Even as he was tweaking the bid specifications that would qualify Client Network Services, Inc. (CNSI) to submit a proposal for a $185 million contract with the Department of Health and Hospitals (DHH), Bruce Greenstein must surely have known of problems his former employer had experienced in other states.
In a related story, LouisianaVoice has learned that James Gorman, a senior technical advisor for the Center for Medicare & Medicaid Services (CMS) founded a company, HWT, a subsidiary of OptumInsight, a “trading partner” with Bayou Health, the program through which most of Louisiana’s Medicaid recipients receive health care services.
CMS is a federal agency within the U.S. Department of Health and Human Services (DHHS) which is charged with working in partnership with state governments to administer Medicaid. CMS must also give its stamp of approval on state contracts with companies such as OptumInsight and CNSI.
Greenstein worked in Seattle for Microsoft prior to his being named DHH Secretary by Gov. Bobby Jindal in July of 2010. Prior to that he also worked for the U.S. Department of Health and Human Services (DHH) where he oversaw the state Medicaid programs in the Northeast. He led the federal government’s efforts in working with states in reforming state Medicaid programs—a position that would have afforded him intimate knowledge of the workings of companies like CNSI, OptumInsight and others.
Then-DHH Secretary Greenstein awarded but then refused to identify CNSI as the winner of the contract a year ago. His refusal threatened his confirmation by a Senate committee before he finally relented and named CNSI.
Greenstein worked for CNSI in 1995 and 1996. He told the Senate committee that he had constructed a “firewall” between him and CNSI so that he could not influence the awarding of the contract. But emails obtained by the committee revealed that Greenstein and CNSI executives exchanged dozens of emails during the selection process.
Protesting the award at the time were unsuccessful bidders ACS State Healthcare of Atlanta, Ga., and Molina Medicaid Solutions of Long Beach, Calif.
ACS claimed that CNSI deliberately low-balled its cost. CNSI subsequently obtained a $9 million amendment, increasing the cost to $194 million and then requested an additional $40 million immediately prior to word that the FBI had subpoenaed all CNSI records from the Division of Administration.
Had the second amendment been granted, the cost would have been close to the $238 million bid of ACS but the CNSI contract was cancelled by the administration as a federal grand jury investigation got underway. That investigation is still ongoing.
While at CNSI, Greenstein was vice president for Healthcare. While there, he focused on state healthcare systems and claims payments and vital records systems.
Given his experiences with Medicaid systems and given the fact that he resided in Seattle at a time when CNSI was experiencing a multitude of problems with its system in Washington, it’s difficult to imagine that he was unaware of problems the company was having when he “tweaked” the bid specifications to accommodate his former employer.
In 2006, CMS launched an investigation into ongoing problems with the State of Maine’s web-based information management system. CNSI was contracted for that work in 2001 at $14.5 million, but the costs quickly escalated to $70 million as complaints began coming in almost immediately. CNSI had never built a Medicaid billing system before landing the contract with Maine and the company missed its 2002 deadline for completion as well as several subsequent deadlines. Even after the system finally went live in 2005, it malfunctioned and for more than a year the state had to send out estimated payments to Medicaid providers.
After only three days it was learned that the new system had sent 24,000 claims (about 50 percent of all claims) into a “suspended” file.
Normally, suspended claims were those that were either rejected or which contained minor errors. The original system had suspended only about 20 percent of the claims.
Now, instead of payments, doctors were receiving no payments and when they resubmitted the claims, the new system installed by CNSI automatically rejected them again because it was programmed to reject any claim it had already rejected.
Claims had to be processed by hand by state employees but they could process only 1,000 claims per week. Even when the rejection rate was reduced to 20 percent, doctors complained that it was still rejecting legitimate claims.
Doctors, dentists, hospitals, clinics and nursing homes received no payments for services for weeks at a time and some practices were forced to close their businesses or to take out loans to pay their bills.
The experience was much the same in Washington State where hundreds of thousands of claims went unprocessed, causing some doctors and clinics to cease taking new Medicaid patients until they got paid for the ones they’d already treated.
Glitches in the CNSI system resulted in the suspension of thousands of claims which, like those in Maine, had to be processed by hand. By November of 2010, there was a backlog of about 271,000 suspended claims.
