After five years and $400M, TennCare quietly launches new application system

• TennCare Connect is designed to process applications quickly online or by phone.
• The application system cost more than $400,000,000 and is five years overdue.

It is a big day for the poor and the sick in Tennessee, even if they don't know it yet.

TennCare quietly launched an exceptionally expensive and long-overdue Medicaid application system over the weekend, potentially transforming how some of Tennessee's most vulnerable residents obtain medical coverage and other benefits.

Officials confirmed the TennCare Connect system – designed to quickly process applications online or by phone – went live Saturday morning. This application system, which has been federally mandated since 2014, is built upon a computer infrastructure that cost about $400 million, mostly covered by the federal government.

TennCare officials were coy about the launch of new system as recently as Friday, refusing to say when it would function statewide. TennCare Director Gabe Roberts said much of the new system has worked behind the scenes for months and the final milestone was to roll out the TennCare Connect web portal to the entire state.

But officials worried they risked a technological collapse – not unlike what happened in initial days of Obamacare – if the web portal fully launched before it was ready.

“We’ve got this huge amount of time, and this huge amount of money invested in this system,” Roberts said. “Every though (the web portal) is a relatively small part of the overall system, it’s overwhelmingly the part people are going to see." 

“So we have to make sure we are comfortable with it and ready to go.”

Despite Roberts projecting caution, there are at least some concerns that TennCare Connect will struggle. The Tennessee Justice Center, a nonprofit law firm, said Monday it has already received complaints about the computer program at the core of the new application system.

“We’re scared to death those problems are only going to get worse,” said Chris Coleman, an attorney for the Tennessee Justice Center. “Because we’ve been flooded with calls from the counties where they have been piloting (the new system,) and even things that were working before are not working now.”

There appear to be at least some problems at the new TennCare call center. According to public records provided by the Justice Center, TennCare financially penalized KEPRO, the company running the call center, for not processing calls quickly or accurately enough. TennCare penalized the company $142,000 in February and threatened to withhold another $197,000 at the beginning of March.

When asked about these penalties last week, TennCare officials said the call center problems were minor and should not hamper the application system overall. If anything, Roberts said, the penalties show that TennCare is holding its vendors accountable to ensure the new system is successful.

TENNCARE:As Tennessee's economy improves, TennCare gets more expensive

TennCare Connect: A web portal, a call center and a 'brain'

TennCare Connect consists largely of three major components: The web portal, which can be used to apply for online; a call center, which handles applications over the phone; and an internal computer system – the Tennessee Eligibility Determination System, or TEDS – which officials call the "brain" of the new application system.

Both the web portal and the call center use TEDS to determine if applicants are eligible for TennCare or the social services by analyzing a complicated mix of income and medical variables. TEDS automatically interfaces with more than 100 outside sources, including the IRS and Social Security Administration, to verify information from applicants, said Hugh Hale, Tenncare's Chief Information Officer.

"We’ve been working on this for years, and there have been 100 people in a room testing this since last April,” Hale said. “We may have one chance to give a great first impression. And we are going to be testing until the day – up until the second – we press the button.”

MEDICAID EXPANSION:Three deep-red states just did it. Why not Tennessee?

Previously, most applications for TennCare were processed by the federal government, which took on responsibility for applications with the passage of the Affordable Care Act but mandated states to create a modernized application system of their own.

Historically, most TennCare applications were processed by mail or in person, but the process was slow and difficult to use, especially for poor and rural residents who were most likely to need TennCare in the first place. TennCare was forced into the digital age with the passage of the Affordable Care Act, known as ObamaCare, which began processing online applications on the state's behalf but mandated Tennessee to modernize it's own application system.

Modernization has not been quick and it has not been cheap.  TennCare contracted Northrop Grumman, a military technology company, to build TEDS in 2012, then fired the company when the work was never completed. A new company, Deloitte Consulting, was hired on a five-year contract to finish the job in 2016.

“We’ve already been down the road once and had a false start,” Roberts said on Friday, still uncertain when TennCare Connect would actually launch. “What we care about is make sure we are doing this right by the people we are serving and by the taxpayers. We want to make sure the system works, and works as designed, and when the system works by designed, it will be launched.”

Brett Kelman is the health care reporter for The Tennessean. He can be reached at 615-259-8287 or at brett.kelman@tennessean.com. Follow him on Twitter at @brettkelman.