Hatch and Grassley Press Administration on CMS Head’s Relationship with UnitedHealth Group Subsidiary

WASHINGTON – Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Senate Judiciary Chairman Chuck Grassley (R-Iowa) sent a letter to Health and Human Services Secretary Sylvia Mathews Burwell questioning the lack of transparency over how the Centers for Medicare and Medicaid Services (CMS) managed potential conflicts of interest regarding Acting Administrator Andy Slavitt and his former employer, Optum. The company, a subsidiary of UnitedHealth Group, subcontracted with another UnitedHealth subsidiary, QSSI, to administer the botched roll out of HealthCare.gov. Slavitt was one of the primary executives dispatched to repair the website after its failed launch.

The Chairmen’s request for information on the potential conflict of interest management comes as Slavitt has taken on a higher role at CMS than before – a role that most likely will impact relationships with his previous employer – and reports detailing the Administration’s lack of transparency surrounding payouts received by Slavitt before joining CMS. The Chairmen are asking for all documents, recusals, exemptions, and/or waivers regarding any evaluation of potential, apparent and/or actual conflicts of interest concerning Slavitt.

“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. While Mr. Slavitt may have recused himself from such decisions in the past, it may be difficult or impossible for him to do so in his current position at CMS,” the Chairmen wrote.

The full text of the letter is below and a signed copy is available here.

March 31, 2015

VIA ELECTRONIC TRANSMISSION

The Honorable Sylvia Mathews Burwell

Secretary

U.S. Department of Health & Human Services

200 Independence Avenue, S.W.

Washington, DC 20201

Dear Secretary Burwell:

We write to you to once again raise the concerns that we have previously expressed on numerous occasions over the past 3 years, specifically with regard to the risk of conflicts of interest between the Centers for Medicare & Medicaid Services (CMS) and UnitedHealth Group, its subsidiaries, and its employees. With the departure of former Administrator Marilyn Tavenner, Mr. Andy Slavitt has assumed the position of Acting Administrator of CMS. When Mr. Slavitt was hired last June, we wrote to CMS raising concerns about conflicts of interest between CMS and Mr. Slavitt’s previous employer, which is a subsidiary of UnitedHealth Group. CMS responded with a letter last month, which was largely unresponsive and did not provide sufficient information to relieve our concerns.

The recent decision to appoint Mr. Slavitt as the leader of CMS makes the unresolved conflicts of interest questions even more important. By way of illustration, prior to Mr. Slavitt taking a CMS post he was the Chief Executive Officer of Optum - one of many subsidiaries of UnitedHealth Group. In addition, another subsidiary of United is QSSI, which was one of CMS’s main contractors for HealthCare.gov. In January 2014, CMS awarded QSSI with a contract to be its senior advisor on HealthCare.gov. As part of its work, QSSI subcontracts with Optum. He was also one of the primary executives involved in fixing HealthCare.gov after its failed launch in October 2013.

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. While Mr. Slavitt may have recused himself from such decisions in the past, it may be difficult or impossible for him to do so in his current position at CMS.

It is crucial that CMS take the necessary action to prevent conflicts of interest. Unfortunately, in the past when we asked CMS about the steps it had engaged in to prevent these conflicts of interest, we were ignored. Therefore, we request that you provide the following:

1. All 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.

2. All recusals that involve Mr. Slavitt from June 2014 to present.

3. Any exemptions or waivers issued to Mr. Slavitt concerning potential, apparent and/or actual conflicts of interest.

Thank you for your attention to this matter. We would appreciate a response by April 8, 2015.

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