One medical center said the state was about $3.8 million behind in payments.
A CNSI spokesperson attributed the problems to managerial mistakes and not deficiencies in the product. “We did not understand the magnitude of such an implementation,” he said. That would seem to be an understatement as the original contract cost of $71 million ballooned to $164 million.
In Michigan, a 2006 three-year, $51.5 million contract was amended no fewer than five times and the contract amount currently is $227.2 million.
And now, the State of Illinois, in an apparent effort to circumvent public bid laws, has entered into an interagency agreement with Michigan to create a shared Medicaid Management Information System (MMIS) to serve both states with CNSI getting the contract for both states.
One of the common threads connecting Illinois and Louisiana is OptumInsight, which reported $1.3 billion in corporate revenues in 2008. OptumInsight has a contract with Illinois to administer its MMIS exchange.
Besides serving as a “trading partner” with Bayou Health, OptumInsight is a wholly-owned subsidiary of UnitedHealth Group. UnitedHealth Group, in turn, offers benefits through two companies, UnitedHealthcare and Optum. UnitedHealthcare has an $83 million consulting contract with DHH to provide enhanced primary care case management. Bringing things full circle, Optum has three operating divisions: OptumHealth, OptumRx and OptumInsight.
If all that is confusing to you, don’t feel bad. The question is how difficult will it be for the federal grand jury to sort all this out so that it can make a determination of whether or not any laws were broken with Louisiana’s contract with CNSI?
A second, even more interesting question is why did the Jindal administration, in cancelling the CNSI contract, issue the self-serving statement that it would not tolerate corruption when there has been no trial or even any formal charges filed?
Third, and most important of all, if Jindal is so intolerant of corruption, why did he allow Greenstein to “resign,” but remain on the job for an entire month before his departure?
It would seem at this point that the answers to all three questions lie with Greenstein and those answers may well rest on what kind of deal he can make with federal prosecutors—depending, of course, on whether the investigation reaches the point of indictments.
Hey Senator Scioneaux,
Here’s another one that one should know about. Remember me telling you about CNSI??
Tom;
Amazing reporting. I think your three questions are indeed questions that we all need answers to. It will be interesting to see how well Greenstein can sing.
Thank you for making sense of probably one of the most confusing (probably intentionally) stories I have read in a long time.
MSD
Please write an article on Alan Levine. I just saw him interviewed on 60 minutes, and he and his company, Health Management Assoc were nailed. this is another example of the terrible, unethical people Jindal had hired. A movement must start to recall Jindal Thanks for you work, Joseph Biundo
No matter what, he was accomplishing something Jindal wanted: the crippling of Medicaid providers. If they don’t get paid, they can’t take patients. No patients, and Jindal crows about cutting Medicare/Medicaid costs.
Precisely the point! Jindal is not in office to do the right thing. He has mis-used and anused the authority of his office to wield power to his benefit and the benefit of his supporters. Citizens of Louisiana are nothing more than pawns in his game.
The same thing is happening in DCFS. New “technology”, courtesy of Xerox, is crippling the agency to the detriment of public assistance recipients and state employees. Benefits are not being issued timely (which is a federal requirement) and cases are being closed due to problems with the new document processing center and associated computer programs. Employees are doing double work to undo the mess because the crap doesn’t work as advertised. Of course, officials are on top of it, ha.ha.ha. They polish that turd daily. Jindal doesn’t care about public assistance recipients or state employees so he kills two birds with one stone and probably gets a kickback too in the form of a contribution.
Why would a company that has failed in one, two, et al., states be picked up by other states to repeat their failure? Aren’t there other companies with good ratings available? Does it makes one wonder how many times does one need to be led by someone that is dead set on destroying Louisiana? Is that what Louisiana legislators are – unable to investigate a company, unable to learn a lesson and unable to be independent of a governor hell-bent on destroying Louisiana? Does anyone believe Jindal will remain in Louisiana after he leaves office? Hopefully, he will leave and take his puppets with him.
“Does anyone believe Jindal will remain in Louisiana after he leaves office?”
Great question! Less than a thousand days…
Sometimes even a day feels like an eternity.
