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Medicaid enrollment problems plague N.J.

Low staffing and an obsolete computer system are creating a backlog for some of the state's most vulnerable citizens.

Since New Jersey expanded Medicaid under the Affordable Care Act, its efforts to enroll thousands of low-income residents have been hampered by low staffing and antiquated technology.

Gov. Christie championed the expansion, and, indeed, 300,000 New Jersey adults have enrolled in Medicaid, the federal program for the poor and disabled, since President Obama's health-care law took effect in October 2013.

Many gained coverage directly through online state and federal portals. Yet an estimated 11,000 others, whom experts describe as some of the state's most vulnerable citizens, have received no response to their applications.

Lacking technical expertise or language skills needed to apply online, this population turns to New Jersey's 21 county welfare agencies for help. But the counties are limited in staff and stymied by a computer network the state had intended to replace by now.

"The backlog really is creating a mess and havoc with people's lives," said Assemblywoman Valerie Vainieri Huttle (D., Bergen), who recently chaired a hearing on the matter.

The state recently terminated its contract with Hewlett-Packard to implement a new system, leaving completion of the project uncertain, and potentially exposing state taxpayers to a federal penalty.

Backlogs haven't been limited to New Jersey, but most states are doing better, said a spokesman for the federal Centers for Medicare and Medicaid Services.

"Most states that we reached out to recently," said the spokesman, Aaron Albright, "have cleared their backlog or have substantially reduced their backlog and are on a path to ensure timely enrollment."

Overall, 1.6 million New Jerseyans are enrolled in NJ FamilyCare, which includes Medicaid and the Children's Health Insurance Program.

To be eligible, a family of four can earn up to $31,721 annually, or 133 percent of the federal poverty level.

New Jersey's Medicaid management issues come as the federal government also has sharply criticized the state's administration of the Supplemental Nutrition Assistance Program, or SNAP, commonly known as food stamps.

As with Medicaid, counties also process food-stamp applications. Currently, the state computer systems aren't linked to the county welfare agencies, making it difficult to track benefit applications.

The state says it has made progress reducing the time to process SNAP applications.

In 2009, the state contracted with HP to replace computer systems used for eligibility and enrollment for public assistance and Medicaid programs.

Building a new eligibility and enrollment system "has been and continues to be characterized by persistent delays and defects," said a state audit released this month, citing a quality assurance contractor's report.

Initially scheduled to be completed in July 2014, the project has a new deadline, April 2016 - but, the audit said, it is "not on track to be completed within scope, schedule, or budget."

The auditor, Stephen M. Eells, told lawmakers this month the state Department of Human Services had failed to notify the Treasury Department about red flags raised by the contractor hired to monitor HP's performance. Problems included missed deadlines, managers' poor credentials, and high turnover, he said.

The state's demands also changed over time, he said, especially to account for the Affordable Care Act.

Though the federal government is funding 90 percent of the project, it could require the state to repay 50 percent of that money if New Jersey doesn't complete the project, Helen Dublas of the Legislature's Office of the State Auditor told lawmakers.

The audit said total costs were approaching $227 million, up from an initial projection of $190 million.

A Department of Human Services spokeswoman declined to comment on the project, saying the "state's termination agreement with HP has not been finalized."

HP spokesman William Ritz said, "Client needs sometimes change over time, and HP understands that and appreciates the opportunity to have served the residents of New Jersey."

The state was counting on this new eligibility system in anticipation of the health-care law's rollout, said Raymond Castro, senior policy analyst with New Jersey Policy Perspective, a think tank.

"They put all their eggs in that basket," he said. "When that didn't happen, we had the worst of all possible worlds."

Shawn Sheekey, director of the Camden County Board of Social Services, said, "We've all had to work around" the computer problems.

"We knew there was going to be an onslaught" of Medicaid applications, Sheekey said, but staffing levels remained the same.

His office once had a backlog of 8,000 applicants, but that's now down to 2,200.

"We're much better off than we were when it all started," he said.

In Gloucester County, the workload associated with Medicaid applications has tripled since the state expanded the program, said Ed Smith, superintendent of the county division of social services.

For the week ended Dec. 19, Smith said, the county had 427 pending Medicaid cases, 51 of which were older than 45 days. Many of the older cases, however, are likely to be denied because of income ineligibility, he said.

The burden presented by the increase doesn't end with processing applications: Counties are required to reevaluate Medicaid eligibility yearly, Smith said.

"When you have to go from reevaluating [a total of] 7,000 to 29,000, that's a big jump," he said. "It's new territory for us."

In Essex County, confidential paper applications are stored in hallways and atop radiators, reported last week in an extensive article on the Medicaid problem.

States like New York and Kentucky have taken steps to streamline the Medicaid application process by integrating eligibility determinations into state-government-run exchanges, said Stan Dorn, a senior fellow at the Urban Institute, a Washington think tank. He said New York also shifted some responsibilities from counties to the state.

Other states have struggled to modernize their social services offices. "This is a really hard transition to make," Dorn said.

In Maryland, state officials blamed IBM software for lost applications. IBM said the state contributed to the problem, according to a report in the Baltimore Sun.

In Minnesota, processing the influx of applications - both on paper and through a new electronic system - has been "a flipping nightmare," said Paul Fleissner, chairman of the executive committee of the National Council of Local Service Administrators and director of a county social services agency in Minnesota.

"We don't have a functional system right now."