Feds investigating ‘false claims for payment for services’ related to R.I. computer contract

April 18--PROVIDENCE, R.I. -- The U.S. Department of Justice is investigating "false claims for payment for services" in connection with the state's long-running contract with the company that produced the seriously flawed new $364-million public-assistance computer system: Deloitte Consulting.

It's not clear whether the state is the target of the investigation, or Deloitte, or both. A spokesman for the U.S. Attorney's office declined comment.

But in response to a Journal inquiry, the Raimondo administration on Monday provided copies of two "civil investigative demands" for documents that the U.S. Department of Justice served on two state agencies: the Department of Administration and the Executive Office of Health and Human Services.

The two March 7 demands for documents, signed by then-U.S. Attorney Peter Neronha, say: "The investigation concerns the allegation that false claims for payment for services and/or false statements in support of such payments have been submitted to the U.S. government.

"These payments relate to services procured by the State of Rhode Island from Deloitte LLP and/or its subcontractors in connection with the establishment of health insurance exchange services under the Affordable Care Act as part of the Unified Health Infrastructure Project (UHIP)."

Translated: the inquiry reaches back more than four years to the creation of HealthSource RI as the online framework for Rhode Island's state-run Obamacare program.

But the requested documents actually cover a longer span, from Jan. 1, 2011, through the present, and they include the months of overpayments, under-payments and soaring backlogs as thousands of people seeking food stamps, cash assistance, childcare subsidies and Medicaid payments to their nursing homes were left in limbo. As of April 2, 2017, there were still 11,638 total pending applications.

The investigators are seeking documents related to the pre-negotiation, negotiation and subsequent changes to the initial Jan. 11, 2013, agreement that then-Gov. Lincoln Chafee's administration struck with Deloitte, "to design, develop, implement, and operate a technology platform and system to support new and existing health insurance initiatives ... [and] existing human services programs."

"All documents and communications relating to any issue, problem, glitch, or deficiency identified during design, implementation, testing, evaluation or other phase of performance of the UHIP Contract ... All documents and communications relating to any internal or external audits of UHIP including any discussion of the results of such audits and any penalties, sanctions, or remedies resulting from such audits."

And more specifically: "All invoices or payment records relating to the UHIP."

The investigators also demanded: "Documents sufficient to identify all individuals employed by or on behalf of the State of Rhode Island with responsibility for ... the approval, authorization, evaluation, or oversight of any change order, addition, alteration, or modification to the UHIP Contract."

The demand notice, giving the state until April 10, to produce the documents, identified Zachary A. Cunha as the assistant U.S. Attorney designated as the False Claims Act Investigator in the case, with Nancy DiQuinzio, Special Agent Lindsay Walford from the inspector general's arm of the U.S. Health & Human Services, and DOJ Investigator David Neill designated as custodians of the records.

And Department of Administration spokeswoman Brenna McCabe said the notices speak for themselves. As to whether the state met the April 10 document-production deadline, she said: "Both agencies have begun the process and will continue working with DOJ until we've been able to provide all of the records they have requested.

"The State is using internal legal counsel to fulfill these requests. Any further questions should be directed to DOJ," she said.

Deloitte did not respond to inquiries, and there was no additional comment from the governor's office. Raimondo took office in January 2015.

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