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July 20, 2024

Dedicated Response to CNSI Senior Vice President-Legal Counsel

By Kirk Allen & John Kraft

On July 2, 2013

We welcome comments from the public and especially comments from Kathryn Harris, a Senior Vice President and Legal Counsel for a company referenced in our recent article here.  We took the time to respond with facts and evidence collected by our investigation team.

As counsel at CNSI, I think it is important to address the misinformation in this piece, and by extension, in Mr. Aswell’s Louisiana blog”.

It’s important to address misinformation and when addressing any perceived pieces of misinformation in my writing and by extension the writing of anyone else, please designate which writing you’re addressing so the readers know.  Co-mingling a response to different articles is a tactic used by design to confuse readers.  

 “CNSI is a mid-sized cutting edge Health IT company in a field dominated by a few well entrenched mega companies. Our ability to innovate in the Medicaid industry is a threat to many of the larger companies in this space. So attacks against CNSI are not surprising, but false or misleading statements about any company need to be corrected”.

We don’t attack companies; we are not helping someone in the marketplace, and report facts as we find them.  We agree there is no place for false or misleading statements in any reporting, nor does it have any place in a response to such reporting!

 Let’s look at the facts.

You stated “CNSI sued the State of Louisiana because CNSI’s contract with the State of Louisiana was terminated hastily, without notice or cause, ….”

Let’s set this straight.  CNSI was put under Federal Grand Jury Investigation and the contract was terminated with LA by Governor Jindal prior to CNSI suing LA. (Supporting report)

Coast to coast major newspapers such as the Washington Post and national online media such as Yahoo Finance reported on alleged improper contact between Bruce Greenstein, (state official who was your former Vice President ) and CNSI.  Reports are he allowed CNSI to low ball a bid that was ultimately awarded to CNSI.   Greenstein resigned immediately after the allegations! (Supporting Report)

Only after the allegations were made and the news was blasting CNSI, was a law suit filed against the State of Louisiana for a contract termination.  The LA Attorney General’s office said you were trying “to obtain the identities of state employees who have provided evidence to attorney general investigators and who will be called to testify before the special grand jury investigating this matter.”  (Supporting Report).

Let’s not forget the very public notice given by LA Governor in regards to your company if the person awarded the contract has acted fraudulent or in bad faith, the contract shall be declared null and void.” (Link to cited statute).  With two options cited in that statute we find it very telling the Governor cited the one that points to fraudulent or bad faith on behalf of CNSI.

Louisiana DOA also sent a letter to CNSI’s attorney and in that letter it spelled out several reasons for the termination. (Supporting Report)

One of those cited reasons for termination and highlighted was a claim that “hundreds of telephone calls and thousands of text messages between Greenstein and CNSI management throughout the entire process created an unfair advantage to CNSI.”  

We have the same type of logs between Illinois HFS CIO Stephen Depooter and CNSI officials, example document.  

Sarif Hussein Executive VP of CNSI  requested competitor information from Illinois Executive Staff so Illinois and CNSI could create a presentation to counter your competitions position with Federal CMS.  CNSI claims to have no contract with Illinois and in your words, has not solicited Illinois.  Hussein states our solution is a proven and certified solution, theirs is not yet implemented and it is just a claim they are making that it would be faster and cheaper. We are ready to engage in these discussions any time.”   This sounds like a solicitation and presentation to Federal CMS being developed. (Supporting Document).

Conveniently avoided is any acknowledgment of the Federal Investigation and it’s been clearly reported that documents revealed Greenstein influenced a change in the solicitation for proposals that allowed CNSI to compete.   Most folks would agree an Attorney General is not going to advise their client to terminate a contract unless they have substantial evidence to support such an act.

Terminated hastily, without notice or cause? 

all to the detriment of the people of the State. The savings and improvements that were to accrue to the State and its taxpayers from the CNSI contract were significant and would have brought the state’s Medicaid system, built over 25 years ago, into the 21st century. Louisiana now faces the stark reality of an antiquated system that will cost twice as much to run and many millions more to update to comply with law and to ultimately replace”.

