San Marcos — Nearly 400 Hays County children have lost health coverage under Medicaid or the state’s Children’s Health Insurance Program since December when a contractor took over public assistance enrollment here as a pilot program for the rest of the state.

As part of an $800 million contract inked in July 2005, the Texas Health and Human Services Commission plans to close 99 of its local offices and replace them with call centers operated by Accenture L.P., a consulting firm.

The company has already started handling CHIP enrollment statewide and, through a pilot program in Hays and Travis counties, is developing a system to integrate all requests for public assistance — CHIPS, Medicaid, food stamps and others — into a single application process available through the phone, fax, Internet or mail.

But since the pilot started, enrollment in both children’s and adult’s Medicaid has declined faster here than in the rest of Texas. Between December and July, children’s Medicaid enrollment in Hays County dropped by 382 children, a 7.7 percent decrease compared to four percent statewide.

At the same time, enrollment in adult’s Medicaid decreased by 272 people, 10 percent, compared to a nearly 1 percent increase statewide. For example, those receiving elderly or disabled benefits fell by 320 people — a 16.4 percent drop — compared to a 2.4 percent increase statewide.

Travis County, the only other county in the pilot, saw similar decreases in both programs.

Coupled with problems seen with the company’s handling of CHIP enrollment, Health and Human Services has indefinitely delayed rolling out the integrated system statewide.

Some local front-line workers say the experiences seen by poor people in Hays County and elsewhere should serve as warning about the dangers of privatizing social services. Clients have reported being dropped from rolls without reason, had applications lost and confronted busy signals and poorly trained call center employees, officials say.

Enrollment in CHIP has dropped by 72,921 children since November and has decreased by 233,940 since its high in May 2002 before Texas started tinkering with contractor enrollment.

“The number of children in the state hasn’t gone down and the number impoverished children in the state hasn’t gone down so it throws up red flags that something is wrong,” said Toby Hooper, the Community Outreach manager for Seton Health System’s Insure-a-Kid program.

Shutting down local offices while the pilot is beset with problems is unwise, said Hooper, who is also San Marcos’ Health and Human Services board chair. The San Marcos office is not among those being closed, although those in Caldwell and Guadalupe counties are.

“It’s almost like they’re doing a high wire act and saying ‘cut the net,’” he said. “These offices can resolve a lot of the problems that arrive and kind of absorb the shock of implementing these contracts. But they’re shutting them down.”

Nick Icossipentarhos, the county’s personal health department director, said his office has been swamped with requests for help from families that have had trouble enrolling or re-enrolling after being dropped.

“Unfortunately, when people try to call for help they can’t get through a lot of the times,” Icossipentarhos said.

While conceding problems with the Accenture program — and particularly the Hays County pilot — state officials say enrollment declines can’t be blamed on the contractor.

“We don’t think the decline is caused by a problem with the contractor,” said Ted Hughes, a Health and Human Services spokesperson. “That’s not to say there have been no performance issues, but we don’t think that’s the cause.”

Policy changes implemented at the same time as the Accenture contract may be to blame, he said. CHIP enrollment has to be renewed twice a year instead annually, a change many beneficiaries apparently did not know about.

Noting that he voted against the bill that allowed the Accenture contract, State Rep. Patrick M. Rose said his office has been helping local families gain or regain health coverage.

“I voted against it and would vote against it again if it came up. Right now, we’re trying to find solutions in the context of this reality,” Rose said. “...A lot of glitches need to be worked out before it is expanded statewide, if it is at all.”