Policy Studies, Inc

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Policy Studies, Inc.

1899 Wynkoop Street
Denver, Colorado 90202
U.S.A.
Telephone: (303) 863-0900
Toll Free: (800) 217-5004
Fax: (303) 295-0244
Web site: http://www.policy-studies.com

Private Company
Incorporated: 1984
Employees: 1,030
Sales: $128 million (2002)
NAIC: 541611 Administration Management and General Management Consulting Services

Policy Studies, Inc. (PSI) provides administration outsourcing, research, and consulting services to local, state and federal agencies in the areas of child support enforcement, health benefits administration, and judicial systems organization. The bulk of the company's business involves consulting and administration of child support enforcement, including payment collection and redisbursement, voluntary paternity establishment, backlog collections, review and adjustment, and other aspects of case management. In addition to providing research and consultation for specific aspects of case management for government agencies in all 50 states and administration outsourcing for specific programs in 21 states, PSI provides full-service child support enforcement administration for counties in Arizona, Colorado, Maryland, North Carolina, Oklahoma, Tennessee, Virginia, West Virginia, and Wyoming.

In the area of health care, PSI administers State Children's Health Insurance Programs (SCHIPs) and other health benefits programs. PSI Arista provides consulting and administration on healthcare-related issues, such as public policy research, public education campaigns, strategic planning, and technology. Other consulting and research services include judicial process assessment and recommendations for case flow management.

PSI Technologies specializes in the development and implementation of computer software systems that facilitate child support enforcement and health care enrollment and claims processing. Information technology services include web site development, call center customer service systems, and database development.

1980s Origins

Founded in 1984 by Robert Williams, David Price, and Betty Schulte, PSI originated with Williams's participation in a national study to determine the appropriate level of court-ordered child support payments. As the chief researcher for the U.S. Health and Human Services' Office of Child Support Enforcement (OCSE), Williams provided research and technical consulting for the Child Support Guidelines Project beginning in 1983. Williams initiated the formation of PSI to provide similar theoretical research to human services programs, primarily in the areas of food stamps and aid to families with dependent children.

Williams' work with the OCSE culminated in the 1987 publication Development Guidelines for Child Support Orders, a seminal work which recommended the Income Shares model to determine court-ordered child support for non-custodial parents. Williams based the model on the idea that children should be supported in the same manner as they would if living in the household of an intact family. A portion of the non-custodial parent's after-tax income therefore applied to children's support in a single household through payment to the primary parent. With the intention of preventing child poverty, the Income Shares model increased child support obligations by as much as triple original court-ordered arrangements. When the Family Support Act of 1988 required states to adopt uniform guidelines for determining child support, by tying it to eligibility for federal welfare funding, OCSE recommended the Income Shares model, thus assisting PSI's entry into child support consulting. Eventually, more than 30 states adopted the Income Shares model.

PSI's shift toward child support enforcement developed from its participation in the study. Government agencies faced an increasing backlog of uncollected child support in the aftermath of high divorce rates during the 1970s, and the situation demanded more effective methods of addressing child support enforcement. In partnership with state and local agencies, PSI developed efficient methods for administering larger caseloads, which involved using every legal step allowed under a particular jurisdiction. PSI consulted on the application of new computer technologies which began to play a significant role in administration. For instance, PSI initiated electronic funds transfer to facilitate collection and disbursement of child support payments and developed computer software to ease access to individual case information.

In 1991, as the company's innovations in child support collections came to national attention, PSI became the first company to be awarded a contract to provide child support enforcement administration. That year the Tennessee Tenth Judicial District hired PSI to handle cases for the cities of Cleveland and Athens and surrounding areas in southeast Tennessee. PSI received a fee, at 10 to 15 percent of money collected, declining over the term of the five-year contract (but not derived from child support funds).

PSI expanded as other county governments decided to outsource child support enforcement. PSI obtained a contract for the Tennessee 29th Judicial District for Dyer and Lake Counties in 1992. The following year Douglas County in Nebraska hired the company to manage its child support office for Omaha, the first urban program to be outsourced. In 1994 PSI obtained contracts for Fulton County, Georgia, covering the city of Atlanta, and for Yavapai and Santa Cruz Counties in Arizona.

Contracts effective January 1, 1995, covered Obion and Weakley Counties, and Union City, Tennessee. More than 5,000 cases accounted for potential collection of $2.5 million in court-ordered payments. In Wyoming PSI obtained contracts for the First, Second, and Third Judicial Districts, covering Cheyenne, Laramie, Green River, and Evanston. By the end of 1995 PSI operated with a staff of 280 lawyers, paralegals, clerks, and other employees. With outsourcing contracts in 5 states and consulting contracts in almost every state, PSI earned $12.9 million in revenues.

PSI had shown its child support enforcement methods to be effective by the end of 1995. During the first four years of its contract with the Tennessee Tenth Judicial District, from 1991 to 1995, PSI handled 130,000 cases of unpaid child support and alimony and increased collections 140 percent, a total of $63 million for all four years.

