A company with ties to the state’s health secretary low-balled the cost it gave for handling the state’s Medicaid claims processing work, a competitor alleged in a protest of the contract award.
ACS State Healthcare, one of the competitors, claims in recently filed documents that CNSI stated it would perform certain required work, then failed to budget personnel and dollars to do the jobs the contract required.
State officials have said repeatedly that CNSI’s low price tipped the scales toward the Maryland company winning the contract.
ACS also said in its protest that CNSI did not comply with requirements that had been spelled out in the state Department of Health and Hospitals “solicitation for proposals,” which had the effect of lowering potential costs.
“CNSI’s proposal constitutes a gross underestimate of what a prudent fiscal intermediary would incur to fulfill its obligations,” attorneys for ACS, with headquarters in Atlanta, wrote.
ACS spelled out specific deficiencies it claims exist.
CNSI 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.
A fourth firm, Molina Medicaid Solutions, of Long Beach, Calif., the current contractor, did not score high enough on the technical front to compete further.
ACS and Molina both filed contract award protests with the Louisiana Office of State Purchasing earlier and supplemented those filings by Friday’s deadline.
Department of Health and Hospitals Secretary Bruce Greenstein was an executive with CNSI from 1995 to 1996.
Greenstein said he distanced himself from the contract award process. But Greenstein said he suggested a change in the solicitation requests that made CNSI eligible to participate. He said it was aimed at getting more competition, not to help his former firm.
In its latest filing, Molina alleges that DHH’s “solicitation for proposals” violated federal civil rights law by disqualifying certain people from performing work.
A provision “clearly discriminates against existing disabled employees,” attorneys for Molina wrote.
Earlier, Molina had alleged DHH bias against the firm.
Department of Health and Hospitals and CNSI have until Wednesday to file written responses to the protests.
A call placed to CNSI’s corporate office was not returned Monday. Lisa Faust, DHH’s communications director, said the agency will file its response by the deadline.
Department of Health and Hospitals documents released under a legislative subpoena showed that evaluators noted CNSI’s proposal had more than 70 assumptions that conflict with state expectations of the job required.
However, DHH evaluators said the company had agreed to meet the price it quoted and they had accepted that assurance. DHH officials said they would hold the company to the price quoted or it wouldn’t get the job.
ACS’ updated protest said that CNSI barely reached the technical score required to compete — coming in third among the viable vendors — and only finished first because of its low cost offer.
Choosing the lowest cost offer runs counter to DHH’s stated intent that the “price should not be the determining factor,” ACS lawyers wrote.
Under state law, the four ACS lawyers wrote that the state is not bound to take the lowest proposal, “but instead the lowest responsible proposer to ensure that Louisiana’s most vulnerable citizens are not bound to a provider whose proposal cannot withstand fiscal scrutiny.”
“The policy of fostering effective competition was not realized because CNSI’s numerous incomplete, ignored and flat incorrect submissions as part of its proposal, nonetheless enabled it to ‘game the system,’ in contravention of the Procurement Code,” wrote the team of ACS lawyers.