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GG 12
Use Call Centers to Determine Eligibility for Children’s Medicaid; Consider an Internet-based, Combined Application for Human Services Programs


Texas has the opportunity to increase Medicaid administrative efficiency by expanding the use of call centers to include Children’s Medicaid. The state currently operates a call center for the Children’s Health Insurance Program and successfully operates call centers to process applications for other state programs. A Texas Department of Human Services Children’s Medicaid call center pilot project in Houston has more than doubled the efficiency of determining eligibility compared with the current application process. Pennsylvania, California and Arizona also give Medicaid and CHIP providers an efficient way of processing applications through the Internet, and Pennsylvania provides an Internet combined application for several welfare and medical programs. Applicants and service providers can access call centers and Internet-based systems 24 hours per day from a home, school, library, health provider or other community center. Texas should expand the Children’s Medicaid call center pilot projects statewide to increase administrative efficiency and customer satisfaction as well as to save money and should consider an Internet-based combined application for human services programs.


Texas is currently redesigning its eligibility system through the Texas Department of Human Services (DHS) Texas Integrated Eligibility Redesign System (TIERS) project. The project will replace several outdated automated systems with one state-of-the-art integrated system and will improve eligibility determination accuracy and service delivery.[1] Because TIERS simplifies and improves the process of determining eligibility, it lends itself to the expanded use of call centers and Internet technology, since they depend on a foundation of streamlined automated systems and processes for efficient implementation. The combination of state-of-the art automated systems, call centers and Internet technology create additional administrative efficiencies and further improve customer service.

Call centers provide services or information by telephone, instead of requiring customers to make requests by mail or in person. Call centers achieve administrative efficiencies in several ways. First, call centers reduce time lost from entering data off of paper applications, scheduling appointments, waiting for missed appointments or late arrivals and escorting clients between waiting rooms and offices. Second, call centers reduce errors that occur from entering data from paper applications. Third, call centers reduce building space requirements since customers do not visit call centers, and call centers reduce paper storage and mailing requirements. Fourth, call centers mean lower staffing costs since call center staff require less education and training. Automated systems provide menus of questions and much of the analysis previously performed by staff in a face-to-face interview process.

Call centers also improve customer satisfaction by saving time, trouble and money. Customers do not have to schedule and remember to keep appointments, arrange child-care or transportation, miss work, travel to and from appointments or fill out forms that can be confusing or raise unanswered questions. The availability of call centers in the evening and on weekends increases customer satisfaction. Customers do not have to wait as long to learn if they meet eligibility requirements and can fax required documentation for same-day verification. Call centers increase customer assistance and satisfaction even more for rural and disabled customers and for clients who speak a foreign language. Call centers generally hire enough bilingual staff to accommodate the most common languages, such as Spanish or Vietnamese, and use a third-party intermediary for less common languages.

The success of the Children’s Health Insurance Program (CHIP) in enrolling uninsured children has generated concern in the past about a potential increase in Medicaid and other program caseloads if the state used call centers for Children’s Medicaid. Unlike the CHIP program call center, which televises its toll-free hotline statewide, the call center pilot projects for Children’s Medicaid do not advertise their telephone numbers. Instead, applicants contact the call centers through their local offices, the same practice that applicants use to apply for the program in areas where the agency does not operate call center pilot projects.

A review of caseload changes in each region of the state from January 2002, when the call center pilot project began, to June 2002, did not find a correlation between the pilot projects and caseload changes.[2] DHS does not anticipate any increase in caseloads because of expanding call centers for Children’s Medicaid statewide.[3]

Texas call centers

DHS currently has three pilot projects for Children’s Medicaid eligibility call centers in Houston, El Paso and San Antonio. All three projects have increased operations efficiency, improved customer service and reduced staff turnover. The Houston project almost tripled the number of applications it processed per full-time equivalent employee (FTE) and more than doubled the number of reviews it completed per FTE during a three-month period.[4] This result indicates that call centers can significantly reduce the number of FTEs necessary to process the same number of applications. The office achieved these administrative improvements despite relying on outdated equipment and limited space efficiencies. The project office processes Children’s Medicaid applications for Harris and Brazoria County offices and despite initial estimates that the project would take more than a year to complete, it actually took only two months to design, test and implement for the state’s largest urban area.[5] The department also has successfully initiated several call centers for case changes, such as client address, telephone number and other changes that clients must report.

