Wyden Asks HHS to Ensure Verma Complies with Ethics Agreement

WASHINGTON, March 17 -- Sen. Ron Wyden, D-Ore., ranking Democratic member of the Senate Finance Committee, issued the following news:

Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today sent a letter to Department of Health and Human Services (HHS) Acting General Counsel Jeffrey Davis requesting information about how the agency will ensure CMS Administrator Seema Verma is in compliance with her ethics agreements not to directly work on matters relating to seven states with which she has previously done consulting related to Medicaid.

"With any number of harmful health care policies being debated in Washington, it's critical to ensure public officials don't stand to personally benefit from the programs they oversee," Wyden said. "To preserve the integrity of the waiver process, protections must be put in place and made available to the public so Ms. Verma does not end up reviewing the same state programs that, until several months ago, she was paid to guide and direct."

During Verma's confirmation process, it was disclosed that she had contracted with over half a dozen Republican-led states seeking Medicaid waivers to allow conservative reforms to the program such as lock-out periods and work requirements. As a part of her ethics agreement with HHS, Verma pledged to seek "written authorization to participate personally and substantially in particular matters involving" seven states her consulting firm, SVC, Inc., has previously contracted with: Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina, Virginia. In addition to these states, Verma also disclosed in her federal ethics filing that she did consulting work for the state of Tennessee.

Verma is also subject to the Trump Administration's executive order blocking appointees from working on matters involving previous clients. The letter asks the HHS General Counsel to provide a detailed explanation of how the agency will ensure that Verma complies with these ethics agreements, as well as the HHS's own ethics rules.

Earlier this week, HHS Secretary Tom Price and Verma sent letters to every state governor signaling their intention to allow Medicaid waivers that include ideologically-motivated policies such as premiums for beneficiaries or work requirements that would harm people in the program. Wyden and House Energy and Commerce Ranking Member Frank Pallone, Jr., D-N.J., sent a letter to Secretary Price and Verma indicating that waivers of this nature run counter to congressional intent and the objectives of the Medicaid program.

The text of the letter can be found here: https://www.finance.senate.gov/imo/media/doc/Wyden%20Letter%20to%20HHS%20GC%20on%20Verma%20Ethics.pdf and below.

Mr. Jeffery S. Davis

Acting General Counsel

Department of Health & Human Services

Room 713-F

200 Independence Ave. SW

Washington, DC 20201

Dear Mr. Davis:

In one of her first official acts as the Administrator of the Centers for Medicare and Medicaid Services (CMS), Ms. Seema Verma co-signed an undated letter to each of the Nation's governors with Secretary Price signaling their intention to "revamp the federal and state Medicaid partnership." As you know, Ms. Verma signed an ethics agreement that includes provisions related to future interactions with states for which she did consulting work before her appointment. In light of her announced intentions to begin discussions with states regarding changes to the Medicaid programs they carry out, I am writing today to obtain a description of the procedures and safeguards that the Department intends to put in place to ensure that her prior associations with a number of states are properly reviewed and in full compliance with her ethics agreement and the Department's and Federal ethics rules.

The March 14, 2017 letter to the governors signed by Administrator Verma and Secretary Price identified a range of Medicaid programs and policies that they intended to revamp. For example, the first such area identified was an specific invitation to Governors to engage their states "in a bilateral process" to change the way State Plan Amendments are processed, including creation of a "fast-track" process for approval of waiver and demonstration project extensions." Ms. Verma was involved not only in the development of Indiana's waiver, but those of other states through her consulting firm, SVC, Inc.

Administrator Verma's January 31, 2017 signed agency ethics agreement makes specific provision for situations related to consulting services she and SVC, Inc. provided to seven states - Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina and Virginia. The agreement states "(p)ursuant to 5 C.F.R. 2635.502(d), I will seek a written authorization to participate personally and substantially in particular matters involving specific parties in which I know the States of Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina and Virginia are a party or represents a party." In addition, in Part 4 of Administrator Verma's OGE Form 278, Ms. Verma also disclosed a consulting relationship with the State of Tennessee. Finally, as noted in the final paragraph of her agency ethics agreement, Administrator Verma is also bound by the requirements and restrictions of the President's Executive Order dated January 28, 2017 ("Ethics Commitments by Executive Branch Appointees"). The Executive Order states, in the pertinent part, that covered officials "...will not for a period of 2 years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts."

Given the Secretary's and Administrator stated intention to work directly with Governors from the states designated in her ethics agreement to initiate significant changes to Medicaid policies and practices as well as to the individual state programs, including state plan amendments, waivers, amendments, and extensions, including discussions on a bilateral basis, please describe the following:

1) The process that will be put in place to ensure that the terms and provisions of Administrator Verma's ethics agreement are fully complied with by her with regard to any involvement with or decisions made relating to or impacting the States of Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina and Virginia, or the discussions related thereto. Please include in this description the procedures for initiating a review, the standards that will be used to determine conflicts, the criteria by which a waiver will granted, the identity of the official or officials who will be responsible for such review including the required written authorizations, and the process for disclosing any such authorizations to the Committee and to the public.

2) The process that will be put in place to ensure that Administrator Verma fully complies with the Department's ethics regulations with regard to any modifications or additions to the Medicaid Program in the State of Tennessee or discussions related thereto. Please include the identity of the official or officials who will be responsible for such review including any required written authorizations, and the process for disclosing any such authorizations to the Committee and to the public.

3) The process that will be put in place to ensure that the requirements and restrictions of the January 28th Executive Order on ethics will be fully complied with by Administrator Verma with regard to the Medicaid Program and her consulting work for any state including the process for disclosing such compliance to the Committee and to the public.

Because the joint letter soliciting discussions on changes to state Medicaid programs has already been sent to the governors, I request your response no later than close of business on March 31, 2017.

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