Economic Services Administration 060 - M2 - FF - CONTINUE ESAR ARCHITECTURAL DEVLOP

Agency Submittal: 21-2018 Suppl Agency Req Budget Period: 2017-19

REQUEST

The Department of Social and Health Services (DSHS) Economic Services Administration (ESA) requests $17,475,000 ($3,108,000 GF-State) and 15.5 FTEs to continue the Eligibility Service and Automated Client Eligibility System (ACES) Remediation (ESAR) Architectural Development project and for staff critical to the ongoing operation of ACES. PROBLEM STATEMENT

ESAR Project Costs An Independent Verification & Validation (IV&V) vendor identified significant risks and recommended improvements to the Automated Client Eligibility System (ACES). As required by Centers for Medicare and Medicaid Services (CMS), ESA hired this vendor to conduct a technology assessment of the system that is used to determine eligibility for over $2 billion in benefits paid annually to one out of three Washingtonians. Implementing the recommendations provides a great opportunity to mitigate the existing risks, modernize a critical 20 year old system, and receive federal funds to offset 90 percent of the personnel costs and 75 percent of the hardware and software costs. The ESAR Architecture Development project was funded in the 2015-17 Biennial Budget. Funding provided in the 2015-17 Biennium was based on cost estimates developed prior to the IV&V assessment, which revealed new findings and recommendations. Due to delays, a portion of the 2015-17 appropriation was unspent. These unspent funds were included in the 2017-19 Operating Budget to support continuation of the ESAR Architecture Development project. However, addressing the assessment results increased project costs and the current funding level is no longer sufficient to support the project. Operational Staffing ESA serves as the Information Technology (IT) steward for the development and support of application systems, infrastructure, and data needed to support public assistance programs and the accurate provision of cash, medical, food, and child care benefits. ESA application systems are used not only by DSHS, but also by other Washington State health and human services (HHS) agencies. With increasing services and demands, existing staff are unable to provide the level of support required by stakeholders and customers. Additionally, the work of these staff includes support of the successful operation of ACES. The operational success of ACES provides a necessary foundation for the ESAR Architecture Development project.

PROPOSED SOLUTION This request is for funding to support:

060 - M2 - FF - Continue ESAR Architectural Devlop

ESAR Project Costs Based on the vendor’s recommendations, ESA developed a project plan to:

Rehost the ACES application from the mainframe to a modern open system architecture/platform

Design and implement a modern relational database structure

Document all databases, data dictionaries, and interfaces

Reduce unused/dormant data and databases to lessen privacy/security concerns

In order to implement these recommendations, ESA has identified a need to hire additional staff to augment vendor staff. These staff will require the expertise and experience necessary to implement and support the new architecture/platform. The additional staff will provide subject matter expertise, testing, change management, and server support on an ongoing basis. Operational Staffing Six operational staff will fill critical positions needed to provide greater operational efficiencies and meet increasing demand. These positions include:

Change Control Board Manager

Code Promote Analyst

Release Coordination Analyst

Operations Management Support

Security Analyst

Vendor Management and Budget Administration

EXPECTED RESULTS ESAR Project Costs

Rehosting the ACES application system from the mainframe to a modern open system architecture/platform will improve operational efficiency, increase compliance with state and federal standards and policies while providing for a more flexible, interoperable, portable system.

Designing and implementing a modern relational database structure will improve security and avoid the duplication of data across disparate systems.

Documenting all databases, data dictionaries, and interfaces will allow all design, development, and testing to use consistent information for increased productivity and quality.

Reducing unused/dormant data and databases will reduce storage and processing costs while shrinking privacy and security exposure.

Greater operational efficiencies through better analysis, management, and oversight.

This project provides foundational work supportive of the larger Business and IT Transformation project discussed in separate Decision Packages (see 060-PL-KR and 110-PL-KR - Business and IT Transformation Decision Packages). DSHS Administrations and other state health and human services (HHS) agencies (including the Health Care Authority, Health Benefit Exchange, Department of Early Learning/Department of Children, Youth, and Families, and Department of

060 - M2 - FF - Continue ESAR Architectural Devlop

Health) have created a business vision document and are embarking on a larger Business and IT Transformation project to better meet evolving customer demands.

