The Jindal administration put the brakes on another contract for Medicaid program work, questioning the manner in which it was handled by state health agency officials.
The state Division of Administration’s Office of Contractual Review scrapped a proposed $29 million contract with Deloitte LLP, an international accounting firm in New York, to build a new Medicaid eligibility determination system. The state has opted to rebid the pact.
The Medicaid program, funded with federal and state dollars, pays for medical care to those who qualify, mostly the poor. The federal government counted about 1.3 million of Louisiana’s 4.5 million people as enrolled in Medicaid.
The state Department of Health and Hospitals wanted Deloitte to use a Microsoft Dynamics computer program as it developed the system. But the requirement was not included when the agency sought proposals from firms wanting to do the work. That element was added to the contract afterward.
Prior to accepting the state job, former DHH Secretary Bruce Greenstein was managing director of Worldwide Health for Microsoft Corp., the computer programing company in Redmond, Wash. Greenstein also hired Zachery Jiwa, another Microsoft employee, to be DHH’s chief technology officer in October 2010.
Jiwa left DHH in November 2012.
Greenstein resigned last month after it became public that a federal grand jury had subpoenaed documents related to the state award of a lucrative Medicaid claims processing contract. That contract had gone to CNSI, another former employer of Greenstein.
The Maryland-based Client Network Services Inc. does computer-based information technology processes.
“We are doing a comprehensive evaluation of all IT products and services, reviewing some of the decisions made in the past,” interim DHH Secretary Kathy Kliebert said. “We are making a comprehensive evaluation of our IT to make sure the decisions we made were the right decisions ... If we need to change, I will do that.
“I can’t answer why did we choose (Microsoft Dynamics) over something we already had,” Kliebert said.
DHH is consulting with state Inspector General Stephen Street’s office as part of its review of the procurement process and evaluation of IT products and services.
Kliebert said DHH has 109 different computer applications used across DHH agencies. The idea was to come up with a common system that could be used for “care management” so information could be accessed and different programs could talk to one another and transfer information, she said.
The governor’s Division of Administration stopped the award of the Medicaid eligibility system contract when its contract reviewers noted that the original request for proposal included a preference for what is called a “.net” solution, but the contract under review called for Dynamics, which is a Microsoft proprietary system.
DHH purchased Microsoft Dynamics software in June for $1,285,185.47. The “.net” is what is referred to as an open source or free Microsoft platform.
“As a result of our review, we determined that contract approval could not be supported,” Commissioner of Administration Kristy Nichols said.
DHH had asked for an additional requirement for the system that was outside the original scope and that situation warranted a new “request for proposal” process by the state, would incorporate the new element, she said.
Nichols directed DHH to issue a new request for proposal, which is the process state government uses to start the bidding process to decide which company will be contracted for the services.
DHH has a contract with Redmane Technology LLC, of Chicago, to maintain and support the current eligibility system. The $7.7 million contract began in May 2012 and is scheduled to run until April 2015.
Deloitte bid $29 million over a three-year contract on the work to build a new Medicaid Eligibility Determination System.