Regarding Jindal leaving Louisiana – and it can’t happen fast enough – is just where will the little s—- end up? Which federal prison? Or perhaps one of ours, where he has abused employees for years. Because that is where he belongs and we can hope that as a result of the important work represented on this newsblog, he will receive the reward he has earned and so richly deserves.
What’s Jindal’s game plan? Medicaid recipient patients, doctors, hospitals, state employees all are getting hurt. Out-of-state claims processors are getting rich by fraudulent tactics. So what is in it personally for Jindal? I just can’t figure it out. Can you help with this question?,
Perhaps he, like Hitler, may be trying to cleanse the state. In doing that, look at all the openings and advantages that would be available. Thinning the population is one way to have an elite society. Could be taking lessons from his former foe, i.e., david duke.
The Hitler comparisons age becoming more frequent on these blogs and it’s very disconcerting, Do a little research and the comparisons – not to mention the physical resemblance – are uncanny. Being so uncomfortable in their own skin that they would carry out the ubermeisters’ heinous agenda (so the real power is not tainted with the accusation of wanton destruction of “undesirables”) in a pathetic attempt to gain their favor…right down to being a false Catholic.
People can be eliminated in far more subtle ways than ovens and we are witnessing that process. Using proven incompetent contractors to deploy systems also proven to not work results in withheld medical and mental health services…It’s not just CNSI, check out the massive Magellan contracts. Destruction of educational systems…starving people who reside in state-operated facilities by firing the state food service workers and allowing contractors to feed less than starvation rations and pocket the profit, while attempting to silence the state employees who are begging the “leadership” to monitor contracts and force the profiteers to do the jobs they are legally bound to do when they take the money….
We had better figure out a way to get out of the grip of evil before a thousand more days (tls0) go by.
Great post and great comments, too. I had the exact same thought as “No name please” right off the bat, I. e., since CNSI has a clear record of blowing projects, low-balling bids, byzantine organizational structures geared to cover improper/conflict of interest relationships, etc., why/how do they keep getting contracts? Perhaps a related question might be: Who’s minding the store? DHHS? CMS? Nobody in a direct line to do so, here or nationally? Must we rely on the U. S. Justice Department to slooooooooooooooooowy address these issues, giving the parties involved ample time to hide assets, engage in further cover-ups, maybe even disappear?
Tom I sure hope you are at the re-vote by the Civil Service Commission. Lord knows we need you there. Thank you for such great reporting.
As all the king’s horses and all the king’s men fall by the wayside, hopefully criminally charged. Who will clean-up the state and put it all back together? It seems to be unraveling at warp speed, with so many strands hanging out; where does one begin? When one strand is pulled out and snipped, another re-appears. Confusion is the key. With journalist like Tom, the voters can keep track of these evil, self absorbing, taxpayer cheats, professional rip-off con- artists. Thanks Tom.
@A Jindalized Citizen
His gameplan is to accumulate statistics that will play to the national far right base. The problem is that they are false numbers. Decimating the state’s resources, i. e., state workforce, property, retirement systems, and spinning them as government reform does not tell the real story.
Of course the methods he uses to create these false numbers are even more telling. Case in point: the mental hospitals. As you will recall, we now have only two after the third was closed in a most underhanded manner. In the last several months, hospital leadership has been replaced with career OCDD people (Office for Citizens with Developmental Disorders), a sister agency under DHH, but with a completely different purpose and culture. This includes the heads of the two mental hospitals, the director immediately above them, and the interim DHH Secretary. Reminds me of the Chinese government’s response at Tianamen Square. They brought in troops from another province who spoke a different language, to lessen the chance of the soldiers becoming sympathetic with the protesters.
SR is correct. DCFS’s project has its issues. I think a letter was written to state purchasing explaining the issues prior to the appointment of our new procurement director. Not sure how you address them and not show bias. Most projects fail. Why don’t they contract out and demand success before moving forward? these large, unsuccessful projects are killing the state.
The success should come before the multi-million dollars contracts are paid out on these projects, and just as state employees work 3 weeks before receiving a full paycheck, let them work a period of time to see if they are successful and knowledgeable about the project, otherwise, get rid of them!! They should be made to prove themselves and only receive payments as a contractor building a house in increments, instead of the millions up front with little oversight. The governor wants to run the state as a business, begin by treating these contractual companies as employees instead of a relative or a friend. Follow the rules with stipulations to adhere to same with no amendments, adjustments, etc., to the contract. The state has been in this business long enough to know the rules, Jindal needs to quit trying to change the rules and follow the law of the contract.
