Some state governments are willing to hire offshore IT service providers to work on healthcare IT projects under controversial contracts that don't bar use of temporary foreign labor, or workers on H-1B visas.

Two multimillion-dollar government healthcare IT projects, one in Illinois and the other in the District of Columbia, illustrate what's going on.

In Illinois, Cognizant was awarded a $74.1 million contract in June to upgrade the state's Medicaid systems to meet the requirements of the Affordable Care Act (ACA), also known as Obamacare.

In January, the District of Columbia awarded Infosys a $49.5 million contract to develop a health benefit exchange and replace its Medicaid and eligibility systems.

H-1B visa holders may already be working on municipal computer systems in Washington. In Illinois, state officials say that no H-1B workers are working on its project -- for now.

Illinois said that Cognizant has assigned 13 workers, all U.S. citizens or permanent U.S. residents with Medicaid experience and expertise, to work on the project. Seven of the staff members are former state of Illinois employees with extensive knowledge of the state's Medicaid system, according to spokeswoman Kelly Jakubek, communication manager for the Illinois Department of Healthcare and Family Services.

Cognizant has submitted paperwork to hire 60 or more visa holders to work on the project -- a proposal that the state wasn't aware of, Jakubek said.

Computerworld sent Illinois officials emails with copies of the paperwork that Cognizant filed with the U.S. Department of Labor to hire 60 senior system analysts at a pay rate of $76,814. The documents, known as Labor Condition Applications (LCA), are part of the H-1B approval process and are used in salary determinations. As a general rule, though, the filing of an LCA doesn't mean that a visa worker in on the way.

The state controls the hiring process for the project, said Jakubek, though she could not say whether it will require the contractor to exclude temporary visa workers from the effort.

Asked about the paperwork filed with the Labor Department, Cognizant said it would take on visa workers if needed.

"Due to the shortage of qualified talent in many parts of the U.S., we routinely file LCAs when we anticipate a large contract to ramp up," Cognizant said in a statement. "Our first course of action is always to seek out qualified U.S. workers to fill these positions. We file LCAs as a fallback measure in the event that we are not able to find qualified U.S. workers."

Ron Hira, a public policy professor at the Rochester Institute of Technology and a researcher who studies tech immigration issues, said that Cognizant "is able to piggyback off of the false claims of a dire shortage of U.S. IT workers," adding that "Microsoft and others are providing cover to firms like Cognizant by making broad-based claims of IT shortages."

Cognizant, which is based in Teaneck, N.J., but has operations worldwide and conducts a major share of its work overseas, has been one of the largest users of H-1B visas, getting more than 9,000 approvals last year, according to government records.

Bangalore, India-based Infosys received 5,600 approvals last year.

The hiring of temporary visa workers "isn't due to a shortage of U.S. IT workers, but instead for the simple fact that those H-1B workers can be paid less than the market wage," said Hira.

Hira argued that governments should use their IT budgets to hire U.S. workers, and said government contracts "have also long been the sources of seed money to support workforce development and human capital development in technology areas."

"Innovation and education are the primary sources of economic growth in a knowledge economy, so policymakers should steer precious tax dollars to fostering innovation and education here, not overseas," said Hira.

The paperwork that Computerworld emailed to Illinois state officials wasn't a secret.