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 firstname.lastname@example.org E-Mail: 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 2006). 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 review. 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 appeals. 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 providers. 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. Proposal 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 cabinets 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 resolution 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 operations. 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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