The Star-Ledger

N.J. Medicaid Fiasco: Thousands Stranded Without Coverage, No Fix In Sight

The Star-Ledger — Tuesday, December 23, 2014

By Kathleen O'Brien | NJ Advance Media for NJ.com

The doctor was perfectly clear after examining Aurora Blackwell's son this fall: The boy needed to get to an emergency room for his worsening digestive problems.

Instead, Blackwell took the 4-year-old home and treated him herself — first with prune juice, then suppositories.

Why would the devoted young mother of two ignore her pediatrician's advice? Because the Burlington County woman knew that despite 10 months of phone calls, emails and letters, her family still lacked health insurance.

"I feel helpless," she'd written two months earlier in a plea to Gov. Chris Christie. "How much longer do we have to wait?"

The meltdown of the federal government's website tied to the Affordable Care Act has been well documented. But in New Jersey, something far worse was happening as the state expanded Medicaid access under Obamacare, an NJ Advance Media investigation has found.

In New Jersey, where so many are surrounded by privilege, an estimated 11,000 people are still trapped in a tangle of digital red tape and a bureaucratic maze. These families are unable to enroll in the state's Medicaid program, leaving them in limbo for months and, in some cases, almost a year. And unlike the federal government, which has solved many of its website problems, New Jersey has yet to announce any permanent solution.

The stunning computer failure at the center of New Jersey's crisis already has forced the exit of one vendor, left countless boxes stuffed with confidential enrollment data piled in the corridors of county offices and forced workers to rekey data into county computers that cannot interface directly with the state's 1980s-era main system.

"We've gone back to the Stone Age," said Ellen Vidal, president of the Communications Workers of America unit that staffs the Ocean County Board of Social Services. Her county's Medicaid backlog over the summer hovered at 4,000.

In short, New Jersey's plan to have its ambitious computer upgrade ready for the crunch of new Medicaid enrollees under Obamacare ended up "a colossal failure," said Matt Salo, executive director of the National Association of Medicaid Directors.

While officials try to unravel the mess, some of the state's most vulnerable and struggling residents are caught in limbo, hesitating even to go to the doctor, say applicants and caregivers alike.

Pregnant women skip prenatal care, keeping their fingers crossed they'll get on the insurance rolls by their due dates. Parents hope the day care center won't notice their kids are overdue for shots.

And many tell NJ Advance Media they simply have given up hope, resigned to remaining uninsured. For them, the public health safety net remains nothing more than a distant promise.

In response to the continued problems, last month state officials terminated a $118.3 million contract with Hewlett-Packard, the firm hired to develop an updated online system designed to link all public welfare programs run by the state and the counties.

The contract was to have produced a state-of-the-art system for New Jersey to process all its social service aid programs, from Medicaid to food stamps and child-care assistance. It was to have been able to communicate in real time with federal data hubs as well. An April 2013 state newsletter boasted the "cutting edge" system would be "up to the task."

Instead, a new report from the Office of the State Auditor called the project rife with "persistent delays and defects." To make matters worse, the contract lacks clauses to protect taxpayers, State Auditor Steven Eells testified last week.

That project's continued problems mean applications are handled by an antiquated mainframe computer from the 1980s — or, in the case of Medicaid, partly by hand.

In the county welfare offices, workers laboriously retype information from paper applications into older software programs. And none of those programs links directly into the centralized state system, according to a state audit.

Because of the setback, New Jersey still can't receive full application files from the federal website, HealthCare.gov, according to the U.S. Department of Health and Human Services.

Instead, New Jersey is one of only four states still relying on abbreviated federal files fraught with inaccuracies, from incomplete ZIP codes to unverified incomes. That means workers at the county welfare offices must spend additional time tracking the missing information before the person can become enrolled.

State officials, however, point to a flood of new enrollees as proof the system is functioning.

"New Jersey has successfully enrolled over 300,000 adults into the Medicaid expansion since October 2013," said Nicole Brossoie, a spokeswoman for the state Department of Human Services. "The online application for Medicaid/NJ FamilyCare is short and easy to complete."

As for Hewlett-Packard, a spokesman would say only this: "Out of respect, HP does not comment on customer relationships."

