Two firms have filed protests over the selection of a company with ties to state health chief Bruce Greenstein landing a major Medicaid contract, the Jindal administration confirmed Friday.
Challenging CNSI’s selection for a lucrative contract in state government are ACS State Healthcare LLC, in Atlanta, and Molina Medicaid Solutions, of Long Beach, Calif.
Some of the issues raised in the protests track questions and problems raised by legislators in recent days, including possible special treatment given CNSI and how its contract price could be so low.
Greenstein’s ties to the company brought extra scrutiny from senators who subpoenaed records related to the contract award. The senators were especially interested in any role Greenstein had.
ACS alleges that CNSI’s offer did not comply with requirements the state health agency set out in its “solicitation for proposals.” ACS finished second in the competition and asked the state to reject the offer by CNSI, which is based in the Maryland suburbs of Washington, D.C.
Meanwhile, Molina claims state health agency bias involving the firm which currently has the contract. Molina has the current 10-year contract worth an estimated $300 million but finished out of the running as it sought to keep the business.
“We anticipated we were going to get protests” because of the money involved in the contract award, said Steve Russo, general counsel of the state Department of Health and Hospitals.
Russo said DHH has until July 1 to file its response to the protests.
Russo said there will be no contract negotiations with CNSI until appeals run their course at the state level first with the state procurement officer and then to Commissioner of Administration Paul Rainwater. If unsuccessful, the proposers can file suit in 19th Judicial District Court, Russo said.
Greenstein was a health-care executive for CNSI for about a year from 1995 to 1996.
Greenstein took over as DHH secretary in September 2010 as the agency was preparing to put out a solicitation for proposals for the Medicaid claims processing and information systems work.
Greenstein said he distanced himself from the vendor selection process. But Greenstein also said he had suggested a change in the requirements that led to CNSI becoming eligible to compete.
He said the change allowed for more competition and was not designed to benefit his former employer.
Attorneys for ACS and Molina both mention the change in their protest letters to the Office of State Purchasing filed late Thursday — the last day to file a challenge of the award.
DHH had rejected the idea initially, then reversed course “to permit CNSI to meet the requirements to bid on this contract,” Molina’s attorneys with the Baker Donelson law firm wrote.
ACS claimed in its challenge that the move “bestowed an unconscionable advantage to one proposer over the others.”
CNSI submitted the lowest cost proposal of the three vendors competing, far lower than ACS and Hewlett Packard Enterprise Services. CNSI’s cost was $184.9 million; ACS $238 million; and HPES $394 million.
DHH evaluators noted that CNSI’s low price was based on more than 70 flawed assumptions that conflict with the solicitation for proposals or unacceptable to the agency.
The cost price made up 20 percent of the scoring while 80 percent of it was based on how well the companies did in evaluations of their technological abilities to handle claims processing, tracking for fraud and abuse and other system requirements.
CNSI, ACS and HPES had similar technology scores. CNSI received the lowest of them, but its low cost proposal landed it the recommendation, state officials have said.
Molina failed to get the technology score and so could not compete for contract.
ACS’s protest claims that CNSI “excludes significant responsibilities, staffing, and required services from its costing proposal” required by the solicitation for proposals allowing it to submit a lower than market price for the work required.
“By excluding these critical services and staff, DHH could be limited in its ability to conduct Medicaid business and risk acceptance of a less than complete service level, to those most vulnerable of Louisiana’s citizenry,” according to the protest filed by attorneys for Adams and Reese.
Molina also claimed that the consensus scoring system used was flawed, creating “great potential for human bias” and that there was no provision to verify information provided by proposers.
Under consensus scoring, evaluation team members split up into groups assessing various aspects of the proposals individually then came together to come up with a single score.