Andy Slavitt must answer for ObamaCare failures

In February 2015, President Obama appointed Andy Slavitt as the acting administrator of the Centers for Medicare and Medicaid Services (CMS) and on July 9, nominated him to become the administrator. He had first served as principal deputy administrator, the agency’s second in command for day-to-day operations. Prior to his appointments to CMS and current nomination, which will require Senate confirmation, Slavitt was CEO of Optum/QSSI, a subsidiary of UnitedHealth Group, one of the nation’s largest health insurers. Optum/QSSI had been building the data services hub for the online marketplace Healthcare.gov under an $85 million contract before it was chosen to serve as the systems integrator in late October 2013, just weeks after the website famously imploded.

{mosads}The Daily Caller reported on July 12 that the nomination has raised eyebrows on the left and right sides of the political spectrum. Senate Finance Committee Chairman Orrin Hatch (R-Utah) said, “Mr. Slavitt will need to answer a number of tough questions regarding his former employer and their relationship with the agency” and Senate Judiciary Chairman Chuck Grassley (R-Iowa) stated, “I have asked CMS to provide details on how it’s walling off Mr. Slavitt from potential conflicts of interest. I will continue to ask these questions as part of the nomination process.”

Furthermore, according to the Daily Caller, Slavitt was able to receive $4.8 million in tax-free money when he joined the Department of Health and Human Services (HHS) due to a loophole in government hiring practices. Slavitt had also been CEO of Ingenix when that company settled a 2009 lawsuit and paid $50 million to the state of New York and $350 million to the American Medical Association over allegations of medical data fraud. Ingenix subsequently changed its name to Optum.

Although no date has been selected for Slavitt’s confirmation, if it does occur, the process is expected to be lively. But Senate Republicans may let him stay as acting administrator in order to avoid a nasty political fight.

In addition to questions about conflicts of interest, senators will want to know what Slavitt is doing about state-based exchanges and Healthcare.gov.

Almost half of the state exchanges are in deep financial trouble, even after more than $5.5 billion was distributed to 48 states and the District of Columbia to both plan and establish exchanges. Several states exchanges have collapsed; the most controversial was in Oregon, which cost federal taxpayers more than $300 million. According to reports, political shenanigans related to the reelection of former Gov. John Kitzhaber (D) played a role in its demise. Taxpayers deserve to know from Slavitt and HHS exactly what happened in Oregon and with other failed or troublesome exchanges such as Hawaii, Maryland, Massachusetts and Vermont.

As for Healthcare.gov, Slavitt should inform Congress if the back end of the website, which communicates with insurers to verify information about consumers, will be completed and functioning properly in time for open enrollment for 2016. Several Government Accountability Office and HHS Office of the Inspector General reports released in 2015 revealed problems that include CMS’s failure to effectively ensure the accuracy of nearly $3 billion in financial assistance payments made to insurance companies during the first four months of 2014, and its inability to detect fake applicants who illegally obtained subsidized health insurance coverage. However, unless Congress moves forward with the confirmation process, senators will not be able to get assurances from Slavitt on the record that he will get to the bottom of the costly problems that have plagued Healthcare.gov and state-based exchanges.

For example, a Sept. 15 article in The American Spectator noted that after Maryland received $179 million in federal grants to construct and fix its failed website, the state’s attorney general announced that the contractor will return $45 million and the state is negotiating with CMS as to how that money will be divided. That would be a nice windfall to the state, since it did not spend a penny of its own money to build the exchange.

Conflicts of interest, Healthcare.gov, state exchanges, refunds to taxpayers: Andy Slavitt has a lot to answer for if he wants to be confirmed as the administrator of CMS.

Paige is vice president of policy and communications at Citizens Against Government Waste.