Nonprofit Bankruptcy Renews Questions About HRA Program

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When the major nonprofit Federation, Employment & Guidance Services (FEGS) announced last month that it was going bankrupt, it meant employees were going to have to find new work and vendors might have to wait to get paid. It also meant that a controversial welfare-to-work program was at a crossroads.

In three boroughs, FEGS ran the Human Resources Administration’s WeCARE (Wellness, Comprehensive, Assessment, Rehabilitation and Employment) program, earning $61 million a year to handle just over 30,000 clients whose ability to work was impeded by a disability. WeCARE was supposed to separate disabled people who—with a little training or help—could work, get them the assistance or treatment they needed, and help the rest apply for Social Security disability benefits.

FEGS ran WeCare in Manhattan, the Bronx and Staten Island while another nonprofit, FedCap, operated it in Brooklyn and Queens. FedCap will assume WeCARE operations in the three boroughs FEGS had served through the end of the current contract, which runs through October 2017.

But FEGS demise is a good excuse to review how closely WeCARE performance has been monitored since 2007 and 2008, when an advocacy group and the city comptroller both faulted WeCare for wasting money and complicating people’s lives.

WeCARE built upon the existing HRA programs that served those public assistance cash recipients that had barriers to employment. Public Assistance recipients claiming a mental or medical barrier to working would be referred to WeCARE for an employability/disability assessment. A medical or mental health professional would perform these assessments and the client could have a recommendation brought in by their own practioners. An employability determination was then made with the following recommendations: treatment, employment services, or assistance to make an application for social security benefits.

The contract that funded WeCARE operations was substantially based on performance outcomes, or milestones. For FEGS, nearly two-thirds of program income came from milestone payments. Every time a critical service—like finalizing an “Employability Plan,” placing a client in a job or creating a wellness plan—was completed, FEGS put in for payment. HRA was supposed to check to make sure the work had been done. An independent agency (the New York County Health Services Review Organization, which has since changed its name to Med Review.) was also hired to monitor the program’s medical practices.

But many reported that monitoring was still lax.

A 2007 report by the community-based organization Community Voices Heard (CVH) identified a number of problems with WeCARE. The focus was on client experiences. However, there were some problems identified with program oversight.

A June 30, 2008 audit report by then-City Comptroller William C. Thompson also criticized WeCARE’s monitoring. The audit made 14 recommendations to HRA for better monitoring. Of these recommendations, HRA accepted 12. Among the recommendations were that HRA should “create a central repository of records and data regarding the WeCARE contracts” and “establish clear responsibility for milestone reviews.” The audit report shows that a total of $2,053,869 was paid to WeCARE vendors for unsupported milestone claims.

As of this writing, the city has no plans to recapture these overpayments. At least some of the recommendations do appear to have been implemented. Past critics of WeCare say some problems persist, but they are quick to add that they want to give current HRA Commissioner Steve Banks, a long-time critic of the agency, a chance to improve performance. The new administration, one nonprofit executive tells, is much more open to suggestions than was the Bloomberg team.

Legal action is already shaping what the next round of WeCARE will look like. Shortly after FEGS announced its demise, HRA announced a settlement in a nine-year class action suit over its treatment of the disabled. Deputy HRA Commissioner for Communications, Marketing and Legislative affairs David Neustadt says HRA “will be revising its WeCARE RFP to reflect the requirements of that settlement and its plans for improving care for all its clients.”

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