CMS SPARC Prime, CNSI Settles Wrongful Termination Lawsuit

Posted (Last updated )

** Update 7.27.16

CNSI Settles Wrongful Termination Lawsuit with Louisiana

BATON ROUGE, La., July 25, 2016 /PRNewswire/ -- CNSI, a leading business solutions provider with vast experience developing and delivering innovative health care management technology, announced today that it has agreed to settle its lawsuit against the state of Louisiana related to the wrongful termination of a Medicaid Management Information System (MMIS) contract awarded to CNSI in 2011.

In 2011, CNSI was chosen to replace Louisiana's decades-old MMIS after a six-month competitive bidding process. CNSI was selected, in part, because of its state-of-the-art technology and strong experience implementing and operating state Medicaid systems, a task it had undertaken four times prior to being awarded the Louisiana contract. Two years later, former Governor Bobby Jindal's administration abruptly cancelled the contract for cause after alleging that the procurement process was improperly influenced. Soon after, CNSI filed suit against the state for wrongful termination of the contract. Ensuing investigations and discovery failed to substantiate the Jindal administration's false claims.

As agreed upon in today's settlement, the state will change the terms of the cancellation from "for cause" to "for convenience" and authorize CNSI to submit its termination claim...

G2X TAKE: While this final result may never help recover all that was lost, there is finally a settlement in the lawsuit related to the wrongful termination of a Medicaid Management Information System (MMIS) contract originally awarded to CNSI in 2011 from the State of Louisiana.

CNSI certainly fought hard to ensure that the state agreed that the “ensuing investigations and discovery failed to substantiate” the false claims and to clear their name of any wrong doing. 

**added 8.21.15

LITIGATON: Firm sues whistleblower for ‘false statements’ on $200M Medicaid contract

Firm sues whistleblower for ‘false statements’ after losing out on $200M Louisiana contract – August 20, 2015, By Marsha Shuler, The Advocate

"... In the lawsuit, CNSI claims Smith was a disgruntled employee facing a 20 percent pay cut when he started colluding with the company’s competitor — Molina Medicaid Solutions, of Long Beach, California — to undermine the contract with CNSI. Molina had the existing Medicaid contract.

“Smith, acting under the guise of the alias ‘Kunego,’ made a number of false and defamatory statements to federal and state government officials and investigators, in an attempt to cause Louisiana to terminate its contract with CNSI,” according to the lawsuit. “Louisiana did indeed terminate its contract with CNSI as a direct result of Smith’s actions. CNSI now seeks to recover damages incurred as a result of Smith’s actions.”

The termination came in spite of CNSI’s “exemplary performance,” the lawsuit states. “None of the purported justifications for the ‘for cause’ termination are valid.”..."

G2X TAKE: While this is related to a state Medicaid contract, the contractor in question is familiar to many and there is a high level of relevancy to the Federal contractor market. By suing the administration for wrongful termination of the deal and the whistle blower, CNSI is very clearly denying any wrong-doing. Whether the lawsuit results in any sort of retribution for the shot to their reputation and the loss of one of this lucrative state contract is yet to be seen, but in this hyper competitive market, contractors have and will continue to deal with similar challenges.

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