BATON ROUGE, La. (Legal Newsline) -- Louisiana Attorney General James "Buddy" Caldwell reportedly directed Gov. Bobby Jindal to cancel a Medicaid contract with a Maryland company, pointing to ties to Jindal's current health secretary.
The contract was worth nearly $200 million, The Associated Press reported.
According to the AP, the head of Caldwell's public corruption unit said an ongoing investigation revealed that the contract was improperly handled and that there was "inappropriate contact" between CNSI and employees of the state Department of Health and Hospitals.
The company, based in Gaithersburg, Md., was chosen in 2011 to implement a new, next generation Medicaid Management Information System, or MMIS, for Louisiana.
Commissioner of Administration Kristy Nichols announced late last week that the contract was being terminated.
According to the AP, a federal grand jury is already looking into the decision to give the contract to CNSI.
The company, at one point, employed current DHH Secretary Bruce Greenstein.
CNSI said in a statement it will challenge the decision.
President Adnan Ahmed argues the action was taken without any prior notice to the company.
"We have been working on the implementation of this new Medicaid system for Louisiana for well over a year and recently reached an important milestone in that process with a timely launch of a critical component of the system," he said.
In 2011, several unsuccessful bidders for the contract protested the award to CNSI.
After review, the protests were denied and the company's award was confirmed by the state's Division of Administration.
"More than 100 Louisiana-based employees have been working to bring the state's Medicaid management information system into the 21st Century," said Larry Iversen, CNSI's executive account manager in Baton Rouge.
"We are examining how the state's abrupt decision will impact the Medicaid program and our dedicated Louisiana employees involved with this project."
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.