While child support services became the primary source of business, PSI continued to provide research and consulting services on other government issues. PSI conducted several studies on judicial process, involving structural and organizational assessment of judicial case flow. Landmark research resulted in the 1992 publication of An Approach to Long Range Strategic Planning in the Courts, along with curriculum for judicial educators and trainers. In 1995 PSI released Strategic Planning in the Courts, Implementation Guide, describing the outcomes of strategic planning programs instituted in nine jurisdictions. PSI published research on Representing Indigent Parties in Civil Cases: An Analysis of State Practices. The study on Culturally Responsive Alternative Dispute Resolutions for Latinos utilized information PSI obtained from research in Maricopa County's judicial system in Phoenix, Arizona.

Mid-1990s Welfare Reform Creates New Demands

PSI's range of services within child support enforcement expanded with the Personal Responsibility and Work Opportunities Reconciliation Act of 1996. Also know as the Welfare Reform Act, the federal legislation allowed for government agencies to obtain overdue payments through federal income tax withholding, license restrictions, and other methods. The law required states to centralize case files for child support collection and disbursement, prompting PSI to increase its emphasis on high technology solutions to case management problems with the formation of PSI Technologies. For instance, the legislation required state participation in a National Directory of New Hires to assist in tracking delinquent child support obligors. The law required companies to report new employees within 20 days of hire. PSI implemented new-hire reporting systems for several states, primarily using electronic methods that easily transferred information to the national database.

Early paternity establishment became an essential aspect of rapidly initiating court-ordered child support for children of unwed mothers, in order to deter dependence on welfare. PSI instituted Paternity Opportunity Programs for state agencies in New Jersey, Iowa, Ohio, Massachusetts, and other states, involving both legal and technological solutions. The company emphasized obtaining voluntary acknowledgment. Approaching mothers in the maternity ward, they found fathers acknowledged paternity more readily at this time. PSI staff discovered they had more flexibility in this approach than a government agency, as hospital personnel perceived the company as a neutral third party. Technological concerns involved management of voluntary acknowledgments in a central database. PSI applied new software to provide imaging, storage, indexing, retrieval, and distribution of case file documents.

PSI continued to pursue child support enforcement outsourcing opportunities, bidding and winning several contracts during the late 1990s. PSI obtained child support enforcement contracts with Cobb County, Georgia, covering Marietta and Smyrna, and DeKalb County, covering cities east of Atlanta. A contract with Kanawha County in West Virginia covered the city of Charleston. The Tennessee 21st Judicial District, covering Franklin and Hohenwad, hired PSI to handle all aspects of child support enforcement. At the end of 1997 PSI operated 16 child support offices in five states. A five-year, $10 million contract with Chesapeake and Hampton Counties in Virginia, effective February 1, 1999, added two more offices.

Company Perspectives:

PSI's commitment to improving performance distinguishes our work. We apply our deep understanding of policy, technology, and operations to help our clients solve problems, automate processes, and enhance performance.

PSI's research activities continued to focus on child support issues and judicial process. In 1997 PSI published its Evaluation of the Child Access Demonstration Projects, a report to the U.S. Congress which discussed and analyzed seven child support enforcement projects. Research conducted in four Wisconsin counties covered the judicial process in child abuse and neglect cases resulted in the 1998 publication A Practical Guide to CHIPS Case Processing. Other 1998 publications included Continuous Quality Improvements in the Courts: A Practitioner's Handbook and A Judge's Guide to Culturally Competent Responses to Latino Family Violence.

21st Century Technologies

As computer technology improved, PSI Technologies developed and adapted state-of-the-art systems to address the needs of child support administration. In 2000 the company obtained a contract to establish the New Mexico Child Support Information Center, which responds to inquiries about the status of particular child support cases. Using proprietary PSI-Link software, the system simplified and quickened access to information stored on mainframe computers, transferring only relevant data to desktop computers in a user-friendly format. PSI-Link provided a record of customer service calls, as well as related statistics. Effective technologies enabled customer service to staff to handle 1,200 to 1,500 calls per day.

As organizations of all kinds began to use the Internet for information dissemination, PSI began to offer web site development to government agencies. In 2001 PSI developed a web site for the Colorado Department of Human Services to improve access to general information by parents, employers, and child support staff. PSI further improved the site in 2002 to allow parents access to case file status. Iowa's Bureau of Collections hired PSI to design and build a web site that provided employers direct access to child support forms online. The Employers Partnering in Child Support (EPICS) system was recognized by the Council of State Governments for its innovation in resolving bureaucratic problems in state government. PSI applied a similar system for the State of Vermont as well.

PSI obtained a contract with the state of Vermont's Office of Child Support to install an electronic document management system that would facilitate access to case files from five regional offices, eliminating the need for mailing or faxing paper copies. PSI applied OnBase software solution, by Hyland Software, Inc., to provide imaging, storage, indexing, retrieval, and distribution of case file documents. The total system included Bar Code Recognition for indexing imaged documents and Applications Programming Interfaces for transferring data from the central system to staff desktop computers. Implementation of the system increased efficiency and improved customer service. Also, PSI transferred to the OnBase software documents for the state of New Jersey's Paternity Opportunity Program, implemented by PSI in 1995. OnBase allowed the documents to be accessed by a greater number of staff members at courts and human services agencies statewide.