Let’s give you the benefit of the doubt and say that is true.  We must ask, if the alleged wrongdoing is substantiated are you implying its justified by the savings and improvements?

“Relative to the claim of a “laundry list of states that are suing CNSI”, it does not appear this statement is based on anything but unsupported innuendo. Does anyone check facts anymore? CNSI is engaged in a law suit against the state of Louisiana for wrongful termination of our contract, and a lawsuit in Michigan relating to services that were fully performed and accepted and for which CNSI was not paid; the latter suit is currently being settled. This is all public record”.

Why no mention of South Dakota, where CNSI’s work is the subject of lawsuits and where officials complain in court records of cost overruns and system defects? (Supporting Report)

In South Dakota, officials aren’t talking about the on-going dispute the state Department of Social Services has with CNSI.  Settlement negotiations are under way. Centers for Medicare and Medicaid Services officials — anxious to modernize claims processing — are involved in discussions.  CNSI was awarded the South Dakota Medicaid claims processing system contract in June 2008.  There followed two years of disputes between CNSI and the state agency as costs mounted. Project costs had risen from the original $62.7 million contract amount to an estimated $80 million-plus, according to court records.  CNSI served notice that it would suspend work because it was not getting paid. Then, the state agency moved to end the contract, according to court records. (Supporting Report)

We are well aware of the law suit in Michigan and even linked to it in our first article.

Although legal battles in three states might not fully qualify in your mind as a laundry list, we the tax payers think otherwise.  It’s enough of a list to raise serious concern as to what is happening in our state, which has been said to be the most corrupt in the nation.  

Unsupported innuendo?

“This brings us to the accusations of “cost overruns” and “low balling” lobbed in this blog. First, CNSI is often the low bidder because it offers a more cost effective, scalable technology platform. One CNSI state client saved $148 million in the first 18 months after going live with a CNSI solution. Second, state Medicaid Management Information System contracts are multi-year, firm fixed price agreements. They are often amended to address new work that is required to meet federal and other state mandates. However, any cost overrun is at the vendor’s risk, and not the state or the taxpayers”.

Maine- October 2006: According to local newspaper reports, the project has cost the state $56 million to date, far more than the original bid of $15 million. The project was originally slated to go-live in 2005, and the regional Medicaid office refused to pay any more federal reimbursement for costs overruns incurred after July 2005.(Supporting Report)

The laundry list:

  • Maine $14.5 million   End of work: $70 million
  • South Dakota $62.7 million  End of work: $80 million-plus
  • Washington $70 million   End of work $164 million
  • Michigan $51.5 million End of work $227.2 million
  • Louisiana $185 million Proposed End of work $234 million

The Louisiana Attorney General’s Office, had advised caution and to “just be aware of (CNSI contract) amendments in general.”

In Louisiana, the CNSI contract has been amended once since it was signed, increasing its $185 million cost by about $9 million. A second contract amendment proposed by DHH that would have added another $40 million was sidelined recently by the state Division of Administration.

What was it that the AG’s office cautioned to be on the lookout for?

The challenges include allegations that CNSI low-balled its costs in a proposal that had to many incorrect assumptions. (Supporting Report)

Adding to the state’s fiscal woes is the decision by Greenstein’s successor in the regional Medicaid office to stop federal reimbursement of the project for cost overruns after July of 2005.  “There is no more federal funding for this program,” said Richard McGreal, the current associate regional administrator for Medicaid, and there won’t be until the state submits a new plan and proves the system can do all the vendor promised – something beyond just paying the bills. (Supporting Report)

“I believe that CNSI owes the state for the damages that they’ve caused,” Glynn said, adding that the state is reluctant to push it because that would reveal the administration’s own shortcomings.  (Supporting Report)

Do we need to bring up the fact that your company was highlighted when Maine’s CIO made the front page of CIO magazine and said in an interview “Hiring a vendor, CNSI, that had no experience in developing Medicaid claims systems was the first mistake” and goes to give a “scathing and detailed autopsy of the disastrous Medicaid Claims System project run by CNSI”, Allan Holmes (Supporting Report).  Maine’s OIG even blamed CNSI (OIG Report).

