Hatch, Grassley: Obama Admin Needs To Explain ‘Unresolved Conflicts Of Interest’ At CMS

(Photo credit: MANDEL NGAN/AFP/Getty Images)

rpollock Reporter
Font Size:

The acting head of the Center for Medicaid and Medicare Services has attracted the attention of two powerful senators, who are now demanding answers about whether Andy Slavitt has been compromised by personally accepting millions of dollars from the health industry.

In a letter issued Tuesday by Senators Orin Hatch and Chuck Grassley to Health and Human Services Secretary Sylvia Matthews Burwell, the lawmakers wrote that they are concerned “specifically with regard to the risk of conflicts of interest between the Centers for Medicare and Medicaid Services and UnitedHealth Group, its subsidies and its employees.”

The letter was first obtained by The Daily Caller.

As exclusively reported by TheDC earlier this week, when Slavitt joined CMS last year, the Obama administration quietly permitted him to redeem $4.8 million in health company stock without paying capital gains taxes. About half of the equities were in United Health Group stock where for 11 years Slavitt served as an executive in Optum, a UHG subsidiary.

United Health Group and its subsidiaries are deeply involved in Obamacare. Operationally, an Optum subsidiary called QSSI runs the troubled Obamacare website, Healthcare.gov.

The two senators were especially concerned about what they called “unresolved conflicts of interest” between the QSSI contract and Slavitt’s role as “one of the primary executives involved in fixing Healthcare.gov after its failed launch in October 2013.”

Optum also runs Obamacare health exchanges in five states while its parent, United Health Group, sells health-care insurance to millions of Obamacare customers in 12 states.

United Health Group reported that in 2013 it earned $30 billion in revenues just from Medicare and Medicaid, which Slavitt oversees.

“The multiple relationships between Mr. Slavitt and United subsidiaries raise real concerns about how, and to what extent, CMS has prevented conflicts of interest given the fact CMS makes decisions that impact United and its subsidiaries every day,” the senators told Burwell.

They requested Burwell turn over “documents, including memoranda, e-mails and other similar material, regarding any evaluation of potential, apparent and/or actual conflicts of interest concerning Mr. Andy Slavitt.”

They also asked for “all recusals that involve Mr. Slavitt.”

A rare July 2014 HHS ethics waiver allowed Slavitt to avoid a mandatory one-year waiting period and rule immediately on issues affecting United Health Group business.

The senators demanded Burwell turn over all “recusals that involve Mr. Slavitt” and “any exemptions or waivers issued to Mr. Slavitt concerning potential, apparent and/or actual conflicts of interest.”

Since his original appointment as CMS deputy administrator last June, Slavitt has been promoted to acting administrator to replace his boss Marilyn Tavenner. Tavenner was fired in part due to the repeated failures and controversies that engulfed the Obamacare program.

There are reports that the White House may nominate Slavitt to serve as the permanent CMS administrator. Tavenner’s successor would require Senate confirmation.

In his current role as acting administrator, “it may be difficult or impossible” for Slavitt to carry out his duties at CMS, the lawmakers wrote.

The lawmakers expressed annoyance that for three years top Obama health officials have refused repeated congressional inquiries about conflicts of interest between CMS and United Health Group.

“Unfortunately, in the past when we asked CMS about the steps it had engaged in to prevent these conflicts of interest, we were ignored,” the two senators wrote.

Hatch is the chairman on the Senate Finance Committee. Grassley is chairman of the Judiciary Committee.

They requested Burwell turn over documents by April 8.

Read the letter: