The Jindal administration received legislative approval Thursday for a $40 million, one-year extension of the state’s Medicaid claims processing contract.
The Molina Medicaid Solutions contract, scheduled to end Dec. 31, already has cost the state more than $420 million over the past 10 years.
And legislators heard that this contract extension request won’t be the last as the administration moves from one private contractor to several to handle the Medicaid Management Information System work. MMIS handles paying Medicaid claims for medical services; enrolling phyisicians, clinics and other providers; and maintaining data, among other tasks.
“I expect to be back next year asking for another one-year extension,” said state Department of Health and Hospitals Undersecretary Jeff Reynolds. “This is a bridge as we move to modernization of our MMIS.”
State law required the Legislature’s health committees to approve extension of the contract beyond 10 years, and then at only one year intervals.
Client Network Services Inc. had been scheduled to fully take over the MMIS functions. But the Jindal administration scrapped the contract in March 2013 amid allegations of impropriety in its award. Then-DHH Secretary Bruce Greenstein previously had been an executive with CNSI. Greenstein has since been indicted by a state grand jury on nine counts of perjury involving testimony about his communication with firm officials before, during and after the contract’s award.
The Joint House and Senate Health and Welfare Committee voted for the contract extension, with only one “no” vote. State Sen. Dan Claitor, R-Baton Rouge, objected to a contract provision limiting Molina’s legal exposure for liquidated damages.
Legislators complained about how late they were being asked to take action — two weeks before the contract’s end — and voiced skepticism that the new multi-contract approach is going to work.
House Health Committee Chairman Rep. Scott Simon called legislators’ concerns and questions “legitimate and resounding.” The Abita Springs Republican added, “This is a heck of a position to be in today.”
DHH sent the revised one-year contract to House and Senate committee staff on Monday via email.
“As an individual, as a taxpayer, more importantly as a representative, I don’t like the way this was handled at all,” said state Rep. J. Rogers Pope, R-Denham Springs. DHH officials knew the contract would have to be extended but yet waited “to bring it here on the 18th day of December,” he said.
Rep. Tom Willmott, R-Kenner, said the committee did not get a copy of the existing contract so it could determine what changes are occurring.
“We could get it to you this afternoon,” Reynolds said.
State Rep. Katrina Jackson, D-Monroe, said she had no problem with the contract renewal. “But I’m very concerned about the approach of the department in updating the system,” Jackson said.
Jackson said the multiple contract route could prove problematic as different functions are spread around.
“Have we seen it work in other states,” Jackson asked.
“Other states have tried different mechanisms,” said Bill Perkins, the Medicaid deputy director.
“Have they been successful?” Jackson continued.
“No,” replied Perkins.
But Perkins added that other states failed because they tried to bring various contracts on line at once but Louisiana will use a staged-in approach — the first state to do so.
Follow Marsha Shuler on Twitter @MarshaShulerCNB. For more coverage of the state capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.