Legislature Halts DHS Modernization Plan

Department of Human Resources News Release

The State Legislature has effectively blocked an innovative and cost-saving initiative to modernize the processing of applications and renewals for Medicaid, welfare, nutrition benefits and other forms of public assistance, announced Department of Human Services (DHS) Director Lillian Koller.

“By passing this misguided bill and overriding Governor Lingle’s veto, the Legislature has stopped cold the EPOD initiative. I strongly encourage the next Governor to revive our plan, because a modern processing system would greatly improve customer service while saving about $8 million each year for taxpayers.”

The Legislature blocked the EPOD plan on the Neighbor Islands, and even requires any pilot project on Oahu to stop by June 30, 2011. The new law also prevents implementation of any pilot project until DHS completes a lengthy process of adopting new administrative rules, conducting public hearings and engaging in consultation for a second time with the Hawaii Government Employees Association (HGEA) – something that is not normally required when internally reorganizing a state agency, Koller pointed out.

Under the original DHS plan, the processing of applications and renewals for public assistance would take place at two consolidated centers in Honolulu and Hilo, rather than at 31 separate small offices scattered across the Islands.

Because of the efficiencies created by EPOD – including a call center, online applications and a streamlined workflow – fewer government employees would be needed to handle the caseloads. HGEA staunchly opposed any layoffs of union workers and joined with Representative John Mizuno and other legislators in conducting a statewide push to discredit the EPOD proposal.

“The new law, by design, does not allow DHS to achieve a quick solution to this crisis. Despite these constraints, DHS will continue doing all it can to improve customer service over the next seven months, but this will fall far short of the convenient and speedy system we could have implemented through EPOD, such as opening the Honolulu processing center in June.”