New upgrades could put an end to a legacy computer system that has cost the state more than $130 million in improper payments.
Colorado Gov. John Hickenlooper inherited the troubled Colorado Benefits Management System when he took office in 2011. (World Economic Forum)
After years of technical problems and tens of millions of dollars in improper payments, the State of Colorado is taking another crack at fixing its medical benefits eligibility system.
Salesforce, one of the vendors involved in the upgrade, announced last week that the state is launching a new Colorado Benefits Management System (CBMS), which more than 5,000 county and medical assistance site employees across the state will use to determine eligibility for different types of medical assistance.
The vendors say the new system will allow the state to respond to requests "in a more timely manner" — a nod to at least one aspect of the struggle the state and its residents have been facing the past 13 years.
Deloitte will implement the system using products from Salesforce and Amazon Web Services. The state has yet to integrate the new technologies, and the system's director within the Governor's Office of Information Technology (GOIT), Herb Wilson, told StateScoop that the "user and client experience" offered by the new system will depend on how well the integration goes.
While moving to a modern cloud-based solution is generally considered a step in the right direction for government, CBMS must reckon with a checkered past.
When the original system was launched in 2004, commissioned from Electronic Data Systems, it was supposed to replace a hodgepodge of disparate and inefficient applications, but what the state got instead was $100 million in technology that didn't work properly and proved increasingly expensive and dangerous as time went on.
Commissioned under former Gov. Bill Owens in 2000, the system was launched in September 2004 under former Gov. Bill Ritter. The troubled technology was passed down to current Gov. John Hickenlooper when he took office in 2011.
According to a 2011 report by two researchers from the University of Denver chronicling the system's history, the original conversion of six legacy applications into a single CBMS system was "a disaster."
"The new system was not capable of processing transactions as efficiently as the systems it replaced," the report states. "Huge backlogs of unprocessed transactions developed, which resulted in employees working overtime, the hiring of temporary employees, and the installation of additional computer servers to add capacity."
Still, the state struggled forward using the new system, and a legislative audit in 2006 showed that, using CBMS, the state had accidentally administered about $90 million in improper welfare payments.
What followed were years of talks between the legislature, the courts and the executive branch to find ways to improve both the technology used and the state's processes — and yet similar incidents have persisted. As recently as March 2017, the system was blamed for improper payments dating back to 2015 totaling as much as $43 million after the state “erroneously categorized” some services. The accidental payments were understandably controversial at the time, and the Hickenlooper administration was arguing internally with how best to come up with the funds to repay the federal government, according to the Denver Post.
Rather than take on the task of fixing the expensive system, the state has at each juncture, prior to 2011, opted instead to "kick the can down the road," university researchers wrote. And in at least one case, the state incurred more than just financial costs.
Zumante Lucero, a 9-year-old boy, died of asthma in July 2009 after a state benefits error denied him his prescription coverage, according to the Denver Post. His mother, Zuton Lucero, claimed that she called the state's human services department every three days for four months after she was unable to get prescription drugs for her son. Though the state's automated system informed her that her children, including Zumante, were eligible for prescription coverage, she was denied the drugs when she arrived at pharmacies — they had received different information and were required to tell her that he was not eligible to receive the drugs.
OIT told StateScoop that Colorado has "worked tirelessly" to fix and upgrade the system after the improper payments reported in 2017 and believes that problem has been addressed.
“CBMS has grown tremendously over the past eight years, allowing counties to process applications significantly more timely and improving performance by more than 40 percent," Wilson said in an email to StateScoop.
OIT says that it's largely because of the technical progress the state has made in recent years that has allowed the current upgrade possible. The state reports that the system has now exceeded a "95 percent timely goal for benefits processing" since May 2016.
By moving CBMS to what Salesforce calls "a cloud-based, modular application that is modern and agile," county employees will be able to respond and process applications "more quickly," while a separate analytics application will allow the monitoring of staff workloads and show where applications are getting backlogged.
"The new Salesforce and AWS technologies will make CBMS modular and easier to update, allowing the state to more quickly adapt the system to fulfill future needs, ensure policy compliance and improve the client experience," Wilson wrote.
The total cost of the project, including the cost of supporting software needed to transition the system to the new platform has not yet been established, according to OIT, and will be determined by budget appropriations, which are now being negotiated, that are expected to span two fiscal years.
Line items in the upgrade budget will need to include "duplicate software" to allow CBMS to continue operating will the new environments are developed, OIT said.
"Another large budget item," Wilson said, "will go to experts who assist in the design and development of the State of Colorado’s solution."
This story has been updated since being originally published on Jan. 17, 2017 to include additional comments and clarification from OIT.