Popular program

New Jersey is one of 28 states that accepted federal money allocated by Obamacare to expand Medicaid, the public health insurance originally designed mostly for poor women and children. The income ceiling for aid was raised so a family of four earning up to $31,716 can now qualify for insurance. Adults without children are also eligible.

The expansion has been popular here. At last count, Medicaid enrollment has grown by 25 percent in the past year, bringing the state rolls to 1,666,558 — or over a sixth of the state's population.

However, when the Hewlett-Packard project failed to be completed in time for the launch of Obamacare last fall, those new applications taxed an already fragile hodge-podge of computer resources.

Staffers said Medicaid applications were separated from the old system with the intent they'd be handled by the new system, called the Consolidated Assistance Support System, or CASS.

The logjam resulted in applicants postponing medical care or simply doing without it, according to health care professionals and the applicants themselves. While hospitals and federally funded clinics are required to treat patients as if they are insured, private doctors have no such obligation.

In preparation for Medicaid's expansion, the federal government wanted states to determine eligibility in a uniform way. This required many states to adjust their computer software. The health care reform law even included money for that.

"Some states had a pretty good experience, and some states saw a colossal failure. And New Jersey was one of those states where it was a colossal failure," said Salo of the National Association of Medicaid Directors.

"When it became clear it was not going to work, the folks in New Jersey just had to pull the plug and say, 'All our hopes and dreams are out the window, so we're in contingency mode.'\0x2005"

The computer woes bedeviling the state reflect the complexity of trying to centralize several different aid programs, he said. Toss in Obamacare — which was passed in 2010, three years into New Jersey's contract to upgrade its system — and the failure to be ready in time was almost inevitable, he said.

"It's totally not a political thing. There was just a gross underestimation of how long it would take," he said.

Squeaky wheels get attention

At county welfare offices, confidential paper applications have been stored wherever there is room. In Essex County, that could be in a hallway or atop a radiator.

"You literally walk through a maze of boxes and boxes. Try finding a case," said Tatiana Horton, on the staff of the Essex County Board of Social Services. "It's a fire hazard."

Or they could be stashed under the desk of a worker whose best intention to get to them "some day" never quite happens, said Vidal, of the Ocean County office.

That makes it almost impossible to know the actual size of the backlog, she said. "The only way to get a number is to go county by county and look under every worker's desk," Vidal said.

At an advisory council meeting in early October, Valerie Harr, director of the state Division of Medical Assistance and Health Services, indicated the backlog at the county welfare offices was nearly 20,000 cases, with not all counties reporting, according to participants.

As of the end of October, the backlog reported by the counties was 11,000, according to the department spokeswoman. A request to interview Harr was declined.

Some of those unprocessed applications may be duplicates, as frustrated people who never hear back reapply, said Maura Collinsgru, a health policy advocate with New Jersey Citizen Action. People may apply for Medicaid year-round, not just during the "open enrollment" period.

"So we're growing our own backlog," she said. Her group believes the size of the backlog remains "significant."

Given the chaos, only the most persistent — or savvy — applicants get immediate attention, Horton said.

"Honestly, it's whoever complains the most. When you get a call from Joe D.'s office, or some politician's, that's the application that gets handled," she said with a shrug, using the nickname of Essex County Executive Joseph DiVincenzo.

DiVincenzo confirmed his office helps constituents with their cases. Medicaid expansion created an "incredible" increase in the number of applications, he said, adding, "We will continue to work to remediate the problem."

Others wait in long lines — no matter the weather — to get their cases unraveled. They push strollers, shush toddlers or quietly fiddle with their cellphones to pass the time. When it's cold, they stomp their feet to stay warm. When it's raining, they try to avoid getting accidentally poked in the face by the umbrella in front of them.

In Monmouth County, where the backlog of unprocessed applications is estimated between 1,000 and 1,500, the roster of appointments is filled every day by about 10:30 or 11 a.m., said Billy Dangler, a worker and official with the CWA local there.

By mid-morning, workers start handing out appointments for the following day, "because otherwise they'd be there until 7 or 8 o'clock," he said.

Problems online

Applying online also carries its own pitfalls.

