Nov 3, 2022 - Politics

Inside the messy rollout of Kemp’s $350 payments to Georgians

Photo illustration of Governor Brian Kemp next to Georgia cash card and surrounded by various shapes

Photo illustration: Sarah Grillo/Axios. Photo: Kevin C. Cox/Getty Images

Axios and the Atlanta Journal-Constitution, which are jointly owned by Cox Enterprises, collaborated on this story.

The rollout of Gov. Brian Kemp’s cash payments to millions of low-income Georgia residents and families has been a mess for many from the outset. For nearly two months Georgians have reported they’ve had transactions declined, cards suspended and even the money stolen before it could be spent.

Why it matters: Kemp’s office said the plan — which uses federal COVID aid dollars — was designed to help people “cope” with the pandemic and record inflation. But nearly a dozen recipients have told Axios and AJC reporters the state has struggled with the rollout, leaving many resorting to giving each other advice on social media about how to troubleshoot problems.

  • Separately, two legal experts tell Axios and the Atlanta Journal-Constitution that the administration of these payments violated federal data privacy regulations — something the state denies.
  • “We can’t hardly make it day-to-day” already, said Christy Teel, a recipient from Carrollton who reported most of her children’s money stolen. And now, not getting the anticipated money “puts everybody in another struggle, in another mess,” she said.

Driving the news: The state Department of Human Services (DHS), which administered the payments through a third-party vendor, reports that $1 billion has been sent to 3 million Medicaid, SNAP, TANF and/or PeachCare for Kids recipients. But just under half of that money has been successfully spent.

A joint Axios/AJC investigation found:

  • Since the Sept. 20 launch, DHS' Facebook page has been inundated with tens of thousands of complaints about declined transactions, suspended cards, or stolen funds.
  • The state has blamed electronic phishing attacks, though some interviewed insist they never clicked on phishing messages. The state says stolen money will be refunded.
  • Two legal experts say the state’s sharing of federal beneficiaries’ data with a vendor violated Medicaid confidentiality rules, which restrict states’ usage of the information. The state argues they could use it for this purpose because the COVID relief law encouraged support for low-income Americans.
  • Additionally, it’s unclear whether these payments will count as income that could affect people's benefit eligibility. DHS told Axios and the AJC that they wouldn’t, but a Centers for Medicare & Medicaid Services (CMS) spokesperson said the federal agency is still "evaluating" the question.

The intrigue: Some recipients have complained that the rollout appeared rushed for political gain as money was released in the months ahead of the midterm election.

  • “This is a stunt,” Chanae Forrest, a day care teacher from Newton, claims. “You did this right before election time. ... You’ve been sitting on this money for how long?”

What he's saying: Kemp, whose name is prominently featured on the cards, said in an interview that while there may have been "a bump or two," overall he's happy with the rollout, especially since much of it has been largely through digital payment cards.

  • "For that population, for us to be able to communicate with them [digitally] and do benefits and other things in the future, it's going to make state government and their lives a lot more efficient," he said.

The other side: “Bumps? There have been mountains and foothills. Great hurdles to go over. I would not call it bumps,” Forrest said. She ultimately was able to use the money for herself and her two children, but only after spending more than a week trying to get the state to unsuspend two of the cards for nonexistent fraudulent charges.

  • “Everybody I know who was eligible for it had some sort of issue,” she said. “It’s like throwing somebody a life preserver but the line is too short.”
  • Amanda Brannon of Warner Robins was able to claim her payment after delays and confusing declined transactions, calling the rollout "disrespectful and unnecessary chaos.”

Privacy

To administer the money, the state shared beneficiaries’ names, addresses and dates of birth with a third-party vendor.

Between the lines: Kemp specified the payments would go to those enrolled in major benefit programs like Medicaid, SNAP and TANF, which are federal programs that the state administers.

  • But the data related to those beneficiaries is owned by the federal government.
  • According to federal regulations, state Medicaid agencies must restrict use or disclosure of applicant and beneficiary information “to purposes directly connected with the administration of the plan," the CMS spokesperson confirmed.

