Cansler "had nothing to do" with CSC Medicaid contract

NC Health and Human Secretary Lanier Cansler found himself in an odd position today: trying to explain a cost overrun on his agency’s contract with a company for whom he used to be a consultant.

In 2008, Computer Services Corporation (CSC) won a $287 million dollar contract to revamp the state’s Medicaid billing management system, better known as MMIS. At that time, Cansler was a lobbyist whose company, Cansler Fuquay, was working with CSC on its bid.

“I consulted with CSC in helping them know what the needs of the state were with respect to the system,” Cansler said. “I didn’t lobby [state leaders] on the contract.”

Gov. Perdue named Cansler DHHS chief in 2009, shortly after CSC won the bid.

CSC’s is the third MMIS contract the state has signed over the past decade or so. The first two contracts fell apart. The third time hasn’t exactly been the charm: CSC’s bill has ballooned to $495 million, nearly twice the original bid, and the project will be almost two years behind schedule if it finally goes live as expected in 2013.

Cansler denies any conflict of interest between his current job and his former client. He says assistant secretary Dan Stewart is overseeing CSC’s work. “I get reports on the system as to what the progress is, and I’m briefed periodically on where they are and if there’s any big issues.”

“I’ve stayed far away from the management of this project,” he added. “I’ve had nothing to do with the contracts.”

While the CSC contract was awarded before Cansler’s HHS tenure, he was at the helm of the agency when it extended and expanded that contract recently -- a move Cansler says was required to accommodate changes in federal and state healthcare laws.

“The contract has been amended, but I have not been involved with that and don’t want to be. All I want to do is to make sure this project’s done in time to deal with health care reform when it comes into play, and I’m pushing my folks to make sure that happens,” he said

In 2008, when Cansler was consulting for CSC, HHS leaders in New York were already sounding alarm bells about the quality of the company’s work on their new MMIS system. But Cansler said what he learned on his trips to Albany didn’t raise any red flags.

CSC’s New York project “was late for a number of reasons,” Cansler conceded. “But I don’t think you can find a single system that’s ever been put in place in this country by any vendor on time and in budget. Because it is a very complex system. It’s hard to anticipate all the issues.”

In 2010, former House Co-Speaker Richard Morgan filed an ethics complaint against Cansler over the awarding of a no-bid HHS contract to another of his former clients, Carolinas Center for Medical Excellence. The State Ethics Commission dismissed the claim earlier this year, finding no evidence of wrongdoing.

The full interview is at right.