Convent Station resident Gareth Rees has tried all year to get coverage for his four grandchildren — yet has mostly failed. His son, a small-business owner, was able to purchase subsidized private insurance for himself and his wife through the Obamacare website. Their children were deemed eligible for NJ FamilyCare, the name of New Jersey's Medicaid program.

However, only one grandson received his insurance card. The other three — including a grandson who needs $3,000 to $4,000 of medication annually — inexplicably have not.

Rees complained to the offices of both of New Jersey's U.S. senators, but said he never heard from either.

When he next tried to buy private insurance for them himself — think of it as "GrampaCare" — he was turned down because he didn't have authorization from the state.

Having been warned against submitting a duplicate NJ FamilyCare application, he was suddenly told to do that immediately. This time, however, he plans to avoid the website entirely and do it by paper, using registered mail as an added safeguard.

Not only have the children gone uninsured, but when their parents file their taxes this spring, they'll likely incur a penalty for violating the ACA law requirement that everyone get insurance.

To give itself some breathing room, New Jersey joined the ranks of 35 other states that received Washington's permission to stop checking to see if clients who already have Medicaid are still eligible.

These annual "recertifications" are normally required to make sure someone hasn't had a boost in income that would make them ineligible for free health insurance.

State workers worry the waiver to put off recertifications is only creating another future backlog.

Federal officials have chastised other states for amassing large Medicaid backlogs. California, Kansas, Michigan, Missouri, Tennessee and Alaska received letters over the summer requesting they submit plans to move the stalled applications through their systems.

But New Jersey hasn't received such a letter and probably won't. While the U.S. Department of Health and Human Services has been aware of the state's computer problems, a spokeswoman called the state "extremely open to suggestions and cooperative in adopting mitigation strategies." "As such, we consider the state's program to be operational, albeit with a number of manual workarounds, and therefore determined that a formal letter was not needed," said the spokeswoman.

"The feds kind of recognize New Jersey is doing the best it can out of a bad situation," said Salo, of the Medicaid directors' association. "At this point, sending them a 'nasty-gram' would just be piling on."

The computer failure affects other aid programs besides Medicaid. New Jersey recently ranked 52nd out of 53 jurisdictions for its handling of food stamps, according to a U.S. Department of Agriculture official's letter to the state, and was threatened with the loss of federal funds because of those delays.

As a result, however, workers were directed to tackle the food stamp application pile. That just took time away from handling the Medicaid backlog, workers reported.

In the meantime, applicants waited.

The Blackwells, Aurora and Jonathan, applied for Obamacare policies last January. The two 29-year-olds had been building a nice life for themselves and their two boys in Cinnaminson — he as a firefighter with full benefits, she as a day care worker — when he was laid off.

At first, the parents were told they didn't qualify for Medicaid because of Jonathan's unemployment insurance, but the boys would be covered. When no letter of eligibility arrived by March, however, she checked back and learned it had been sent, but lost in the mail. She was told to reapply. She did, in time to meet the national deadline for getting insured.

In May, when she checked again, she said she was told that second application had been "lost." Again, she was told to reapply — her third application to an already overwhelmed system.

With summer ending and her boys way behind on the shots they'd need to attend preschool and day care, she took them to a clinic in Pemberton where the three of them waited four hours, but did get their overdue shots — nine in all. Payment was on a sliding scale.

By mid-September, fed up, she wrote Gov. Chris Christie about the run-around she was getting. "Let's see if the Big Guy actually listens to the small guy," she recalls thinking.

Then, in mid-October, came her older son's illness. When her home remedies failed, she took him to the emergency room, where he was treated without having to be admitted. The bill: $4,345, which they cannot pay.

That ER visit should be covered retroactively by NJ FamilyCare — which finally sent her the boys' insurance cards in November — but she hasn't received anything in writing to that effect.

And as the cap on a long year of fighting red tape, in early November she received a letter from the Burlington County Board of Social Services denying Medicaid to her and her husband. It was a response to their second application, the one filed in March.

"Really? March?" she asked, her voice a mixture of incredulity and weariness. "It just makes me laugh."

This article was undertaken as a project for the National Health Journalism Fellowship program of the University of Southern California's Annenberg School of Journalism.

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