Guest Post by Adam Andrzejewski, founder of www.openthebooks.com and a former candidate for Governor of Illinois.
Implementing ObamaCare by Outsourcing Illinois Jobs to India
$71.4 million contract goes to a national leading outsourcing firm
CHICAGO- While everyone debates the policy points of ObamaCare, few understand that billions of dollars in IT contracts are wrapped inside the law. To meet federal mandates, states must upgrade their legacy Medicaid Management Information Systems (MMIS). These IT contracts are some of the largest awards in state history.
Last week, Illinois Governor Patrick Quinn became national news for circumventing a three year procurement process on up to $190 million in no-bid IT contracts. Now we find that one of the largest bid-contract MMIS awards will outsource state jobs to India.
In June, Illinois Governor Patrick Quinn’s administration awarded a ten year $71.4 million staffing contract to Cognizant Technology Solutions. Cognizant ranks in the national top 10 for procuring H-1B visa workers. Evidence shows that the company is staffing operational headquarters in Chennai and Bangalore, India for the Illinois work.
Our research at openthebooks.com highlights an issue that will be hotly debated in the contested Democratic primary for governor. How will Governor Quinn justify the outsourcing of state jobs to India at a time when Illinois has the second highest unemployment in the country?
State employees and managers willing to blow the whistle point out that these are not IT experts on H-1B visas coming in to save Illinois, but that “recent college graduates from India are very unlikely to be experts in Illinois-Medicaid.”
Former White House Chief of Staff Bill Daley, who is challenging the incumbent governor, is likely to make an issue of Quinn’s ten year plan to replace Illinois-based workers with permanent H-1B visa contractors and using off-shore facilities for additional work.
According to federal planning documents, Cognizant is set to charge Illinois up to $109.28/ hour, or $218,560 per position per year, for the work. This far exceeds the $75/ hour, or $150,000 annual cost, of even the most senior state experts- even after accounting for health insurance and pension costs.
Business model uses H-1B visas and off-shoring facilities
For many years, Cognizant has been a national leader in the procurement of H-1B visa approvals and use of off-shore facilities. Currently, it is ranked 7th nationally according to myvisajobs.com. Since 2000, Cognizant was approved for 10,014 H-1B visas and 4,661 green cards as compiled by visasquare.com.
This business model off-shores labor to fulfill contracts. In Alaska, Neha Anand, a business manager with Cognizant Technology Solutions since December 2011, is a “business analyst for Alaska Medicaid. According to his LinkedIn page, Anand is based in Chennai, India.
For the Illinois work, many Cognizant consultants, coders, architects, MBA’s and programmers will be based at Cognizant’s facilities in India. Currently, Cognizant is recruiting in India for candidates with “working knowledge of Medicaid and MMIS.” When the jobs are filled, the employees will work in Chennai and Bangalore, India. In mid-July, Cognizant Technology Solutions India Ltd based in Chennai held “open interviews” for applicants with the computer language skills needed for the Illinois work. Cognizant’s recruiting agency has posted jobs in India looking for medical billing specialists and system programmers with knowledge of Medicaid and the privacy HIPPA laws.
As of June of this year, Cognizant posted positions for over 41 new Illinois Medicaid “Subject Matter Expert” (SME) positions in India. These new SME’s are in addition to the existing Illinois team, according to planning documents filed by Illinois. The present Illinois SME’s have between 5-15 years of experience with deep knowledge of building and running the existing Illinois Medicaid system- but are not being used to design or build the new systems.
Displacing state employees at a higher cost
Cognizant is handling critical implementation responsibilities such as quality assurance; verification and validation tasks; building and maintaining the MMIS (which is currently done by qualified state employees). It will also function in an expert services consulting role, and have access to the patient records and up to 81,000 Illinois medical payments to hospitals, doctors, and services providers each day from India through the cloud.
Illinois state employees threatened with displacement have identified up to 60 state specialists whose jobs will be cut – some with up to 8 years’ experience. According to state salary data online at openthebooks.com, Danny Tribble, a Health and Family Services Specialist, started working on the Illinois MMIS system in 2005. After eight years, Tribble’s 2012 salary was $58,604. James Gamble is an MMIS Expert and after seven years makes $97,322. Both employees and many others like them will have their jobs cut, while contracts call for Cognizant to be paid more for the same work.
$71.4 million contract fight with union expected
Replacing state workers with independent firms could run afoul of the union collective bargaining agreement. In Illinois, unions have aggressively contested the use of outside contractors with work projects longer than 90 days. Recently, an administrative judge ruled that privatization agreements contract violate collective bargaining agreements.
Quinn administration cloaks MMIS upgrade
Our OpentheBooks.com Freedom of Information Act requests for transparency, including official planning, cost benefit analysis, key emails and implementation documents, were rejected by the Illinois Department of Health & Human Services. Fortunately, we were able to procure the information by other means.
In the case of ObamaCare implementation in Illinois, H-1B workers are replacing state employees and other state positions are being outsourced to Cognizant facilities in India. If this saved taxpayers money for better outcomes, Governor Quinn might have an argument. But at $218K of spending to replace $50K Illinois state jobs, it doesn’t look that way.
This was cross-posted on www.openthebooks.com.