No alternative to Indiana's welfare system
* No Plan B in works if state pulls plug on IBM contract.
The Associated Press
INDIANAPOLIS -- Indiana welfare officials considering canceling the state's privately run welfare system have no backup plan in place and critics say it will be hard to undo the privatization of 1,500 state case workers more than two years ago.
Anne Murphy, secretary of the Family and Social Services Administration, confirmed last week that the system led by IBM Corp. and Dallas-based Affiliated Computer Services Inc. has so many problems that Indiana could cancel the 10-year, $1.16 billion contract.
She asked IBM to submit a "corrective action plan" as part of a process that could result in cancellation of the contract if changes aren't made by the end of September.
However, Murphy told The Associated Press that her agency doesn't have a backup plan for running the welfare system that provides benefits to 1.2 million Indiana residents. Top state officials have started discussing what to do if the vendors' performance doesn't improve, but no plan has been made.
"We don't have a Plan B yet," Murphy said. "We're hopeful that they're going to make the changes and that there will be improvements."
IBM spokesman Jim Larkin said the company is working with the state to make improvements quickly.
Welfare clients, their advocates and lawmakers have harshly criticized the IBM team for lost documents, slow approvals and severed eligibility for Medicaid, food stamps and other benefits. Federal food stamp officials also have requested improvements.
Carmel attorney Scott Severns represented a 33-year-old single mother with one child in a telephone hearing on food stamp eligibility last week. The woman had submitted details on her car registration and loan to ACS months before, but the hearing officer denied her claim because she could not provide updated information, Severns said. He also is appealing the denial of the woman's Medicaid application.
Severns questioned the state's ability to cancel the IBM contract if the vendors don't improve. Case workers began leaving as early as 2005 because they thought Gov. Mitch Daniels would outsource welfare intake and FSSA turned over 1,500 remaining case workers to ACS in March 2007.
"We've kind of got a too-big-to-fail situation now," Severns said. "It's unthinkable to pull the plug because those guys run the system now. It's not as if the state can march in and say, 'All you guys work for us now.' There will have to be a workable system built as this one is dismantled. It really is a tragic error."
Daniels has repeatedly described the state welfare system as one of the worst in the country when he took office, but state Sen. Vaneta Becker of Evansville, a fellow Republican, challenged that. Managers in her home county solved constituents' problems within 24 hours, she said, even though a technology shortage meant case workers had to share phones and computers.
"It wasn't the worst system in the country," Becker said. "We had a good system in place."
She too said a big problem is too few case workers, but unlike Severns, thought it might be time to start over.
"I'm just not sure without rescinding the contract, things are ever going to get fixed," Becker said. "I just don't have much faith in the process they've set up in the first place."