Topeka A company that Gov. Sam Brownback's administration recently awarded a huge contract to help catch fraud in the Kansas Medicaid system has settled a $63.7 million whistleblower lawsuit with the U.S. Justice Department, it was announced this week.
Accenture, a technology services company, was accused of bid-rigging, taking kickbacks and fraudulently inflating the prices the government paid for computers and services.
Accenture denied any wrongdoing and said the settlement was not an admission of guilt.
The lawsuit was originally filed in the Eastern District of Arkansas by Norman Rille and Neal Roberts under whistleblower provisions of the federal False Claims Act.
In Kansas, state officials announced last month that Accenture would implement a computerized system aimed at catching fraud in the Medicaid system and making it easier to determine eligibility for people who apply for health care and other services.
State officials said the contract awarded to Accenture was $85 million to implement the Kansas Eligibility and Enforcement System and then $10 million a year to administer it for five years, for a total of $135 million.
When announcing the contract, Lt. Gov. Jeff Colyer said, “KEES is designed with the entire State of Kansas in mind. As the electronic front door to state services, this system will improve the eligibility process and identify significant savings for the state. We will achieve program reliability and integrity across all facets of health and human services in the State of Kansas.” The announcement of the contract was made at a news conference held by Colyer and several members of Brownback's Cabinet.
Asked if the Arkansas case would cause any reassessment of the contract between Accenture and the state of Kansas, Brownback's spokeswoman Sherriene Jones-Sontag said, "The state has a competitive bid process and we hope to save millions through fighting fraud, waste and abuse."
In the Arkansas case, federal officials accused Accenture of accepting kickbacks after it recommended certain hardware and software to the government. The Justice Department also accused Accenture of fraudulently jacking up prices and rigging bids for federal information technology contracts.
“Kickbacks and bid rigging undermine the integrity of the federal procurement process,” said Assistant Attorney General Tony West of the Justice Department’s Civil Division.
The U.S. attorney for the Eastern Arkansas District, Christopher R. Thayer, said Accenture was taking away much-needed revenue from the government.
"Fraudulent business practices that steal hard earned and much needed tax dollars from appropriate use will not be tolerated,” Thayer said.
Under the whistleblower law, Rille and Roberts are to receive a portion of the settlement, but the Justice Department said the amount hasn’t yet been determined.
Accenture’s statement said the company chose to settle rather than engage in a lengthy court battle.
“The agreement is not an admission of liability by Accenture. Accenture continues to vigorously deny that there was any wrongdoing,” the company said.
The company said the settlement amount “will not materially impact our results of operations or financial position.”
Accenture noted that the settlement won’t restrict its business with the federal government “in any way.” The company announced on Aug. 11 that the Justice Department had selected Accenture as one of 20 businesses that are part of a $1.1 billion contract for information technology services.
The statement added that the federal government understood there were “alliance relationships” in the information technology industry, which the company said benefits customers and vendors.
The company said it disclosed its agreements with vendors in proposals made to clients in government agencies.
“Accenture remains confident that our agreements and dealings with our alliance partners and vendors were appropriate and lawful,” the company said.
Accenture spokesman James E. McAvoy said in an email the company settled simply to save money.
“This settlement is a business decision — not an admission of any wrongdoing. Considering the costs of litigation and the complexity of the case, Accenture and (the Justice Department) agreed to settle now and avoid the additional time, inconvenience and expenses that would come with protracted litigation,” McAvoy said.
A spokesman for the Justice Department declined comment Monday.