The state, through the Texas Health and Human Services Commission (HHSC), also operates a call center for CHIP eligibility determination through a contract with ACS, a government services consulting company. HHSC pays $17 to $21 per completed CHIP application.[6] The call center staff currently process about 130,000 calls per month. The center has received about one million applications between April 2000 and May 2002, referred about 400,000 applicants to DHS for Children’s Medicaid eligibility determination and maintained a caseload of nearly 500,000 children. During the call center’s two-year history, staff have processed more than 3 million phone calls and as many as 220,000 calls in a month.[7]

The Texas Department of Health operates two call centers through contracts with MAXIMUS, a government services consulting company. The call center for Texas Health Steps, a program to provide preventative health and dental services to children on Medicaid, provides outreach services and information to clients, assists with setting medical and dental appointments and medical transportation and follows through on outcomes.[8] This fiscal year, an average of about 49 call center staff will initiate or answer about 60,000 calls per month.[9] The other call center provides Medicaid managed care enrollment benefits information. Since the same contractor operates both centers, the agency benefits from the additional efficiencies of sharing backup availability and administrative costs between the centers.[10]

Texas, through the Texas Department of Protective and Regulatory Services (TDPRS), has successfully operated a call center hotline for child abuse and neglect for many years. [11] The state owns the technology for this call center, which makes the process of updating the equipment more cumbersome than other arrangements. Outsourcing, buying the equipment with built-in upgrades, maintenance contracts or assured periodic upgrades as purchased add-ons are all better alternatives to simply owning the equipment and software outright. The challenge facing TDPRS and other government call centers is the need to stay current with technological advances in the most cost efficient manner possible. The problem of owning increasingly older equipment and software, despite the best efforts of highly qualified and dedicated TDPRS staff, will likely result in decreasing comparative efficiencies of this call center with others the state operates in future years.

The Texas Workforce Commission (TWC) has successfully operated call centers for all Unemployment Insurance (UI) initial claim, weekly claim and eligibility determination processing since May 1999. Before the state changed to centralized call center facilities, clients seeking to file for UI had to travel to one of more than 120 local offices, fill out paper forms and often wait in long lines to see a customer service representative. Now, customers only need access to a telephone and can file their UI initial claim via an automated call center system that routes their calls to the next available customer service representative in one of seven call centers.[12] Call center representatives use the same telephone system to place outbound calls to claimants and employers to gather additional information as part of the eligibility determination process. Once TWC determines clients are eligible, virtually all clients file all UI weekly claims via an interactive voice response (IVR) system with backup, when necessary, from call center operators. Claimants also use the system’s IVR features to access claim information, determine claim status and check on payment status. TWC owns the call center equipment, which includes a five-year renewable maintenance contract that provides, at no cost, for telephone system software upgrades and any hardware upgrades that the software upgrade may require.[13]

The agency accomplished a smooth transition from local and regional employment service offices to the UI call centers by comprehensively planning and by informing staff of all changes well in advance. The early planning and open communication provided opportunities to use natural attrition, early retirement, transfer opportunities within and among state agencies and a transition package that buffered adverse effects on staff from moving to call centers. Customer surveys indicate a much higher level of customer satisfaction with call center claims filing as compared with the previous face-to-face filing requirement. The call center has provided the agency with higher quality and more consistent customer service to claimants and to employers and has increased operating efficiencies in the UI program.[14]

Internet-based applications

In addition to call centers, Internet-based applications can also improve efficiency, convenience and customer service to the eligibility determination process. In the last two years, California and Pennsylvania have implemented complete Internet-based application and eligibility systems for Children’s Medicaid and CHIP. Many other states, including Texas, provide applications online, but applicants must print them out and mail or fax them to the agency. Internet-based systems transmit information directly through the Internet to the state’s eligibility database where the agency staff can retrieve the information to determine eligibility.

