INDIANAPOLIS (AP) — A private consultant has been paid millions of dollars to help shape Indiana’s health care policy while also being allowed to work for one of its major Medicaid vendors because of what ethics experts say is a hole in state law.
Carmel-based SVC Inc. has received more than $3.5 million in state contracts for work that includes design of the Healthy Indiana Plan under both Gov. Mike Pence and fellow Republican former Gov. Mitch Daniels, The Indianapolis Star reported.
Hewlett-Packard has agreed to pay the company more than $1 million while landing more than $500 million in state contracts during consultant Seema Verma’s tenure with the state under both Republican and Democratic governors.
Verma said she and her company have played no role in HP’s contracts with the state.
“SVC has disclosed to both HP and the state the relationship with the other to be transparent,” Verma said. “If any issue between HP and the state presented a conflict between the two, I recused myself from the process.”
HP claims management and information system contracts with the state show that it has agreed since 2007 to pay Verma’s company $1.2 million as a subcontractor for “health consulting services.”
Trevor Brown, an expert on government purchasing and director of Ohio State University’s John Glenn School of Public Affairs, said Verma’s dual role gave an appearance of a conflict of interest.
If Verma was a federal contractor, her dual roles “would certainly raise tremendous concern for regulators and purchasing officials,” he said. “This is exactly the kind of thing that would land an agency in a hearing before a legislative oversight committee.”
Verma helped design the Healthy Indiana Plan that was implemented under Daniels in 2008. About 52,000 low-income residents are enrolled in the health insurance program that features high deductibles and requires participants to contribute a portion of their income to a health savings account.
Pence has proposed expanding the program to an additional 350,000 people through what he’s calling HIP 2.0. That expansion would generate significantly more claims, with some of that money likely going to Hewlett-Packard.
Pence spokeswoman Christy Denault said Verma has filled a valuable role in forming the state’s health care policy for more than a decade, beginning with Democratic Gov. Frank O’Bannon’s administration
“We appreciate her advice and counsel, especially on the continuation of the Healthy Indiana Plan and HIP 2.0,” Denault said.
Debra Minott, who resigned in June as secretary of the state’s Family and Social Services Administration, said she was surprised about Verma’s dealings with HP when she learned about it sometime in 2013.
Minott said when she brought her concerns to FSSA’s ethics officer, she was told Indiana’s ethics rules didn’t apply to conflicts of interests among state contractors.
The Republican leaders of the Indiana House and Senate health committees said they weren’t aware of Verma’s work for HP.
House health committee chairman Ed Clere, R-New Albany, said he had no idea that the state had paid $1.15 million to SVC over the past year.
“I think there’s a larger issue of transparency and accountability as the state increasingly relies on contractors, including consultants,” Clere said. “I’m all for harnessing the power of the private sector, and the key word is ‘harness,’ which suggests the state is in control. The question here is, ‘Whose hands are on the reins?'”