Congressional Committees Release Investigative Report Accusing CMS’s Verma of Misconduct

Sept. 13, 2020
A team of staff members from four congressional committees has released a report accusing CMS Administrator Seema Verma of improperly using communications consultants to polish her image—using taxpayer money

Democratic staff members from two U.S. Senate committees and two U.S. House of Representatives committees on Thursday, Sept.10 published a joint report accusing Seema Verma, Administrator of the federal Centers for Medicare & Medicaid Services (CMS) of serious wrongdoing, including abusing the federal contracting process in order to favor Republican consultants who billed the federal government at high rates in order to boost Administrator Verma’s public profile, at the taxpayers’ expense.

A press release issued on Thursday by the office of Rep. Carolyn B. Maloney (D.-N.Y.), chairwoman of the House Committee on Oversight and Reform, stated that, “After a 17-month investigation, House and Senate Committee leaders today released a staff report detailing extensive abuse of nearly $6 million in taxpayer funds by Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma, who retained private communications consultants with strong ties to Republican political circles in order to arrange media appearances, secure profile pieces, book private meetings and lunches, chauffeur the Administrator during out-of-town travel, and handle a communications strategy focused on boosting her public profile and personal brand beyond her role as CMS Administrator. The consultants charged rates of up to $380 an hour, far exceeding the salaries of federal employees, who were sidelined by the Administrator, her aides, and the consultants. The report was prepared by the staffs of House Energy and Commerce Chairman Frank Pallone, Jr. (D-N.J.), House Oversight and Reform Chairwoman Carolyn B. Maloney (D-N.Y.), Senate Finance Ranking Member Ron Wyden (D-Ore.), and Senate Health, Education, Labor, and Pensions (HELP) Ranking Member Patty Murray (D-Wash.).”

The full text of the report, entitled “Investigation of CMS Administrator Seema Verma’s Use of Private Communications Consultants,” can be found here.

“Our investigation found that Administrator Verma misused funds appropriated by Congress and wasted taxpayer dollars intended to support critical federal health care programs,” Pallone, Maloney, Wyden, and Murray said in a joint statement contained in Thursday’s press release. “Congress did not intend for taxpayer dollars to be spent on handpicked communications consultants used to promote Administrator Verma’s public profile and personal brand. Administrator Verma has shown reckless disregard for the public’s trust. We believe she should personally reimburse the taxpayers for these inappropriate expenditures.”

The chairs and ranking members of the four committees, all Democrats, stated that “During the course of the investigation, the House Committees obtained tens of thousands of pages of documents from HHS and private parties, conducted interviews and briefings with employees and executives of two consulting firms used by CMS, and collected additional information from databases, court records, and press reports, among other sources. The report contains over one thousand pages of previously non-public documents. The Committees’ investigation also reveals that using these consultants may have violated federal law limiting how government officials are authorized to use funds appropriated by Congress. In connection with the report, the Committees have requested a formal legal opinion from the Government Accountability Office as to whether CMS’ expenditures violated the law.”

As the Democratic congressional leaders stated in the press release, “As the head of CMS, Administrator Verma oversees the country’s largest federal health care programs—including Medicare and Medicaid—and is responsible for a $1 trillion annual budget. Instead of using these funds to ensure that Americans have access to and are aware of opportunities to enroll in these programs, the Committees’ investigation revealed that Administrator Verma wasted millions of taxpayer dollars on the use of these consultants. For example:

> Administrator Verma and her top aides used consultants to build a shadow operation within CMS, through which these highly-paid consultants exercised decision-making authority over CMS employees and led communications efforts on major CMS policy initiatives and rollouts.

>   Consultants performed tasks that benefitted Administrator Verma personally beyond her role as CMS Administrator, such as booking private meetings for Administrator Verma with media figures and other high-profile individuals or seeking opportunities for Administrator Verma to receive awards.

>   One consultant who focused on promoting Administrator Verma’s public profile and personal brand drafted multiple iterations of an “Executive Visibility Proposal,” which detailed how to “highlight and promote Seema Verma leadership and accomplishment” and included proposals such as “[i]dentify key women’s, leadership and general-interest magazines for potential interviews/profiles” of Administrator Verma, recommending, among other targets, Good Housekeeping, Garden and Gun, Glamour, “Mommy Blogs,” Oprah Magazine, WSJ Weekend Lifestyle, and Woman’s Day.

>   In addition to multiple CMS employees, Administrator Verma was often accompanied on official travel with multiple consultants who billed hourly rates up to $380.

>   On multiple occasions, consultants billed as much as $203 per hour to drive Administrator Verma to or from appearances or otherwise provide labor at events.

>   Consultants submitted reimbursements for significant expenses related to CMS travel and accommodations, including for hotel rooms that cost more than $500 per night, hundreds of dollars above the government per diem.

Approximately two dozen of the consultants retained through various contracts had strong ties to Republican political circles, including:

>   The former Executive Director of the Trump-Pence transition team.

>   A consultant who is recognized for specializing in setting up profiles of Republican women and has extensive experience working in Republican politics, including Republican National Conventions, the House Republican Conference, and various Republican administrations.

