Kansas Eligibility Enforcement System

Topeka ? A new computer system that was supposed to make it easier for people to apply for Medicaid and other social services for the poor and disabled is more than two years past due and at least $46 million over budget, according to a recent Legislative Post Audit report.

In addition, the report said, even when the new system comes fully online, the Kansas Eligibility Enforcement System, or KEES, still won’t perform as originally intended, and it is no longer expected to produce the savings in operational costs that were originally projected.

“We’re so far behind, I’m worried it’ll be obsolete by the time we get it running,” said Sen. Laura Kelly, D-Topeka, who serves on the Post Audit Committee that received the report.

As originally planned, KEES was supposed to replace an old “legacy” computer system that was more than 20 years old and required applicants to fill out forms by hand and mail them to the state.

The new system was supposed to be an “integrated” process that would allow people to fill out a single application online, and that would be used to determine eligibility for Medicaid, food stamps, cash assistance and other social services.

According to the Post Audit report, the original price tag was estimated at $138 million to build and $50 million to maintain for five years. It was supposed to take about two years to complete and be ready to go live by May 2014.

The state hired a private contractor, Accenture LLC, to build the system.

As of November 2015, however, only part of the system had gone live: the Medicaid eligibility system and some case maintenance activities, according to the Kansas Department of Health and Environment. But other functions, such as social services eligibility, are now being built into a separate system, and they’re not expected to come online until mid-2016.

“Initially it was supposed to be a one-stop shop,” Kelly said. “The fact that they have disconnected those things is disconcerting. Maybe there are some technological reasons for it. But from the outside, it just looks like a way to make it more difficult for people to access benefits they are entitled to.”

Auditors noted that the KEES project ran into several difficulties, starting with the fact that it involves coordinating with multiple federal and state agencies: the Department of Agriculture and Department of Health and Human Services on the federal side; and KDHE and the Department for Children and Families at the state.

And while the system was being designed, auditors said, a number of state and federal regulations on eligibility were changed, including regulations stemming from the federal Affordable Care Act.

“There was also a need to implement more than $8 million of changes to be compliant with new ACA rules and laws, new CMS mandates and other new regulations,” said KDHE spokeswoman Sara Belfry.

But KDHE officials also told auditors that KEES’ software had to be modified to account for state policy changes, some of which resulted from Gov. Sam Brownback’s executive order moving eligibility screening functions for Medicaid and other social services from the Department for Children and Families to KDHE.

For its part, KDHE, the lead state agency involved in the project, disputes that there were significant cost overruns. Although the original project estimate was about $188 million, the contract signed with Accenture was estimated at $234 million.

“KEES was expected to cost $234 million and by August 2016, $234 million will be spent,” Belfry said.

Of that, roughly 85 percent of the cost to build the system, and 75 percent of the maintenance costs, come from federal funds. The remainder is being paid out of state funds.

As originally planned, KEES was supposed to produce substantial savings for the state by automating many of the steps in determining whether a person or family is eligible for services, thus reducing the need for staff increases, reducing fraud and avoiding federal penalties.

But the auditors said most of those projected savings were overstated to begin with, and it’s unlikely the state will actually realize most of them.

Chief among those is the $134 million officials expected to save over 10 years by avoiding federal penalties, most associated with Temporary Assistance to Needy Families, or TANF, which provides cash assistance to low-income families with dependent children.

Auditors said they were unable to determine how the Department for Children and Families came up with that estimate, and they could only find records of the state having paid one TANF penalty in recent years, a penalty for $300,000.

Auditors also questioned estimates that DCF and KDHE would save a combined $2.6 million per year in postage and office supplies associated with processing paper applications. They noted that the two agencies combined only spend about $3.1 million a year in such costs.

State officials also had projected KEES would save $21 million in additional staffing costs related to the expansion of Medicaid under the Affordable Care Act. But because the state has so far chosen not to expand Medicaid, auditors said, there is no way for KEES to produce those savings.