Operational Staffing

Increase in successful, well-communicated IT changes with corresponding decrease in adverse and unintended impacts as a result of those changes.

Backup support for critical positions that support of software code promotion and release activities, as well as ACES correspondence management.

Optimized software code promotion, software release, and change management processes. Increased capacity for more frequent releases and change implementation, facilitating quicker response to

customer demands for change.

STAKEHOLDER IMPACT

There is no known opposition.

DSHS Administrations and other state HHS agencies rely on functionality provided by the ACES Complex, including the

Eligibility Service.

OTHER CONNECTIONS

Performance Outcomes/Important Connections 1. Does this DP provide essential support to one or more of the Governor’s Results Washington priorities?

Goal 5: Efficient, Effective & Accountable Government - Customer Satisfaction and Confidence - 1.1 Increase customer services.

2. Identify other important connections or impacts below. (Indicate ‘Yes’ or ‘No’. If ‘Yes’ identify the connections or

impacts related to the proposal.) a) Regional/County impacts? No b) Other local government impacts? No c) Tribal government impacts? No d) Other state agency impacts? Yes e) Responds to specific task force, report, mandate or executive order? No f) Does request contain a compensation change or require changes to a Collective Bargaining Agreement? No

g) Facility/workplace needs or impacts? Yes

060 - M2 - FF - Continue ESAR Architectural Devlop

h) Capital budget impacts? No i) Is change required to existing statutes, rules or contracts? No

j) Is the request related to litigation? No k) Is the request related to Puget Sound recovery? No l) Other important connections? CMS for Federal funding 3. Please provide a detailed discussion of connections/impacts identified above. This project provides foundational work supportive of the larger Business and IT Transformation project discussed in a

separate Decision Package (060 – PL – KR – Business and IT Transformation). DSHS Administrations and other state HHS

agencies have created a business vision document and are embarking on a larger Business and IT Transformation project

to better meet evolving customer demands.

d) ESA’s Affordable Care Act (ACA) systems have interfaces to HBE and HCA systems. These interfaces are not expected to change but personnel from these agencies could be involved for short periods during testing.

g) Project vendors will require facilities for their personnel. This was anticipated and some space is available in multiple person pods co-located with state employees, state contractors, and oversight consultants. Other staff may require leased space and this is included in the setup and lease costs of the staffing model.

i) ESA receives substantial federal funding for the modernization of Eligibility & Enrollment (E&E) systems. We expect funded projects to provide changes that improve the State’s ability to adhere to Medicaid Information Technology Architecture standards and conditions. Alternatives/Consequences/Other 4. What alternatives were explored by the agency, and why was this alternative chosen?

Multiple options were researched and analyzed as part of the independent vendor technology assessment required by CMS. Rehosting and database modernization provided the greatest benefit in the shortest timeframe for the lowest cost.

5. How has or can the agency address the issue or need within its current appropriation level?

Current appropriations support the fixed price agreement with International Business Machines (IBM). ESA has investigated several options to modernize or improve system operations with IBM. All have indicated substantial cost increases.

6. Does this decision package include funding for any IT-related costs (hardware, software, services, cloud-based

services, contracts or IT staff)?

