American Oversight Sues HHS and CMS for Verma Ethics Records

Washington, DC — Nonpartisan watchdog American Oversight today sued the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) to learn whether CMS Administrator Seema Verma violated ethics rules by working on issues related to her former consulting clients.

“The head of CMS needs to be focused on providing health care to millions of Americans, not satisfying the wishes of people who used to pay her millions in consulting fees,” said Austin Evers, Executive Director of American Oversight. “The public has a right to know whether Administrator Verma is running CMS impartially, and with the administration refusing to make transparent basic records, we’re forced to go to court to shed light on her potential conflicts of interest.”

Since her Senate confirmation in March 2017, Verma has been responsible for overseeing programs that deliver health care to millions of Americans, including the elderly, people with disabilities, low-income individuals, and other vulnerable populations. Verma previously headed SVC, Inc., a healthcare consulting firm that held contracts worth millions of dollars with Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina, and Virginia. While at SVC, Verma worked closely with then-Governor of Indiana Mike Pence to craft the state’s Medicaid program—so closely that other state workers thought she was an Indiana employee.

Verma sold SVC, Inc. to Health Management Associates (HMA) in 2017, apparently divesting herself of interest in the company’s business, but up to that point, Verma’s financial interests were tied to Medicare and Medicaid programs in seven states. In order to prevent conflicts of interest as CMS Administrator, Verma was required to recuse herself from work involving states that were previously her clients. But according to reports, Verma has not always avoided communications with the same state officials she worked with in her former role, potentially compromising her impartiality as a government official.

American Oversight filed Freedom of Information Act (FOIA) requests seeking documents from CMS to determine the extent to which Verma has been complying with her recusal obligations, including:

• Documents showing recusal determinations and ethics waivers related to Verma;
• Records reflecting Verma’s involvement in Medicaid waivers in the states she formerly worked for at SVC, Inc., including Kentucky, Indiana, and Iowa;
• All emails between Verma and state officials in Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina, and Virginia; and
• Records showing communications between Verma and employees at her former company, SVC, Inc., as well as HMA and HMA Medicaid Market Solutions.

Today’s lawsuit in the U.S. District Court for the District of Columbia comes after CMS failed to provide records in response to American Oversight’s FOIA requests, including five FOIA requests in August 2017 and four updated FOIA requests in January 2018.

See the full complaint below: