DHHS sticks with Medicaid contract

North Carolina's human services agency is sticking by its recent decision on one of the richest contracts in state government.

Posted 11:14 p.m. Feb 20, 2009 — Updated 11:35 p.m. Feb 20, 2009

RALEIGH, N.C. — North Carolina's human services agency is sticking by its recent decision on one of the richest contracts in state government.

The Department of Health and Human Services said Friday it rejected an appeal by Electronic Data Systems, which has run the computerized Medicaid billing system for about three decades and wants to keep the business.

DHHS made its decision two months ago and said the choice came down mainly to price. Computer Sciences' bid for the project was $265 million, about $22 million less than Electronic Data Systems bid.

Friday's decision was the first in what could be months or years of appeals before work on a new computer system begins. An EDS spokesman said he had not received the state's decision and couldn't comment.

DHHS Secretary Lanier Cansler was a partner for four years in the Cansler Fuquay Solutions lobbying and consulting firm, which represented Computer Sciences.

Cansler said after his appointment as secretary in January that he would work to avoid any conflicts of interest.

"Whenever we have any issue with (the Medicaid contract), I'll be working with the Governor's Office as well as the deputy secretary and other leadership to make sure I'm insulated from anything that may have anything to play with that," he said during a Jan. 6 interview.

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