Contrary to this blogger’s statements, CNSI has not solicited Illinois, much less for $100 million”.

CNSI  has held private meetings with state executives whom you gave alcohol, free tickets to a ball game or a boat trip to over 100 attendees and what we were alluding to is the “private boat trip” with just those you are trying to solicit business.  

We have obtained the call logs between your staff and state officials, the in person meetings without the presence of Michigan whom has the relationship with you and the offers by state officials for you to use the state plane to cart your staff around.  The sales materials used during your meetings with Illinois and the emails offering new products and the budget requests to federal CMS with money to be allocated to CNSI.

In Illinois’s case, that business would be worth well over $100 Million!  Compound that with the “fact” CNSI requested non-disclosure agreements from the Illinois HFS executive staff, one must ask, if you’re not soliciting business why do you need non-disclosure agreements? The following document shows how you, Illinois executives, Michigan executives were planning a presentation to sell Federal CMS on the idea.   (Supporting Document)

 Has not solicited Illinois?

“With regards to the event in Boston, while each state has its own government ethics guidelines, there is no prohibition against hosting an event like the one CNSI hosted in Boston. Large and small companies host vendor events across the country and in all market segments. Just as we hosted an event for conference attendees in Boston, so did our competitors. Our guests were served dinner and beverages during a 3 hour event. Suggestions of excessive drinking are completely incorrect. Contrary to this blogger’s statements, the tax-payers of Illinois did not pay for this event”.

We have statements from state employees about the excessive alcohol and the private boat trip for those you were soliciting after the 3 hour event hosted for everyone else.  There are many pictures of these events… Have to love Facebook and screen capture!

For a person who insinuates we need to check our facts, maybe you should click on the link to the FOIA request, which was included in my first article, that outlines Illinois executives were not truthful and stated that they did not know who paid for the boat trip.  Regardless, we appreciate CNSI confirming who did pay for the event!  What we assume you meant to say is that you did not pay for the conference, but you did pay for the boat trip.

“Contrary to this blogger’s statements, there is no evidence that the states of Michigan and Illinois circumvented procurement laws in entering an Intergovernmental Agreement which was approved by the state and the federal authorities. In fact, intergovernmental shared services agreements are a CMS approved arrangement that other states such as Arizona/Hawaii and West Virginia/Virgin Islands have entered into, with the resulting cost savings lauded by state governors and CMS”.

However Ms. Harris,  our legal team has determined that the Intergovernmental Agreement must have a lead agency and outline the governing state laws that will be followed.  Don’t you find it odd that this so called “approved” IGA doesn’t spell out who the lead agency is?

The intergovernmental agreement between Michigan and Illinois was for planning.  Isn’t it true you have already started implementing the solutions and have incurred a great deal of expenses yourself and we assume will be billing Michigan for the work?  We object to Illinois paying for implementation work when there is not an agreement or approved budget request.  Is Michigan going to bid the services as it is required by the laws that govern the IGA.

The real shame in this is Illinois won’t be able to put its people back to work permanently because of outsourcing over 55 ASSCME union jobs to India & H1B Visa workers (Supporting Link).  By our research your company only works in government contracting and of the 1000+ employees 960 of them are on a H1B visa.  You are effectively outsourcing government jobs to India and paying them lower salaries than US workers and then billing the government almost three times the rate they pay for US workers.

 Again, all of this information is or should be available publicly”.

We agree and could write a book on this!  The information “should” be available publicly however it has taken a massive amount of time and effort to force the disclosure of public records from Illinois and Michigan state agencies.  Many times a FOIA was improperly denied to which it took extensive legal posturing to finally get the records released.

Records that reflect a fair amount of private e-mails between CNSI and executive staff of HFS.  We find that interesting for a company claiming they have not solicited Illinois when many emails, phone calls and text messages were transmitted prior to IL agreeing to engage with Michigan.   

