FY09_app_DHS_Appeals by panniuniu


									Return on Investment (ROI) Program Application for FY 09

Contact Information:

Date:                                        July 20, 2007
Agency Name:                                 DHS Appeals Unit
Project Name:                                DHS Appeals Process Automation
Agency Manager:                              Harry V. Rossander
Agency Manager Phone Number /
                                             515-281-5425     hrossan@dhs.state.ia.us
Executive Sponsor (Agency
                                              Kevin Concannon, DHS
Director or Designee):

Amount of Funding Requested: $250,000

Section I: Project Description:

The purpose of this document is to propose a concept for the automation of the
Department of Human Services (DHS) Appeals Process. The appeals process is a
guaranteed right to constituents who may benefit from programs and/or services operated
by the DHS by Iowa Code and Federal Statute.

Current Situation

The current process is primarily a paper-based documentation process that crosses
between several agencies, specifically: the DHS, the Department of Inspections and
Appeals (DIA), and the Attorney General (AG) for the State of Iowa. The appeals
process currently has more than 20 administrative actions (steps), each of which can
involve the addition, manipulation and transportation of paper documents. Due in some
measure to the requirements necessary within the process, it can be both exceedingly
slow and difficult to effectively monitor/manage.

The DHS Bureau of Policy Analysis & Appeals (BPAA) has experienced a significant
increase in both the volume and complexity of cases in the past several years. This
increase has led to significant challenges with providing a timely appellate process.

Examples of the increase are as follows:
        Over the past three years the Department has increased the number and
         complexity of programs with a 44% increase in appeals (4,200 in SFY 04 to
         6,050 in SFY 06).
        Over the past four years the Department has increased the number of exception
         to policy requests by 52% (1,550 in calendar year 2003 to 2363 in calendar year
           A new position was added to help improve both the timeliness and efficiency of
            the process in 2005. While this addition did provide some level of relief,
            struggle continues to keep up with the work load.

Both federal and state laws require that there be a review process of proposed appeal
decisions. Federal regulations and administrative rules require that the review be
conducted by the Director of the DHS. The Director has delegated that review function
to the Bureau of Policy Analysis and Appeals.
          Currently a Compliance Officer 1, a Compliance Officer 2 and a contracted
           position are conducting the reviews.
          Any party to the appeal can request review. Approximately 10% of cases request
          A review is a complete review of the appeal record to determine if the Findings of
           Fact are accurate and the Conclusions of Law are applied correctly. The appeal is
           also reviewed for the correct application of federal and state statute and law,
           regulations and rules. Applicable case law is also considered.
          The review position requires a broad familiarity with the Department’s programs
           and the ability to apply rules and regulations to case specific situations.
          There is a current backlog of over 125 cases that are still under review.

The Appeals Section is falling short of being able to timely process appeals with existing
staff and funding.
          In SFY 06 the Appeals Section paid out $11,282 in comp time to timely process
          Both Centers for Medicare and Medicaid (CMS) and Food and Nutrition Services
           (FNS) have cited DHS for being out of compliance for processing appeals in a
           timely manner. CMS requires that Medicaid appeals be processed in 90 days.
           FNS requires that food assistance appeals be processed within 60 days.
           Corrective action plans have been filed with both federal agencies that require
           appeals be processed timely.
          Failure to process appeals in a timely manner may result in loss of federal
           financial participation.
          Food Assistance caseloads continue to grow; child care assistance cases continues
           to increase; there is a new delivery system for child welfare and the department
           has been given a mandate to increase participation in Hawk-i and Medicaid. All
           of these program increases will result in additional appeals by both customers and

The Governor has recently announced his Healthy Opportunities Plan for Every Iowan
initiative towards obtaining affordable, quality health care for Iowa citizens. The launch
of every new initiative provides a period of time where coverage for benefits may not be
uniform and policies that may take time to be implemented uniformly and consistently.
This fact in itself can cause new and complex appeals to be raised.
The software being used to monitor/manage the process is inadequate for the task. The
Appeals section uses a home-grown application system designed to work with a
Microsoft Access database to monitor and manage the appellate process. This
application is over ten years old.

