Department backing down on welfare contract

JEFFERSON CITY, Mo. -- In a letter to House Republicans on Tuesday, the Missouri Department of Social Services backed down on its efforts to move people from welfare programs onto disability payments funded by the federal government.

Department director Alan Freeman wrote that the contract with Boston-based Public Consulting Group will now only shift people in the state's Medicaid population who have disabilities and serious medical conditions.

Republicans raised concerns about the original contract and the House Government Oversight and Accountability Committee conducted a hearing on it Monday. Republicans objected to the original program because they said it would move people from welfare ,which requires active job seeking to disability payments where working reduces monthly benefits.

Moving people from Medicaid onto disability payments could still save the state $28 million annually, because the state shares Medicaid's health-care cost but the federal government pays for Medicare coverage.

"We have taken a positive step forward that will prevent waste, fraud and abuse that has too often plagued all the federal entitlement programs," House Speaker Tim Jones said.

In addition to moving people with disabilities and serious medical conditions to disability, the original contract also would have attempted to move people whose cases weren't so clear-cut who might have had to "go to appeal to be won." Under the contract, Missouri will pay Public Consulting Group $2,300 for every person moved off the Medicaid program. The department said it entered the contract to save money and to move people who qualify for disability payments off Medicaid.

Freeman's letter to House Republicans also laid out the policy for contacting potentially eligible Medicaid recipients to move to disability. Rep. Jay Barnes, a Jefferson City Republican, had raised concerns at Monday's committee hearing that people would be pressured into switching programs.

Freeman wrote that Public Consulting Group will not be allowed to "cold call" Medicaid recipients and authorized phone calls between participants and the company will be recorded by the department.

At a news conference Tuesday, House Republicans praised the department's decision to alter this contract, but said the issue should have been brought to the Legislature before the contract was negotiated.

"I was surprised because I do expect [the department] to bring these issues to the committee ... but they heard a very strong message and we got a good solution," said Rep. Sue Allen, R-Town and Country.

The project is supposed to last for two years, but the department has not yet begun implementing the program. Public Consulting Group has similar contracts with Kentucky, New York, Illinois, Wisconsin and parts of California.