Xerox at DCFS? And now Jan Cassidy is the procurement “director”? It never ends, does it?
As someone who is intimately familiar with the MMIS contracts in many states, every current provider of MMIS (Xerox, HP, Molina, and CNSI) has failed in one or more states. Currently, Xerox is so far behind in 5 states that they are in breach of contract. However, these contracts are so huge and confusing that to back out would set the state back 4-6 years. The problem is two-fold: first is the technology in place is on average 17 years old and secondly, the states/CMS create such a complex labyrinth of regulations that there is no one system that can provide “quick” turns AND eliminate waste, fraud, and abuse.
So, it sounds like we are in a lose-lose situation. No contractor is capable of doing what needs to be done and the system is not becoming simpler. Another strong argument for a single-payer system or, at the minimum, a much simpler one – Look at what other civilized countries are doing. Why can’t we be as good as France, for example? We brag that we have the finest healthcare available. Whether we do or nor, we certainly have nowhere close to universal access to it and no means to monitor and manage what we do have.
I agree there needs to be a complete review of the contracting process, Not just DHH MMIS/CNSI project, but any contract that requires millions of our tax dollars and impacts over 25% of our state’s population for the next 20 years. The people of our state keep hearing that “tweaks” were made to the bid requirements so that CNSI would be qualified to bid. “Tweaks” is a very ambiguous word. Both the state government and news media should be pointing out specific changes that were made in order for CNSI, or any other company, to be considered a qualified vendor It would be interesting to know why the two contract amendments were requested. Were theses services in the original RFP, and left out of the final bid? Was there a change in scope of work? Answers to these questions will help determine if CNSI low-balled the bid, or would these contract increases would have occurred regardless of which vendor was selected.
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The CNSI Medicaid (MMIS) application and methodology is technologically sound. Their development process is intense and follows CMS guidelines. When the application is finally installed, it works as advertised. If it does not, it is more than likely faulty information provided to CNSI during the development process. Overall, it is a cost effective approach that far surpases it’s competitors. Look at ACS in NH or CSC in NC. CNSI’s results are better..
I suppose it’s easy to say CNSI’s results are better and more cost effective if you conveniently ignore the incredible cost overruns and the backlog of claims processing. I think you unknowingly hit upon the key when you used the term “finally installed,” because that seems to have been a problem that has been repeated from state to state.
http://m.bizjournals.com/baltimore/news/2013/05/07/cnsis-louisiana-woes-not-expected-to.html?page=all&r=full
Ouch! CNSI filed suit against the State of Louisiana for breaking their contract:
#Marylandpresseson
[…] to unleash a massive amount of information online showing the corruption including how one of the managers had business ties in a company that was being awarded tens of million of dollars as part of the $190,000,000 MMIS […]
[…] to unleash a massive amount of information online showing the corruption including how one of the managers had business ties in a company that was being awarded tens of million of dollars as part of the $190,000,000 MMIS […]
There are doing the same thing in Illinois!
http://edgarcountywatchdogs.com/2013/06/its-your-money/
http://edgarcountywatchdogs.com/2013/07/dedicated-response-to-cnsi-senior-vice-president-legal-counsel/
BTW – If you work for CNSI you have no business posting to this unless you can provide real facts with documents to prove your position. If you work for CNSI and know of the corruption, please contact Edgar County Watch Dogs with any information you can share.
I don’t work for CNSI but this is a blog and people can present reasonable opinions should they so desire, same goes for CNSI employees if they disagree or agree with your premise. I think I will wait for the lawsuits to be resolved and see what the courts say.
Hello Bobby is that you? With all the documentation presented against CNSI, across these United States, you still think, they, (CNSI) is doing a good job? Perhaps, you mean, against the taxpayers of each of the states involved, ripping them off for profit. Yes, I see your point! Profits on the back of taxpayers, political career advancement, collateral damages, as the poor, sick, elderly, mentally challenged, physically challenged, and those responsible for their welfare, and quality of life. Indeed.
[…] Tom Aswell, a blogger and author from Louisiana with more than three decades of news experience. Aswell has been writing about the case from the […]