Applicants can access the application directly or with help from a service provider through the state’s Internet portal and apply for the programs from their homes, schools, local workforce centers or libraries and from health care clinics, housing authorities or community centers. The applicant’s response to questions determines the next question that appears on the screen, so that the applicant only answers questions relative to the requested programs and to the applicant’s unique household and financial situation. Screens are user-friendly and have mostly yes or no questions.

Internet applications in other states

The California combined application for CHIP and Children’s Medicaid, which only providers can complete, has an electronic signature feature that can enable same-day eligibility determination. The Pennsylvania application has a signature page that the applicant can print out and fax or mail to the agency. In addition to CHIP and the Children’s Medicaid program, Pennsylvania’s site includes Temporary Assistance for Needy Families (TANF), Food Stamps and other health and human service programs in its combined application. Some of these programs require face-to-face review, finger imaging or work force orientation before final approval, but electronic submission can reduce errors and save time that a worker takes to enter the information by hand into a computer. For the applicant, it means one less trip to an assistance office and less time at the office waiting for assistance. Combined Internet-based applications for CHIP and Children’s Medicaid generally take about 15 minutes for the customer to complete.

Pennsylvania highlights its Internet system, COMPASS, at the top of its list of citizen services accessed through its state portal.[15] Although individuals also access the system, Pennsylvania developed the Internet application primarily for providers who assist many applicants in completing their forms. Since October 2000, when Pennsylvania implemented the Internet system, the state has processed several thousand applications. Providers and advocates both like the system, but would like to see more programs added. The agency has not experienced any increase in caseloads because of the change but has noted increased administrative efficiencies and reduced errors since state agency workers do not have to input the information into the database. [16]

Enrollment providers in California express a high level of customer satisfaction with the Health-e App, the state’s combined Children’s Medicaid and CHIP application, especially since the applicant and provider can usually determine more quickly if an applicant is eligible, sometimes the same day, instead of waiting days or weeks. California’s caseload increased, but it initiated its Internet application in conjunction with a major statewide public awareness campaign directed at signing uninsured children, so it cannot determine how much of the increase is directly attributable to the introduction of the Internet application.[17]

Arizona is in the process of adapting the California Health-e App to its state’s programs. The pilot areas have reported positive results concerning administrative efficiencies and both provider and client satisfaction with the application.[18]


A. The Texas Department of Human Services (DHS) should use call centers to determine eligibility for Children’s Medicaid statewide.

This recommendation would reduce the cost of processing a Children’s Medicaid application from $188 per application to less than $20 per application. The agency should incorporate necessary changes to the TIERS system before implementation and should coordinate with the CHIP program in developing its call centers. The agency should phase in a maximum of four call centers during a two-month period at the start of fiscal 2004. This recommendation could be implemented by the agency or through a contract. Another issue in this section recommends moving eligibility determination for Children’s Medicaid and other programs to the Health and Human Services Commission.

B. The Appropriations bill should ensure that DHS has approval to acquire capital budget items associated with Recommendation A, not to exceed $4.7 million for the biennium, that are in addition to other appropriated capital items or that exceed any cap otherwise associated with the department’s appropriated capital budget.

This recommendation would be contingent on the implementation of Recommendation A by the agency, instead of by contract. The department would include these additional items in all required reports related to capital budget expenditures and authority.

C. DHS should develop a transition plan that would ensure a smooth transition to call centers for staff and customers.

The plan should provide for staff reduction that would maximize the use of natural attrition, transfers within the agency and among state agencies and early retirement to reduce disruption of employment for state employees. If applicable, the plan should include provisions for a benefits package that would buffer staff transition from state employment to private employment. The plan should include measures to ensure that customers do not suffer a disruption of services.

