THE BLOG
09/03/2013 01:57 pm ET | Updated Nov 03, 2013

Implementing ObamaCare by Outsourcing Illinois Jobs to India

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.

Adam Andrzejewski is the founder of www.openthebooks.com and a former
candidate for Governor of Illinois.