HHSC Strikes (Out) Again

The Texas Health and Human Services Commission (HHSC) is the largest state agency in Texas and one of the largest in the entire nation. The state’s current two-year budget totals $217 billion; HHSC is responsible for about $80 billion of that.  Given the sheer number of dollars involved – and the important programs it oversees – it’s really important the agency is well-run. 

Under former Governor Rick Perry, HHSC was rightfully criticized for bungling huge, multi-million dollar contracts – wasting taxpayer money and sometimes failing to deliver health care services efficiently.  When Governor Greg Abbott took over three years ago, he made a big show of putting his own people in at HHSC and signaling with him in charge, things would be different.

Not so much.  It’s really just more of the same. 

Last Wednesday, Abbott’s HHSC Executive Commissioner, Charles Smith, appeared before House budget writers in response to two more state contracts being mishandled by the agency. 

In an effort to acknowledge the agency’s mistakes, Smith said: “I’m sitting before you because we failed. We let you down. We let the governor down. We let taxpayers down. We let our vendors down. We let our fellow professionals down. Everyone deserves better.”

That same day, the agency’s chief operating officer stepped downTwo days later, the deputy executive commissioner for procurement and contracting services followed and became the fifth departure in two short weeks over this new set of failed contracts that have followed years of contract mismanagement.

The first of this month’s bungled contracts impacts Children’s Health Insurance Program (CHIP) providers servicing rural areas of our state. The agency incorrectly scored potential providers’ applications, resulting in the cancellation of five contracts worth $580 million. If that wasn’t bad enough, it was the competing providers, not internal agency controls, that identified the errors.  Fortunately for CHIP recipients, the contracts were not set to go into effect until September 1, 2018 and current coverage will be extended to prevent a gap in service.

The second set of errors were revealed via a State Auditor’s report outlining problems with a $17.5 million contract from 2016 for the maintenance of the state’s birth and death records database. As with the CHIP contracts, HHSC failed to use the correct methods to score vendor applications. HHSC officials also used incorrect information to award the contract to Genesis Systems, Inc. The errors ultimately led to the database launch being delayed by a year at a cost to taxpayers of an additional $1 million.

These contracting errors are unacceptable. But what is even more unacceptable is what is missing from Smith’s mea culpa to the committee. It’s the millions of Texans — our state’s most vulnerable who rely on programs administered by HHSC — that Smith, our state’s leadership and this agency have let down.

These contracting errors and mistakes have to stop. There is far too much at stake.

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