D. DHS should examine the feasibility, in conjunction with TexasOnline, of implementing an Internet-based combined application for human services programs, such as Medicaid, CHIP, TANF and Food Stamps.

The agency should consult with Pennsylvania, California, Arizona and other states that have implemented Internet-based combined applications. The fiscal estimate should include implementation and ongoing costs, potential savings and costs associated with any projected caseload effects or spillover effects into other programs that may result from implementing an Internet-based combined application. The agency should report the plan to the appropriate legislative committees by April 1, 2004.

Fiscal Impact

The fiscal estimate calculates a net savings of $6.1 million in fiscal 2004 and $14.6 million in fiscal 2005 and thereafter in General Revenue from call center implementation. Call centers would also save the same amount in federal funds. These amounts could change if certain factors affecting the estimate, such as agency attrition rates, change in the future. The savings result from a 13.4 percent reduction in administrative costs for fiscal 2004 and a 34.3 percent reduction in fiscal 2005 for the Children’s Medicaid program at TDHS. The savings include a total FTE reduction of 562.3 in fiscal 2004 and 549.5 in fiscal 2005 and beyond.

The estimate assumes the DHS fiscal 2004-05 caseload forecast for Texas Works used in the DHS Legislative Appropriation Request baseline. It assumes a Children’s Medicaid funding and FTE share of the DHS Texas Works baseline appropriation request of 22.4 percent for fiscal 2004 and 23.3 percent for fiscal 2005. Texas Works also includes TANF and Food Stamps. Higher Children’s Medicaid caseloads in fiscal 2004 and fiscal 2005 relative to other Texas Works programs result in a higher percentage of workload and costs for Children’s Medicaid in fiscal 2005.

The estimate includes a call center cost of $27.9 million in fiscal 2004 and $29.3 million in fiscal 2005 and beyond. It assumes a one-time, two-month phase-in of call center staff at a cost of $3.3 million in fiscal 2004. It assumes a call center staff and salary blend of 85 percent worker to 15 percent administrative technician in fiscal 2004 and 60 percent to 40 percent, respectively, in fiscal 2005. The estimate includes $9.7 million for fiscal 2004 and $10.4 million for fiscal 2005 and thereafter for costs from walk-in applications at local DHS offices. Call center costs include the appropriate per capita for travel, overhead and related cost pools.

Recommendation C assumes an additional cost of $6.9 million in fiscal 2004 for staffing reduction based on natural attrition, pegged at the fiscal 2002 regional attrition rate.

Capital outlay includes one-time and recurring costs of $3.2 million in fiscal 2004 and recurring costs of $1.5 million in fiscal 2005 and thereafter. The estimate bases the long-term lease cost of $2.4 million in fiscal 2004 and $1.2 million in fiscal 2005 on regional occupancy per capita.

The estimate includes costs for examining the feasibility of implementing an Internet-based combined application for human services programs.

To achieve the savings in the table below, the appropriations of general revenue for the Texas Department of Human Services (TDHS) should be reduced by $3,833,000 in fiscal 2004 and $11,069,000 in fiscal 2005. The appropriations of general revenue for the Texas Comptroller of Public Accounts for FICA benefits should be reduced by $609,000 in fiscal 2004 and $961,000 in fiscal 2005. The appropriations of general revenue for the Employees Retirement System for retirement and insurance should be reduced by $1,641,000 in fiscal 2004 and $2,592,000 in fiscal 2005. The appropriation of Federal Funds for TDHS should be reduced by $6,083,000 in fiscal 2004 and by $14,622,000 in fiscal 2005. These amounts include the federal match for benefits.

Fiscal Year Savings to General Revenue Savings to Federal Funds Change in FTEs
2004 $6,083,000 $6,083,000 -562.3
2005 $14,622,000 $14,622,000 -549.5
2006 $14,622,000 $14,622,000 -549.5
2007 $14,622,000 $14,622,000 -549.5
2008 $14,622,000 $14,622,000 -549.5


[1]Texas Department of Human Services, “Texas Integrated Eligibility Redesign System,” (Last visited October 14, 2002.)