 CNSI is committed to bring all the facts surrounding our contract termination in Louisiana to light despite the State’s aggressive effort to let innuendo win out over truth. These efforts include the state’s failure to comply with public records requests, the state’s filing of multiple motions to delay the lawsuit and CNSI’s day in court, and the state’s fight against our efforts (and the media’s) to publicly disclose key documents at every turn”.

In most states; documents involved in any type of criminal investigation are rarely released prior to the conclusion of the investigation.  

Opinion and innuendo are not facts. We appreciate this opportunity to clarify the facts for your readers and encourage you to embrace the time honored journalistic traditions of research and fact checking in your future pieces. CNSI will continue to keep the public abreast of the facts in other outlets”.

We welcome any documents you have to counter our exposure of events.  We pride ourselves on journalistic traditions of research and fact checking and like we said in our first article, we have over a Thousand documents that clearly support each and every word we have typed!   If you have documents to support countering anything we have written we welcome them and will publish them!  In fact, please take this as a challenge to provide them!  We love facts!  If we are wrong we will stand up and correct our press!

We will be releasing this information slowly to the public so they can digest so we invite you to subscribe to our site.   

For the public – you may view this as a slanted dig against one vendor.  This is NOT! It’s a direct response to the vendor’s comments found in our first story covering Illinois HFS executives and their involvement with vendors.  CNSI just happen to be the one we ended up with the most information on.  We have more information from other vendors coming soon.  

Edgar County Watchdogs will continue to keep the public abreast of the facts both locally and in other outlets!  We will be releasing more information and we welcome your response so we can set the record straight for the public.


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  • Kirk Allen
    Posted at 18:38h, 02 July Reply

    Kirk Allen liked this on Facebook.

  • usw
    Posted at 21:09h, 03 July Reply

    Is anyone surprised that this kind of crap is going on at the highest levels of state and federal gov. projects?

  • RetiredCopterPilot
    Posted at 14:00h, 06 July Reply

    I believe it would be a safe bet to say that there are fairly large kick-backs involved.
    Follow the money!!!

  • Bobby
    Posted at 22:09h, 08 July Reply

    It looks like Illinois found a loophole in the state procurement rules and is exploiting it. Typical Julie Hamos administration. More than 40% of your tax dollars are spent by Healthcare and Family Services on these program. Illinois is rated one of the worst states for Medicaid and is primarily due to management that are worthless. Most wouldn’t survive a day in the private sector and have no real experience in the industry. So who is to blame? Executives? Middle Managers? We want names of those to hold accountable.

  • FCop_1952
    Posted at 22:13h, 08 July Reply

    Typical state government. Where is the free pass to go party on the boat for us broke citizens. My neighbor works for HFS in Finance and was telling me how many jobs the union is going to lose when they outsource to Cognisant. Keep digging ECWD!

  • Concerned AFSCME Worker
    Posted at 11:06h, 17 July Reply

    I am attending the official MMIS kick off between agencies at the idot building. Stephen cio mentions how much of a pain it has been responding to FOIA requests from ECWD. Yes it is a pain when you are not transparent and lie to your staff and public. Now we have the Medicaid director theresa eagleson trying to convince us that we need contractors. ARE YOU KIDDING US. The contractors are deemed smarter than the 120 of us that have built abd maintained the MMIS for 30 years. This is crazy because the company theg hired has been soliciting us. Theg say we cannot be hit with with the revolving door policy because they work for Michigan and Illinois through an intergovernmental agreement. You administrators lie to us and thank godfor watch dog groups like yours.

    • John
      Posted at 21:52h, 27 July Reply

      You need contractors because, idiots like you are sitting on out state money and doing nothing. What you know about modern technologies. Keep doing the same thing for next 30 years.

  • Kirk Allen
    Posted at 19:53h, 28 July Reply

    We appreciate your input and support! Rest assured there is a lot more to expose and wake up calls are coming!

  • Former CNSI Employee
    Posted at 01:22h, 07 August Reply

    Did you see the Media blitz put together by Julie Hamos and CNSI to try and cover up the fraud and corruption. CNSI is about to get criminal charges filed in LA at the same time Illinois is doing business with them. Go Illinois!

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