PSI obtained successive contracts with the state of Michigan to overhaul its automated child support enforcement system to meet federal requirements. Contracts accumulated more than $200 million in revenues during the two-and-a-half year process. PSI converted nearly one million cases to the new system, involving offices of Family Independence Administration, prosecuting attorneys, and Friends of the Court in each of the state's 83 counties. The development, implementation, and federal certification process involved as many as 500 employees working in collaboration with state employees. The state of Michigan needed to implement the system rapidly, by September 30, 2003, in order to avoid several million dollars in federal penalties. PSI completed the system on time and the state received federal certification in November; however, several problems required high level of maintenance for which another company was hired at lower cost.

PSI continued to expand its child support reinforcement operations, obtaining contracts for the Eighth and Ninth Judicial Districts covering Douglas and Lander, Wyoming, in 2000. New contracts in 2001 involved jurisdictions covering Arlington and Alexandria, Virginia; Asheville, North Carolina, in Buncombe County; and neighboring Polk County. PSI obtained contracts with El Paso County in Colorado Springs and adjacent Teller County, both in Colorado, to collect back child support. The 5-year, $18.6 million contract with El Paso County involved hiring a staff of 22 employees who would operate the Parent Opportunity Program, providing job training and placement for unemployed and underemployed parents.

Job training and placement and parenting support developed as new subjects requiring study and solutions. Activities in this area included a study conducted for the Annie E. Casey Foundation, entitled Low-Income Fathers: Starting Off on the Right Track. The report recommended actions for improving the treatment of low-income fathers in the child support enforcement system.

Key Dates:

1983:: Founder's participation in federal child support study leads to formation of PSI.
1987:: PSI publication, Development Guidelines for Child Support Orders, establishes Income Shares model for determining child support.
1991:: PSI is the first company in the country to obtain a contract to provide child support enforcement administration.
1996:: PSI Technologies formed to provide state-of-the-art technology for case processing and information access.
1999:: PSI operates 18 child support enforcement offices in six states.
2002:: Acquisitions establish PSI in health care program consulting and administration.
2003:: PSI completes $200 million contract with state of Michigan.

PSI entered the field of health care administration, research, and consulting through acquisition. In April 2002 PSI acquired Child Health Advocates. That company administered the federal Child Health Plan Plus to provide health care for children of low-income families for the state of Colorado. (The state did not renew the contract in 2002, however.) Through the acquisition PSI obtained proprietary Child Health Administration Management Program System (CHAMPS) software. The technology facilitated qualification processing by transforming state regulations into a matching system, based on age, family income, and other factors, which could easily be adapted to changing regulations. CHAMPS processed four to five applications per hour, in contrast to about two per hour manually. The system was implemented in Colorado and Virginia.

Arista Associates, acquired by PSI in June, provided research, consulting, and marketing services to the state health agencies through offices in Charlotte, North Carolina, Washington, D.C., and Chicago, Illinois. Renamed PSI Arista, the subsidiary formulated health education campaigns in Maine and Massachusetts to encourage the general public to be tested for sexually transmitted diseases and hepatitis C, respectively.

Through the acquisition of Dental Health Administration and Consulting Services, Inc. (DHACS), PSI took over outsourcing contracts for administration of Georgia PeachCare for Kids and Florida KidCare, both health insurance programs for children of low-income families. The company also processed premiums for Indiana's Hoosier Healthwise and MedWorks programs. PSI transferred a call center operated by DHACS in Lisle, Illinois, to the Palm Beach area in Florida. The call center handled customer service inquiries for children's health plans in Georgia, Florida, Indiana, and Michigan.

In July 1, 2003, PSI began fulfillment of a contract to administer the state of Missouri's Managed Care Program for Medicaid recipients. PSI to implement a new information system that would ease enrollment and improve customer service through access to a database of participating health care providers.

A contract held jointly with Health Management Systems for the Colorado Department of Human Services involved enforcement of medical support orders, whereby parents are required to extend health insurance benefits to dependents. Under the contract, HMS would identify parents with health coverage and PSI matched data with the Child Support Enforcement Office files of non-custodial parents.

During 2002 PSI began fulfillment of child support enforcement contracts for Cochise County, Arizona; Horry Region, South Carolina; Haskell and Pittsburgh Counties in Oklahoma; and the Tennessee Sixth Judicial District, covering the city of Knoxville. These were followed in 2003 by contracts for Onslow County, North Carolina, and the Tennessee 20th Judicial District, covering Davidson County and the city of Nashville. The Davidson County contract for $28.4 million involved a fee of 9.82 percent of amount collected during the first year of the contract, and 6.22 percent in the fifth year. On January 2,2004 PSI began administration of child support enforcement programs for Baltimore City and Queen Anne's Counties, Maryland, contracts worth $10 to $15 million.

Principal Subsidiaries

Child Services of Arizona; Dental Health Administrative and Consulting Services, Inc.; Privatization Partners, Inc.; PSI Arista, Inc.; PSI Technologies, Inc.