Failures Of AZDES System HEA Plus Leads To $142 Million Wasted Taxpayer Funds

On February 15, 2017 Tim Jeffries, the former director of the Arizona Department of Economic Security (DES) revealed that the current computer software program used by DES and the Arizona Health Care Cost Containment System (AHCCCS) is a failed and unsustainable system. Jeffries added the software development vendor should be terminated and investigated.

In an appearance on the James T. Harris radio show on 104.1 FM, Jeffries explained some of the failures of the system known as HEA 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 in our offices across the state handle eligibility processing for all three Federal programs.” Jeffries continued by stating “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 previously reported, the HEA Plus system, built by SIS, LLC (DBA Center To Promote Healthcare Access Inc), had a faulty and unsustainable software code foundation according to DES insiders and outsiders. According to sources, the faulty software code foundation is of such poor quality there is no practical way to shore it up, or save it. The system is not scalable nor sustainable. As a result, multiple reports show the cracks of that failed foundation through which Arizona’s neediest residents haven fall periodically.

The ADI has been speaking to various sources since this scandal was first revealed. ADI has also issued a slew of public records request to various State entities get to the bottom of this unfolding multi-year, multi-million dollar scandal.

While the ADI waits for the information any Arizonan is entitled to by law, ADI extensively researched the taxpayer funds already expended with the failed software development vendor, SIS, LLC.

Former Director Jeffries revealed that $102 million in taxpayer funds had been expended as of last summer, to date an astounding and egregious $142 million in taxpayer funds have been wasted. This does not include the approximately $100 million in state time and resources that have been invested in the failed software system.

The ADI recently acquired the HEA+ Technical Assessment Executive Summary prepared by Sogeti USA, LLC at the request of the Governor’s Administration. The $550,000 study took several months. It was recently presented to the senior Governor’s team, including Henry Darwin (governor’s chief operations office), Tom Betlach (agency director of Arizona’s Medicaid Program) and senior members of the Arizona Department of Administration.

Among many things, the Sogeti study had this to say about the software system that has costs Federal and State taxpayers close to $250,000,000 in time, materials and effort.


“The existing HEAplus application carries a heavy burden of technical debt.

  • Older technologies, frameworks, and design models which are difficult or impossible to update or remediate
    • Non-scalable
  • Missed opportunities to use modern, more efficient tools
    • g., embedded business rules rather than a business rules engine
  • Process models are not modern and scalable.
    • g., Business requirements intake is hand-managed
  • Production deployment is complex and error-prone.

“’…technical debt is what you feel the next time you want to make change. It accrues from not only all the shortcuts you make in a project when it’s rushed, but even every time the developers don’t write on automated test – every time that you don’t do data code analysis. When you skip these things, the debt builds up every day.’ – Gene Kim, author of The DevOps Cookbook

FINDINGS (technology)

  • The application uses outdated technologies that are costly to maintain

“’Older technology doesn’t have the ability to function and adapt in the same way that new technologies can. […] Additionally, older systems are often not built to provide scalability. This dramatically limits the performance that even an optimized older IT system can provide should your business requirements change.’ – Alliey Collar, Orion Technology

FINDINGS (static code analysis)

  • The application health is below standards in many areas

“’Static code analysis looks for patterns, defined as rules, which can cause security vulnerability or other code quality problems, necessary for production quality code.’ – Jared Paul,

FINDINGS (manual review)

  • The HEAplus application is monolithic, large and complex
    • Feature development and maintenance are more complex and costly
  • Important business logic is distributed between presentation, services, and database layers
    • A simply regulatory change may require changing interacting code in multiple (software code) layers
  • Documentation of the code is lacking
    • Understanding of the code functioning is maintained as ‘tribal knowledge’
  • Modern presentation layer technologies are not supportable
    • Ability to add support for new platforms (e.g. smartphones) is difficult

“Scaling such a monolithic application can only be accomplished by deploying the same EAR/WAR packages in more servers – also known as horizontal scaling. Each copy of the application in various servers will utilize the same amount of underlying resources, which is often not an efficient way to design.” – Vineet Badola, Cloud Developer

Even if a reader is not a technologist or technically savvy, the aforementioned outlines what Federal and State taxpayers have now thanks to a quarter of a billion in expended funds. It is a scandal of the highest (or is the lowest) order, particularly because the Governor’s Office is trying to cover this up, including Director Betlach’s support for the failed vendor.

Sources told the ADI that former officials at the Arizona Department of Economic Security (DES) became so concerned about the excessive expenditures, the poor results, lack of accountability, and defense of the vendor by AHCCCS officials, that they turned over an investigation into malfeasance to the Arizona Attorney General’s Office.

Many believe that this is starting to look like a cover up.

About M. Perez - ADI Staff Reporter 362 Articles
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