PROVIDENCE –– Three months after accepting bids from 11 companies, the Carcieri administration has canceled plans to hire a private consulting firm to help lead the most ambitious reconfiguration of social services in Rhode Island history.

Instead, a team of state employees will oversee the massive overhaul — dubbed the “global Medicaid waiver.” The state’s 180,000 Medicaid recipients should begin noticing changes in less than three months, according to a timeline released by the governor’s office yesterday.

The administration, however, acknowledges that it doesn’t have enough state workers to manage the shift, which includes a transformation of long-term care programs for elderly and disabled residents.

“The Department of Human Services is moving ahead with a very aggressive plan to get the right people in place to implement the waiver,” Governor Carcieri’s spokeswoman, Amy Kempe, said yesterday in releasing a detailed plan to advertise 49 job openings between tomorrow and April 1.

In January, Rhode Island became the first state to enter a five-year agreement with the federal government capping Medicaid spending each year. In exchange, the governor received unprecedented flexibility to change programs guaranteed to low-income residents, programs that traditionally have been closely regulated.

But almost two months before the agreement became official, the Carcieri administration invited bids to “assist in coordinating the development and implementation of [these] Medicaid reforms,” according to the request for proposals, commonly called an RFP. The value of the contract was not disclosed.

The 11 companies that responded included at least two firms with close ties to the administration.

The Lucas Group, a Massachusetts company, employs John Stephen, a former New Hampshire health and human services commissioner and longtime friend of DHS Director Gary Alexander. The Lucas Group worked on a volunteer basis to help negotiate Rhode Island’s Medicaid agreement with the federal government, according to the governor’s office.

Another bidder, ACS State Health Care, also volunteered to help craft the agreement.

ACS recently hired Frank Spinelli, Rhode Island’s acting Medicaid director until September. After retiring, Spinelli volunteered to work on the waiver through December, according to Deb Buffi, acting assistant director of legal services for the Department of Human Services.

“In his capacity as an ACS employee, Frank was not paid any compensation for any work he may have done on the waiver application by the State of Rhode Island,” Buffi said in an e-mail to The Journal. “When Frank became an ACS employee, ethics rules prevent him from having a dominant role working with DHS.”

Kempe said the decision to avoid private consulting firms had nothing to do with questions raised about the relationships.

“It was a decision made by the director, director Alexander,” Kempe said. “Since the time the RFP process was started and the waiver has been approved, the director has had the time to assess staffing needs across all … departments and, at this time, does not need such a broad scope of services.”

While the administration has canceled the consulting contract for now, Buffi noted that ACS has a contract to “provide technical assistance and support to the RIte Care program,” which offers subsidized health insurance to 112,672 children and parents.

And Kempe said the administration may reconsider the use of consultants.

“There may be a need for a more focused scope of services in the future, but that will be assessed as the waiver is implemented,” she said.

Medicaid transition target dates

The Carcieri administration, recently authorized to overhaul the state’s Medicaid system, released several key target dates yesterday:

•Posting job openings for 49 employees needed for the transition: Between tomorrow and April 1.

•Tighter standards in place for nursing home eligibility: By June 1.

•New “selective contracting” in place for Medicaid services: By July 1.

•New “assessment and coordination unit” in place to manage long-term care eligibility: By Aug. 1.

Source: R.I. Department of Human Services

speoples@projo.com