☐ No

☒ Yes (Included in the IT Addendum - See attached

Fiscal Detail 060 - M2 - FF - Continue ESAR Architectural Devlop

Operating Expenditures FY 2018 FY 2019 FY 2020 FY 2021

001-1 General Fund-State 956,000 2,152,000 1,187,000 1,150,000

001-2 General Fund-Federal 410,000 1,026,000 0 0

001-C General Fund-Medicaid 3,693,000 9,238,000 770,000 470,000

Total Cost 5,059,000 12,416,000 1,957,000 1,620,000

Staffing FY 2018 FY 2019 FY 2020 FY 2021

FTEs 8.6 22.3 15.0 12.0

Performance Measure Detail

Incremental Changes

Activity: FY 2018 FY 2019 FY 2020 FY 2021

Program: 060

F078 Program Support

No measures submitted for package

Object Detail FY 2018 FY 2019 FY 2020 FY 2021

A Salaries and Wages 745,000 1,970,000 1,297,000 1,077,000

B Employee Benefits 261,000 694,000 454,000 373,000

E Goods and Other Services 3,881,000 9,579,000 92,000 77,000

G Travel 2,000 4,000 3,000 2,000

J Capital Outlays 104,000 0 0 0

P Debt Service 3,000 7,000 4,000 4,000

TZ Intra-agency Reimbursements 9,000 22,000 15,000 75,000

ED Rentals and Leases – Land and Buildings 54,000 140,000 92,000 12,000

Total Objects 5,059,000 12,416,000 1,957,000 1,620,000

DSHS Source Detail

Overall Funding

Operating Expenditures FY 2018 FY 2019 FY 2020 FY 2021

Fund 001-1, General Fund-State

Sources Title

0011 General Fund State 698,000 1,666,000 867,000 840,000

GFS2 General Fund State TANF Moe 258,000 486,000 320,000 310,000

Total for Fund 001-1 956,000 2,152,000 1,187,000 1,150,000

Fund 001-2, General Fund-Federal

Sources Title

E61L Food Stamp Program (50%) 410,000 1,026,000 0 0

Total for Fund 001-2 410,000 1,026,000 0 0

Fund 001-C, General Fund-Medicaid

Sources Title

19UD Title XIX Admin (90%) 3,630,000 9,121,000 13,000 8,000

19UL Title XIX Admin (50%) 63,000 117,000 757,000 462,000

Total for Fund 001-C 3,693,000 9,238,000 770,000 470,000

Total Overall Funding 5,059,000 12,416,000 1,957,000 1,620,000

060-M2-FF-Continue ESAR Architectural Development IT Addendum

2018 Supplemental IT Addendum – 060-M2-FF Continue ESAR Architectural Development

Part 1: Itemized IT Costs Please itemize any IT-related costs, including hardware, software, services (including cloud-based services), contracts (including professional services, quality assurance, and independent verification and validation), or IT staff. Be as specific as you can. (See chapter 12.1 of the operating budget instructions for guidance on what counts as “IT-related costs”)

Information Technology Items in this DP FY 2018 FY 2019 Total

State FTEs (FY 2018 -8.62 FTE, FY 2019 –22.25 FTE) 1,230,000 2,977,000 4,207,000

IBM Costs 1,394,000 1,394,000 1,788,000

Project Management Team (PMT) 1,284,000 1,284,000 2,568,000

Independent Verification and Validation (IV&V) 1,361,000 1,361,000 2,722,000

Quality Assurance Consultants (QA) 351,000 351,000 702,000

State Contractor Team (Various SMEs) 1,163,000 1,320,000 2,483,000

Re-hosting Services (Outside Vendor via RFP) 1,400,000 7,000,000 8,400,000

Organization Change Management (OCM) 470,000 470,000 932,000

Total ESAR Project Cost 8,653,000 16,157,000 24,810,000

State Share 1,389,000 2,603,000 3,992,000

State Share (Approved in Biennium Budget) 433,000 451,000 884,000

Additional ESAR Project Ask 5,059,000 12,416,000 17,475,000

ESAR is a pre-existing project that has undergone multiple concept reviews with OCIO at numerous gateway presentations.

Part 2: Identifying IT Projects If the investment proposed in the decision package is the development or acquisition of an IT project/system, or is an enhancement to or modification of an existing IT project/system, it will also be reviewed and ranked by the OCIO as required by RCW 43.88.092. The answers to the three questions below will help OFM and the OCIO determine whether this decision package is, or enhances/modifies, an IT project:

1. Does this decision package fund the development or acquisition of a ☒Yes ☐ No new or enhanced software or hardware system or service?

2. Does this decision package fund the acquisition or enhancements ☐Yes ☒ No of any agency data centers? (See OCIO Policy 184 for definition.)

3. Does this decision package fund the continuation of a project that ☒Yes ☐ No is, or will be, under OCIO oversight? (See OCIO Policy 121.)

If you answered “yes” to any of these questions, you must complete a concept review with the OCIO before submitting your budget request. Refer to chapter 12.2 of the operating budget instructions for more information.