Chicago Tribune –
By Peter Frost
Illinois is outsourcing part of its Medicaid program to a company that is under a federal grand jury investigation in Louisiana, was disqualified from bidding in Arkansas, was ushered out of Maine and has been the subject of complaints in Utah.
The black marks against the company, including its firing in Louisiana in March, haven’t deterred Illinois officials, who say they are confident of their recently announced plan to use the company’s services through a partnership with Michigan.
Client Network Services Inc., an information technology company based in Gaithersburg, Md., will help Illinois set up an estimated $85 million system to handle processing and other administrative tasks for the state’s Medicaid program, the state-federal health program that covers about 2.8 million people.
The deal was not put out for bid. Instead, Illinois signed an intergovernmental agreement with Michigan, which had an existing contract with CNSI, for the company to begin providing services in 2014.
Both states hailed the novel partnership as an innovative alliance that would save them and the federal government tens of millions of dollars over five years.
Illinois officials said they were aware of CNSI’s well-documented problems in other states, but they made the decision to press on — with reassurance from federal regulators. They added that those issues are not applicable to the company’s performance in Michigan, where it has worked with the state since 2006 without incident.
“We are aware of all of those” problems, said Stephen DePooter, chief information officer for the Illinois Department of Healthcare and Family Services, which manages the state’s Medicaid program. “We talk to Michigan daily, and they do not have any of the issues that other states have incurred.”
Illinois projects that the cost to implement the CNSI-developed system in the partnership with Michigan will be about $85 million, less than half the $190 million price tag estimated to start from scratch.
While the state has not finalized the amount it will pay Michigan each year in maintenance and operation costs, it projects that the venture will reduce its annual spending on those items by 63 percent, or about $60 million, over the next five years and shave as much as 18 months off the time it would spend building a new system on its own.
The federal government, meanwhile, which pays about 90 percent of the costs to implement new Medicaid management systems, stands to save about $196 million, according to state figures.