plus project he inherited that remained largely under the purview of AHCCCS.
According to Jeffries, at that point; the 50 months and $102 million mark, only the Medicaid portion was completed and already not working well. “So after a lot of research and an internal assessment at DES; because I brought in some good technology people, we determined in our Agency’s opinion that it was not in the taxpayers’ interest to continue with that system. Particularly since the software provider – the inept software provider – was pitching the State on another two years and another $50 million,” said Jeffries.
“It’s government at its very worst,” concluded Jeffries. “In fact, long ago when we had a joint meeting with AHCCCS; because I wanted to get deep into this, I appropriately fumed a bit about $100 million plus being incinerated. A well-intended AHCCCS colleague stated, ‘Well Director Jeffries you need to understand that the bulk of that money is federal money.’ My reply was “that’s our money and it’s the most expensive money. It’s money we have to ship over the Mississippi River in hopes that it comes back to us. Needless to say, I became a dog with a bone as it pertains to HEA Plus. The whistle had been blown, and I’ll blow it more.”
Harris asked Jeffries where the hundred million dollars went to which Jeffries replied, “The money went towards the development of the Medicaid eligibility system and only basic work had been done on the food stamps and welfare system integration.”
“Not to add to the taxpayer pain, it was $102 million as of last summer and so more has obviously been spent since over and above that. That didn’t even include tens of millions of dollars of time invested by DES and AHCCCS staff. So the net is – if SIS continues, I think this will shake out to be a quarter of a billion dollar project even though they pitched it at $47 million (over 5 years ago). Here’s another note – not that I’m trying to crater your afternoon,” said Jeffries, “there is no contract. What was signed was a time and materials purchase order, and it didn’t even have (milestones, penalties and clawbacks). It was basically a go-to-work-send-us-your-bills.”
According to multiple sources, the HEA Plus failure is widely known to government officials in several agencies and the Executive Tower. A former elected official informed us, Governor Doug Ducey, Chief Operations Officer Henry Darwin, AHCCCS Director Tom Betlach and DES Operations Director Jim Hillyard are working overtime to keep this massive failure secret.
Harris and Jeffries discussed “changing government to the speed of business;” a campaign slogan Ducey had repeated over and over. Unfortunately for Jeffries, he passionately believed it was Ducey’s promise to taxpayers, not just a campaign slogan.
One of the “changing government to the speed of business” initiatives Jeffries had proposed to Governor Ducey was that the software vendor, SIS, be terminated and Arizona “quickly pivot to another solution. There were seven or eight states,” said Jeffries, “that had a solution (architected by IBM). Some of those states had a working solution. So, I thought it would be sporting for us to actually have a working solution too.”
With over 100 legacy custom built systems, some of which dated back to the President Carter and President Reagan years, according to Jeffries, there had to be a better cheaper way to go. “There are green screens on thousands of desks of DES employees across the state,” said Jeffries, “and so we did a very aggressive assessment over the summer. We determined that we could rally around a SalesForce platform (the fourth largest software company in the world, and arguably the leader in cloud-based computing solutions for businesses and governments). And (by doing so), we could retire all 100 plus custom legacy systems including HEA plus… within 18 to 24 months. As a result, upon completion, over a five-year span we could save taxpayers – federal and state – upwards of $200 million. Instead, that initiative that I called “Project Quantum Leap” has been stalled to say the least.” (Jeffries shared this evening that he believes the objectives and momentum of Project Quantum Leap have been decimated.)
Harris asked Jeffries if the “fraud” has been left in place. Jeffries responded, “You know, Representative Velasquez committed fraud. I’m not alleging fraud in this multi-hundred million dollar tragedy. It’s breathtaking incompetence. It’s breathtaking negligence. It’s breathtaking ineptitude, and a tolerance of the very things taxpayers hate. Tolerance of that is beyond my comprehension. Part of my naïveté was to think that in making these things public within the government there would be rapid, radical action. But that was not the case! It is not the case now, and probably will not be the case (anytime soon).”
Harris asked Jeffries who benefited from the “tragedy.’ Jeffries responded, “Well, it is fair to say that there were more than a few IT vendors locked on the breast of government that were none too happy about the fact that their sweet deals would soon be obliterated.”