What they're saying: David Super, a lawyer and legal scholar at Georgetown University who has specialized in Medicaid, said the program “clearly violates the privacy protections in the Medicaid law."

  • Josh Norris, a Decatur attorney specializing in Medicaid law, agrees.
  • Because the payments are not related to Medicaid eligibility or benefits, federal regulations require permission from individuals to share their information, they explained. The state did not get written permission from beneficiaries.
  • "While providing cash benefits to people in need may be a laudable goal, you’ve still got to follow the law and respect people’s privacy," Norris said.
  • "You don’t get to just say to people: ‘Well since you’re not well off and we want to help you out, we get to violate your confidentiality,'” he said. “It's not how this works. It violates basic human decency."

However, DHS said that before the contract was executed, the agency and the Department of Community Health independently reviewed the issue for legality and determined that the state may use and disclose data without written permission from Medicaid members.

  • “Specifically authorized by Congress and federal regulations, direct cash assistance is a desperately needed service for our state’s most vulnerable citizens, who are grappling with forty-year-high inflation and struggling to make ends meet due to the negative economic impacts of COVID-19,” DHS Commissioner Candice Broce said in a statement.
  • “After a thorough review of applicable law and rules, the State of Georgia developed this innovative program with safeguards in place to deliver immediate financial relief to families facing high gas prices, grocery bills, healthcare expenses, and utility bills.”
  • Broce pointed out that many Georgians are using these funds to cover necessities like hearing aids, dental care, eye doctor visits, and similar health care expenses.

But, but, but: Super said because the payments are not Medicaid payments, federal privacy rules still apply to DHS's administration of the $350 cards.

  • CMS did not respond to questions about the Georgia program specifically but confirmed that state Medicaid agencies are indeed bound by federal confidentiality requirements.

Threat level: Kemp said he wasn’t aware of specific data regulations, but said that if the federal government wants "to come after us for trying to help people deal with their 40-year-high inflation, bring it on."

Flashback: In 2017 the state Division of Family and Children's Services violated these regulations by sharing some beneficiaries’ data with a nonprofit. At the time, the state said it would work to “prevent future unauthorized disclosures.”

Scammers

Amid broad advertisement and media coverage of the payments, DHS says scammers may have sent emails impersonating the state, prompting recipients to put in their personal information and enabling them to steal the funds.

It's not publicly known how many recipients have had trouble, but DHS says the "overwhelming majority" of people spent the money without issue. However, the state did not provide information about how much money has potentially been stolen, nor statistics on suspended cards or declined transactions.

Zoom in: Deiondra Ramsay of Calhoun said she received two cards for her kids and one for herself. She initially was able to spend more than half, but by early October, she said, the rest had been stolen and her account has been locked for weeks.

  • “I haven’t heard anything,” she said. “It’s just been a big mess.”

Christy Teel, a Carrollton mother of four, said she spent most of one of her children’s cards but had funds stolen from three others – including through apparent in-person transactions by someone else at a Massachusetts Apple store.

  • She said she has been “shocked” by the rollout and added she feels that if this was designed to be a political win, it has backfired.

DHS has warned recipients about social media accounts impersonating state staff and asking for information like Social Security numbers. The state also said the phishing could have happened through other websites and that it’s possible people previously impacted by different data breaches are just now being exploited.

  • Kylie Winton, a spokesperson for DHS, said the state is collecting data through their card-specific call center and “directing people to report fraud to, and working with law enforcement as warranted to confirm instances of fraud tied to various phishing and related schemes to steal or misuse someone’s information.”
  • The state has reported “numerous” fake accounts and pages, Winton said, some of which have yet to have been removed. When fraud is confirmed, the state says money will be refunded.

Yes, but: Ramsay and Teel said that they never clicked on phishing emails. “That's the thing that gets me is they think that everybody's clicking on something, and that's not the case whatsoever,” Teel said.

  • Ramsay said now she's worried that her family’s private information has been compromised.

Of note: DHS says that recipients who believe they have been a victim of identity theft or stolen money should file a police report and call the state at 1-833-907-0683.

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