Firm defends Medicaid contract

BATON ROUGE (AP) — A top official with the Maryland company whose nearly $200 million Medicaid contract with the state has been cancelled said the firm has never been contacted as part of an ongoing federal probe into the contract award.

Larry Iversen, the CNSI executive who oversaw the company’s Louisiana contract, defended the way CNSI was chosen for the lucrative deal, and he said Thursday he has no idea why the contract award is under investigation by state and federal officials.

“We have not received any information to explain it,” Iversen said, sitting in CNSI’s nearly vacant office in Baton Rouge.

Iversen said the company received the 10-year contract for Medicaid claims processing and bill payment after a fair review process by the state Department of Health and Hospitals, not because Gov. Bobby Jindal’s health secretary Bruce Greenstein once worked for CNSI.

“We were in conversations with state leadership about being a bidder before Bruce Greenstein ever became secretary,” Iversen said.

“We know that we went through this process appropriately, and we know that it was awarded appropriately based upon independent scoring by 60 different people on 11 different teams,” he said.

The Jindal administration terminated the state’s agreement with CNSI three weeks ago, after details leaked about a federal grand jury subpoena to the governor’s Division of Administration requesting all documents submitted by companies that bid for the work.

Greenstein, vice president of CNSI from 2005 to 2006, is resigning amid the ongoing investigation, though he’s denied any involvement in the contract award.

The Louisiana attorney general’s office has said the contract was improperly handled and is conducting its own investigation. The head of the office’s public corruption unit said there was inappropriate contact between CNSI and DHH employees, among other issues.

When the Medicaid contract was awarded two years ago, Greenstein acknowledged under questioning from lawmakers that a decision he made in the bid solicitation process made CNSI eligible for the contract. He also met with a top CNSI official within days of taking the health secretary’s job.

Iversen called that decision a clarification that confirmed CNSI could be eligible as the primary contractor on the work. He said if DHH officials had made a different decision, the company still would have bid on the job, just as a subcontractor for another firm.

CNSI won the contract in 2011, beating three other companies. Critics said the company underestimated the true cost of the job and made incorrect assumptions to win the bid. CNSI submitted the lowest bid, but didn’t get the best technical score among applicants.

Iversen said the bid was based on models from similar Medicaid work CNSI has done in other states like Michigan, and he said the difference in technical scores was fewer than 90 points on a 4,000-point scale.

He noted that unsuccessful bidders protested the decision and the Division of Administration upheld the award to CNSI, and he provided a February letter written by DHH Undersecretary Jerry Phillips in which he praised CNSI’s work.

“DHH was pleased with what we were doing,” Iversen said.

CNSI was supposed to take over the Medicaid work next year and had been building the computer system to handle the complexities of claims processing and analyzing billing submissions for fraud.

Iversen said with the work stalled, Louisiana is set back five years in improving its Medicaid billing technology.

“That is a tremendous loss in my opinion for the state of Louisiana. From a monetary standpoint, it’s going to cost tens, if not hundreds of millions of dollars in lost opportunity from efficiencies,” he said.

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