Policy

Report: CMS Administrator spent millions on outside consultants

A Congressional investigation found that outside consultants billed CMS nearly $6 million in less than two years. The expenditures, which included setting up interviews with CMS Administrator Seema Verma, were found by a previous Inspector General audit to violate federal contracting requirements.

By Elise Reuter - Medcity News on September 10, 2020

This article has been updated with comments from The Department of Health and Human Services.

In February of 2019, media consultant Pam Stevens secured an appearance for Seema Verma, Administrator of the Centers for Medicare and Medicaid Services, to appear on a “Women Rule” podcast.  She billed at least $3,400 to arrange the appearance, according to a congressional report released Thursday.

She also reportedly billed nearly $3,000 to arrange a “Girl’s Night” networking event at a reporter’s home, and billed at least $13,000 to nominate Verma’s participation in awards and pitch her participation in panels.

These are just a few examples highlighted in a recent report showing that outside consultants charged CMS nearly $6 million over a two-year period. The yearlong investigation, conducted by four congressional committees, alleged that CMS Administrator Seema Verma misused congressional funds to boost her public image.

According to the report, CMS was issued invoices for at least $5.79 million between June of 2017 and April of 2019. That included $5.067 million to public relations firm Porter Novelli, $688,755 to Deloitte and $33,864 to Weber Shandwick.

These support the results of a previous audit by the Office of Inspector General, which found that CMS violated federal contracting requirements. According to the OIG, CMS had prepared the required documentation for awarding strategic communications services. But the agency did not manage them correctly, such as allowing a subcontractor to direct CMS employees, and paid some questionable costs.

The consultants reportedly also had access to information on proposed rules, internal policy plans and other information that would potentially be market-sensitive.

For example, Verma worked closely with consultant Marcus Barlow, who served as her spokesperson in her previous job running a consulting firm in Indiana. He had access to CMS’ offices, managed Verma’s Twitter account and could make managerial decisions. While billing for the hours of a full-time employee, he charged more than double the $179,700 salary of CMS’ top communications official, according to the congressional report.

In other cases, consultants traveled with Verma to events across the country, racking up expenses. For a two-day trip to New York City in 2018, consultants with Nahigian Strategies submitted nearly $8,900 in reimbursements, including staying in a hotel that cost more than $500 per room per night. At the time, the approved government hotel rate was $291 per night.

“By retaining these consultants, Administrator Verma misused funds appropriated by Congress, wasting taxpayer dollars intended to support federal health care programs,” the report stated.

In an emailed statement, HHS Assistant Secretary for Public Affairs Michael Caputo said the report was a “political smear.”

“This is just another reckless, politically timed, drive-by hit job on a reform-driven Trump Administration official and, by extension, on President Trump himself,” he wrote. “Administrator Verma will continue the Administration’s unprecedented success transforming the American healthcare system in a manner that ensures free-market, pro-taxpayer health policy innovations and achievements drive public discussion — not partisan smears.”

 

Photo credit: Alex Wong, Getty Images