Shades of Xerox: HHSC Has Contractor Trouble Again!

THHSC building
Texas Health and Human Services Commission

The Houston Chronicle reported yesterday and today that the Texas Health and Human Services Commission ended a tentative contract with Truven Health Analytics of Ann Arbor, Mich., because of potential insider influence for the company.  The contract was for a major “enterprise data warehouse” to allow HHSC to consolidate its immense data needs to save staff time and the state money. The legislature had set aside $78 million for the project. Thomas Suehs, former executive commissioner for HHSC, is an adviser to Truven.

However, the concern is not Suehs and potential favoritism but the fact that Truven became aware that Chief Counsel for HHSC Jack Stick had made a comment in a closed-door meeting that “his former division [OIG] had a data project with another contractor charging much less than Truven was requesting.”

“The comment got back to Truven, which viewed it as an attempt by Stick to convince other officials to revoke the tentative award and give to [sic] the contract to the other company, according to one of its lobbyists.”

An earlier online version of the story had noted that HHSC-OIG had given a contract to the Austin-based company 21CT which “already was the subject of controversy because it won the $19.8 million project from the inspector general without a bidding process. The commission has refused to release the project’s contract.”  The contract was for data-mining software now being used to uncover Medicaid fraud in Texas.

According to the Chronicle story, contractors are worried “that the state is rebidding the project to give another chance to a company favored by a new top commission official,” allegedly Stick.

The state is already suing Xerox for a rumored $3 billion for its failed orthodontic prior authorization process when it was HHSC’s primary Medicaid claims administrator until May of this year.  A recent federal HHS-OIG audit determined that HHSC was responsible for the orthodontic spending and not controlling the contractor.

UPDATE: HHSC has issued a news release on re-issuing the contract this fall.

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