Louisiana’s health agency Wednesday rejected claims that the firm chosen to get the lucrative state Medicaid processing contract failed to meet requirements.
Also, CNSI will be held to the low price quote that helped land them the work, wrote the lawyer in two letters outlining the state Department of Health and Hospitals’ position on the protests to CNSI winning the contract.
The protests were filed by two of the three firms that had competed with CNSI for the 10-year pact that has brought the current vendor about $300 million. The two DHH letters were sent to the Office of State Purchasing, which much sign off on the contract.
Filing protests were ACS State Healthcare, of Atlanta, Ga., and Molina Medicaid Solutions, of Long Beach, Calif. A third company, Hewlett Packard ES, of Plano, Texas, did not contest the contract award.
CNSI, based in Gaithersburg, Md., submitted a $184.9 million cost over the 10-year contract period. ACS came in second on price at $238 million while Hewlett Packard ES was the highest cost at $394 million.
Molina, the current contractor, did not score high enough on the technical front to compete further.
DHH Secretary Bruce Greenstein worked for CNSI in 1995 and 1996.
In its protest, ACS claimed that CNSI intentionally low-balled its cost by indicating it would perform certain required work, then failing to budget personnel and dollars to do the job. ACS also said that CNSI did not set out ways it would meet contract requirements in some cases.
Writing for the state health agency, Donna Adorno, DHH deputy general counsel, urged state procurement officials to deny the protest. She argued in a letter that the evaluation of the proposals was conducted according to specifications of the “solicitation for proposals,” known as SFP, and that legal requirements were followed.
Specifically, Adorno wrote that ACS complaints were ill-founded. “In order to enter into a contract with DHH, CNSI will be bound by its technical proposal to provide all services therein and in the SFP and by its cost proposal to perform all the services at the price proposed, excluding unacceptable assumptions in its cost proposal,” Adorno wrote.
She stated that even if all assumptions used to calculate the price quoted prove incorrect, CNSI “has guaranteed to provide all” the services outlined in the SFP.
Documents previously released under a legislative subpoena showed that evaluators for the agency found more than 70 assumptions in the CNSI proposal that did not jive with the solicitation for proposals or with which DHH disagreed.
Adorno wrote DHH followed routine practice of having technical experts review the technical facets of the proposals while financial experts handled the fiscal evaluation. The procedure to be used was spelled out in the “solicitation for proposals,” and no one objected, she said.
While ACS complained that DHH emphasized cost too much, Adorno stated 80 percent of the scoring was technical, while 20 percent was financial.
CNSI scored lowest on the technical front, but its low price offer tipped the scales for the DHH award. “Cost must have a part to play in such a large and expensive undertaking,” Adorno wrote.
Molina alleged DHH altered requirements during the procurement process to allow CNSI to compete.
In response to Molina’s protest, Adorno wrote that the company’s allegations of bias “have no basis in fact.” She also said DHH evaluation teams scored Molina based on its response to the solicitation for proposals not the existing Medicaid claims system that it operates.
Adorno also wrote that changing the requirements during the proposal — as DHH did to make CNSI eligible to compete — “is not at all uncommon.” She wrote that Molina did not protest the move at the time.