State considering how to bid contract

The Jindal administration is changing directions in efforts to replace CNSI as the state’s Medicaid claims processor.

The state is soliciting information from potential vendors as it prepares to crafting a “request for proposal,” the first step towards awarding a private company the most lucrative contract in state government, project coordinator Ruth Johnson said Thursday.

Under the current time line, the state won’t seek proposals until December 2014 and various facets of the work could be split up among vendors instead of relying on one, she said.

In the meantime, Molina Medicaid Services continues to process and pay claims filed by doctors, hospitals and others who provide services for patients covered by Medicaid, the government health insurance program for the poor. Molina was scheduled to be replaced this year by Maryland-based Client Network Services Inc.

The Jindal administration canceled CNSI’s nearly $200 million contract last spring after news broke of a federal grand jury investigation into the contract’s award. Soon thereafter, Bruce Greenstein — who had once worked for the firm — resigned as secretary to the state Department of Health and Hospitals. A state grand jury investigation also began. CNSI officials and Greenstein have denied wrongdoing, and CNSI sued for wrongful contract termination.

In September, only one company submitted a proposal to help the state decide what kind of system it needs for Medicaid claims processing and eligibility determination for the more than $7 billion government health insurance program for the poor.

State health agency officials decided to reject the proposal from First Data, of Atlanta, to provide what is described as “staff augmentation.”

The new direction comes in response to guidance state health officials are getting from the federal Centers for Medicare and Medicaid Services, said Johnson, who is special adviser to the state Division of Administration. “We are going to do this in a way that’s transparent and encourages competition to the greatest extent possible. We want to have the best system the feds and our budget will allow,” she said.

Today, Molina handles claims processing as well as other clinical management aspects. DHH is seeking information so it can evaluate whether functions — such as data warehousing, electronic health records, and Medicaid eligibility determination — can be done by separate entities. DHH wants to know what aspects of the Medicaid program the vendor would be interested in providing services for, how the potential vendor would handle the work, the resources they would need as well as timing to accomplish and their experience.

Johnson said the information will help the administration craft a proposal or proposals as it looks at the pros and cons of different approaches “and we know the options out there ... We want to see if there are small vendors to do certain components so we can get the best brand.”

Vendors have until Jan. 31 to respond.