Firm with ties to Rauner's office lands $12M no-bid Medicaid deal
A consulting firm with direct ties to senior staffers in the office of Gov. Bruce Rauner has been awarded a $12.8 million Medicaid system contract without so much as putting up a bid.
The Rock River Times reports as part of an overhaul of Illinois’ Medicaid system, McKinsey and Co. has netted a six-year, $5.26 billion per annum package that is split across seven providers and will offer five coverage options to residents in 102 counties.
Overall, the one-year McKinsey deal could be worth up to $12.5 million, constituting the largest contract in state history, the report said.
According to Capitol Fax, one of Rauner’s deputy governors, Leslie Munger, who was state comptroller under him before being ousted by Susan Mendoza last year, was a former recruitment chief at McKinsey and Co. over a four-year period commencing in 1978.
Several media outlets have also reported fellow Deputy Governor Trey Childress has a “direct line of communication” with a McKinsey partner.
Munger rejoined Rauner’s staff at an annual salary of at least $135,000 following her loss to Mendoza. Since Rauner took office in 2014, McKinsey has been awarded more than $70 million in contracts from the state after going more than a decade without being awarded any state contract.
Following the announcement of the McKinsey agreement, Mendoza wasted little time calling into question how the deal was sealed.
“We are beginning to see the consequences of Gov. Rauner going outside the scrutiny of the state’s standard procurement process to award the biggest-ever contract in state history,” she said on Twitter.
Since Munger lost the election, Rauner and Mendoza have frequently bumped heads, with the new comptroller calling into question the bookkeeping of Department of Innovation and Technology (DoIT), a department Rauner created two years ago.
Following Munger's election loss last year, the Rock River Times has reported Munger quickly moved more than $70 million from the state’s general fund into administration-controlled agencies that largely benefited DoIT.
“This type of waste of tax dollars is why I will always demand accountability and transparency from every state agency,” Mendoza said in announcing she had suspended $27 million payments that were part of a $250 million computer modernization plan introduced by the governor.
The Rauner administration has countered all the criticisms by insisting that the federal consent decree regarding bidding for Medicaid contracts is exempt from the competitive process and that the state followed all procurement regulations in issuing the contract.
“In retaining McKinsey to achieve this goal, Healthcare Family Service (Department of Healthcare and Family Services) has followed state procurement code,” Felicia Norwood, director of the department, said in a statement. “By helping to ensure that the department is in compliance with the law, this contract is intended to ultimately prevent costly future litigation.”
Rep. Greg Harris (D-Chicago) recently filed two new health insurance bills, including one that would prohibit Central Management Services from slashing Medicaid services made available under the Affordable Care Act without the authorization of the Illinois General Assembly.
“Since I introduced legislation to require more transparency and oversight into the largest procurement in Illinois history, I have known there would be problems,” Harris said.