[2]Comptroller staff analysis of caseload changes in Texas Works programs from January 2002 to June 2002 found increases in Texas Works Medicaid and Food Stamps in all regions and declines in TANF caseloads in all regions. Texas Works caseload increases were highest in the Arlington region, which does not operate a pilot project for call centers in Children’s Medicaid. Caseload increases were below the state average in El Paso and San Antonio, two of the three regions that operate call centers, and higher in Houston, which operates a call center. Food Stamp caseload increases were highest in regions that did not operate a call center, such as Arlington, Austin and Lubbock. Increases in regions with call center pilot projects were below the state average and had some of the lowest increases in the state.

[3]Email from Robert W. Halfmann, Chief Financial Officer, Texas Department of Human Services, October 10, 2002.

[4]Texas Department of Human Services, “Production Totals Jan-02 – Apr-02,” Houston, Texas, June 2002. (Chart.)

[5]Texas Department of Human Services, “Region 6: Central Children’s Medicaid Office: A New Star for Texas Families!” Houston, Texas, June 5, 2002, (Presentation handout.); and Texas Department of Human Services, “Houston Region Children’s Medicaid Pilot,” (Last visited October 14, 2002.)

[6]Health and Human Services Commission, “CHIP Administrative Fees and Activities,” Austin, Texas, March 7, 2002. (Table.)

[7]Interview with Gayle Gardner, director, Call Center TexCare Partnership, ACS, June 19, 2002. (The Texas Health and Human Services Commission contracts with ACS to manage eligibility determination for the Children’s Health Insurance Program (CHIP) through their call center.)

[8]Interview with Melinda Metteaurer, vice president, Health Management Services, MAXIMUS, June 19, 2002. (The Texas Department of Health contracts with MAXIMUS for the Texas Health Steps and the Texas Star and Star Plus Programs call center operations. The Texas Health Steps call center provides outreach services involving information and reminders for clients who are behind schedule on their Texas Health Steps appointments, assistance with arranging medical, dental and medical transportation appointments and follow-up services. The call center for Texas Star and Star Plus Medicaid managed care provides enrollment broker services, including information services, eligibility verification, plan and provider changes and enrollment assistance.)

[9]MAXIMUS, “Call Statistics THSteps,” June 19, 2002, p. 22. (Handout.)

[10]Interviews with Melinda Metteaurer, vice president, Health Management Services, MAXIMUS, and Kari Dingman, vice president, Managed Care Enrollment Division, MAXIMUS, June 19, 2002 and July 11, 2002.

[11]Interview with Pam Chick, Program Administrator, PRS Statewide Intake Center, Department of Protective and Regulatory Services, September 30, 2002.

[12]TWC located its call centers in Austin, El Paso, Dallas, Fort Worth, San Antonio, Houston and McAllen. A call originating anywhere in the state routes to any of the call centers where a call center representative is available. Any of the call centers can take over-flow from any of the other call centers.

[13]Interview with Howard L. Wagner, Director, Austin Tele-Center, Texas Workforce Commission, and Brooks Myers, Director of Tele-Center Network Operations, Texas Workforce Commission, June 20, 2002.

[14]Interview with Howard L. Wagner, Director, Austin Tele-Center, Texas Workforce Commission, and Brooks Myers, Director of Tele-Center Network Operations, Texas Workforce Commission, June 20, 2002.

[15]State of Pennsylvania, (Last visited October 14, 2002.)

[16]Interview with Jerry Koerner, COMPASS Director, Pennsylvania Department of Social Services, June 15, 2002.

[17] Interview with Michael Nixon, Consultant, Deloitte Consulting, July 12, 2002.

[18]Interview with Guy Wilson, program manager, Program Development, Division of Benefits and Medical Eligibility, Arizona Department of Economic Security, July 10, 2002.