- Associated Press - Friday, August 21, 2015

BATON ROUGE, La. (AP) - A Maryland firm that lost a $200 million state contract to process Medicaid claims has sued a whistleblower, accusing him of making false statements that resulted in the cancellation of the contract.

The Advocate reports (https://bit.ly/1hqf9YM) that Client Network Services Inc. is seeking more than $30 million in damages from Stephen Smith, the company’s former senior vice president.

Smith cooperated with a state grand jury probe that led to the 2014 indictment of Louisiana’s health secretary, Bruce Greenstein, on charges related to the contract’s award.

The lawsuit was filed in U.S. District Court in Maryland. CNSI is based in Rockville, Maryland.

Smith, upon the advice of his lawyers, declined to comment.

Meanwhile, Louisiana Assistant Attorney General David Caldwell said the state investigation continues into potential wrongdoing by CNSI.

The suit is the latest development related to the Jindal administration’s scrapping of CNSI’s contract to process claims for treating Medicaid patients. The contract was awarded in 2011 and cancelled in 2013.

Greenstein, who was named secretary of the Department of Health and Hospitals by Gov. Bobby Jindal and was a former CNSI executive, was accused of helping his old firm win the state contract.

Greenstein was indicted last year on perjury charges related to his testimony before a grand jury and a legislative committee.

CNSI accuses Smith of breach of contract, civil conspiracy and “tortious interference,” which is hindering an existing contract.

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, based in Long Beach, California - to undermine the contract with CNSI. Molina had the existing Medicaid contract.

“We are confident that the truth will come out regarding his actions and those he conspired with in undermining CNSI’s contract in Louisiana,” said Sonny Cranch, the CNSI Louisiana spokesman.

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Information from: The Advocate, https://theadvocate.com


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