According to CNSI President Adnan Ahmed, the action by the state was taken without any prior notice to the company.
In 2011, several unsuccessful bidders for the contract protested the award to CNSI. After review, the protests were denied and CNSI's award was confirmed by the state's Division of Administration.
"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," Adnan said.
On Thursday Commissioner of Administration Kristy Nichols issued a statement announcing the cancellation of the more than $185 million contract with Maryland-based CNSI, which was supposed to take over Medicaid claims processing next year.
"Based on consultation with the Attorney General's Office, today I am terminating the state's contract with CNSI, effective immediately," Nichols said.
Currently a Baton Rouge-based federal grand jury is investigating the Jindal administration's award of the contract, which went to a company where the governor's health secretary, Bruce Greenstein, once worked.
"More than 100 Louisiana-based employees have been working to bring the state's Medicaid management information system into the 21st Century. We are examining how the state's abrupt decision will impact the Medicaid program and our dedicated Louisiana employees involved with this project," stated Larry Iversen, CNSI's executive account manager in Baton Rouge.
"Our sole interest has always been to install and operate a Medicaid management information system in Louisiana that will save the state millions of dollars in operating costs, while improving healthcare outcomes for the most vulnerable populations in Louisiana," Iversen said. "Our system would also prevent abuses that have been prevalent in the past."