Access software is meant to be used by a single user at any given time. Due to the nature
of the work flow necessary through the appellate process, it is essential that multiple
users have access to the program simultaneously (for example: cases are being input into
the program daily, administrative law judges are reviewing cases and providing ruling,
and the Attorney General’s Office is also reviewing cases as required).

The result of multiple users simultaneously trying to use the Access database program is
that the program often “crashes” or data is corrupted and must be re-keyed into the
program. Further expansion of the Access based system would be a poor investment.

The BPAA proposes to automate the appellate process in coordination with the
appropriate members of our sister agencies and the IT professionals assigned to DHS.
This automation concept will include the introduction of new technology into the
program that would allow for:
      Development of an automated case numbering process that will allow for better
       time management of a case file through the appellate process.
      Development of process metrics that will allow for near real time analysis of
       appeals by type and time taken in the process.
      Implementation of time-discipline management into the appellate process by
       monitoring individual case files as they are completed.
      Development and implementation of an electronic file storage program by
       converting printed documentation into .pdf formatted electronic files. (Currently,
       BPAA uses more than 20 individual file cabinets to store paper documentation
       related to appeals and requested exceptions to policy.)
      Electronic transmission of case files between servicing agencies

Section II: Expected Results

BPAA anticipates that it will be able to achieve the following benefits through the
implementation of this automated approach to the appellate process:
      Meet or exceed all mandated timelines within 2 years
      Decrease the amount of time in the appellate process by 20%
      Provide instantaneous access to files and their contents electronically, across
       agencies, while substantially decreasing the need for paper retention in filing
      Promote better working relationships with our sister agencies
      Ultimately, automation of this process could also allow public access to
       appropriate data in the files.

Section III: Financial Analysis

Item                          FY 09        FY 10        FY 11        FY 12         FY 13
Budget*                       $350,000     $450,000     $600,000     $750,000      $900,000
Cases                         6,000        7,000        8,000        9,000         10,000
Staff                         7            9            12           15            20
Case Complexity, time for
                                     Increasing every year…this is not a linear change
Average Caseload / year       850          800        700           600          500
Cost of average case/year     $60          $65        $75           $85          $90
Automation efficiency          Estimate a conservative average 30% improvement based on
                                 online, real-time access to integrated documentation and
                                    decisions, and improved work flow across agencies
Cost of Automation            $200,000       $50,000        Normal DDM Application Support
Rationalized Caseload          Assume an average of 10 staff handling an average of 8,000 cases
(Handle more cases with            over a five year period, or 800 cases an individual/year.
same staff or reduce staff)
Adjusted cost of Caseload               With an average budget of $500,000 per year,
                                   the cost of a case will be reduced to about $50/case/year
Total Expenditure             $550,000       $500,000      $600,000     $750,000     $900,000
Average Expenditure Cap       $550,000       $550,000      $550,000     $550,000     $550,000
(including $50,000 for
technology expenses)
ROI : Break-even              $0             -$50,000      $50,000      $200,000      $350,000
effectively for the first
two years with an up side
3rd year onwards

* The Pooled Technology request of $250,000 is 45.45% of the FY09 budget total with the
remainder of funding from a combination of DHS budgeted funds and Federal matching funds.

Section IV: Auditable Outcome Measures

It is clear that the current business processes and supporting technology will not permit
the Agency from performing its mandate, i.e., to manage the overall appeals process
across agencies, and to be measurable and accountable.

With rising case loads, increasing complexities in assessing compliance of government
departments with policies, requirements to comply with new, announced policies and
initiatives, it puts the Agency at a significant disadvantage when it does not possess the
appropriate work flow processes and tools to support its own and cross-agency

There are opportunities in the transportation, security and timeliness of documentation
and its availability to staff across agencies that can be achieved through technology. In
addition, managed access to data is of paramount importance, especially if DHS Appeals
is to effectively manage the appeals process across all agencies.

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