>   A former Chief Strategist to Michelle Bachmann’s presidential campaign and Director of Messaging for John McCain’s 2008 presidential campaign. The consultant was retained by CMS while he was awaiting sentencing after pleading guilty in federal court to a felony charge of making false statements to the Office of Congressional Ethics as part of an investigation into the misuse of taxpayer funds.

>   Several consultants with prior experience working for GOP presidential campaigns and Republican National Conventions, as well as numerous former staff to Republican political campaigns or elected officials.”

And, they noted, “The Committees’ report follows a July 2020 report by the HHS Office of Inspector General, which found that CMS’ use of these same consultants violated multiple provisions of federal acquisitions law.”

Health and Human Services Assistant Secretary for Public Affairs Michael Caputo said in a statement that 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," said Caputo. "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.”

News media reports picked up on some of the more dramatic findings in the report. On Thursday afternoon, Dan Diamond and Adam Cancryn of POLITICO wrote this: “When Seema Verma, the Trump administration's top Medicaid official, went to a reporter's home in November 2018 for a ‘Girl's Night’ thrown in her honor, taxpayers footed the bill to organize the event: $2,933. When Verma wrote an op-ed on Fox News' website that fall, touting President Donald Trump's changes to Obamacare, taxpayers got charged for one consultant's price to place it: $977. And when consultants spent months promoting Verma to win awards like Washingtonian magazine's ‘Most Powerful Women in Washington’ and appear on high-profile panels, taxpayers got billed for that too: more than $13,000. The efforts were steered by Pam Stevens, a Republican communications consultant and former Trump administration official working to raise the brand of Verma, who leads the Centers for Medicare and Medicaid Services. The prices were the amount a consulting company billed the government for her services, based on her invoices, which were obtained by congressional Democrats.”

What’s more, Diamond and Cancryn wrote, “They are among the revelations included in a sweeping congressional investigation chronicling how Verma spent more than $3.5 million on a range of GOP-connected consultants, who polished her public profile, wrote her speeches and Twitter posts, brokered meetings with high-profile individuals — and even billed taxpayers for connecting Verma with fellow Republicans in Congress. The 49-year-old Verma, who advised then-Gov. Mike Pence in Indiana on health policy before joining the Trump administration, has strongly rejected any suggestion of wrongdoing in her consulting practices. In October 2019, she told a House committee that “all the contracts we have at CMS are based on promoting the work of CMS” and the spending was “consistent with how the agency has used resources in the past.” But the probe — conducted by Democrats across four congressional committees — found that Verma surrounded herself with a rotating cast of at least 15 highly paid communications consultants during her first two years in office, even as she publicly called for fiscal restraint and championed policies like work requirements for Americans on Medicaid, the health insurance program for low-income people.”

And, in reporting that aimed to deepen and broaden public understanding of what was in the congressional report, Elizabeth Williamson of The New York Times wrote on Thursday that, “Among the expenditures detailed in the report is nearly $3,000 billed to C.M.S. by Ms. Stevens for organizing a “girls’ night” party for Ms. Verma at the home of Susan Page, the Washington bureau chief for USA Today. Ms. Page was tapped last month to moderate the debate in October between Vice President Mike Pence and Senator Kamala Harris of California, the Democratic vice-presidential nominee. Other expenditures included $450 for a makeup artist for Ms. Verma for a video production and $500 per-night bills for hotels and time from consultants whose roles included driving Ms. Verma around. Ms. Verma allowed the consultants to operate independently of federal employees on the CMS policy and communications staff, who complained of the “chaos” created by their presence.”

Williamson further wrote that, “When reached on her cellphone on Thursday, Ms. Verma passed questions to career staff members at her agency, who forwarded a statement from Michael Caputo, a spokesman for the Department of Health and Human Services, the parent agency of CMS. Mr. Caputo called the report a “reckless, politically timed, drive-by hit job on a reform-driven Trump administration official and, by extension, on President Trump himself.’” Williamson quoted Chrissy Terrell, a USA Today spokeswoman, who said in a statement that “Susan Page was not paid or reimbursed by the federal government for the girls’ night event held at her home on Nov. 13, 2018. Page was also unaware Centers for Medicare and Medicaid Services was being billed for the event.” Williamson further quoted Terrell as stating that the girls’ night events were hosted by “journalists including Judy Woodruff, Norah O’Donnell, Rita Braver, Andrea Mitchell and others to honor significant accomplishments of both Democratic and Republican women.” The events were “well within the ethical standards that our journalists are expected to uphold,” Ms. Terrell added. USA Today said that Ms. Page had paid the costs for the reception, which came to “$4,025 for catering, plus several hundred dollars for beverages and a bit more in tips for the wait staff.” In a statement, Ms. Stevens said she had been hired by Porter Novelli in August 2018 “to put together a plan to educate media about CMS’s work through meetings” with Ms. Verma.

Also on September 10, Sandhya Raman of Roll Call wrote this: “The report said that one of the consultants, who was not named, was awaiting sentencing on a felony conviction for lying to Congress and had spearheaded communications efforts on large policy initiatives, which allowed the outside consultant to learn market-sensitive information. Documents obtained by the committee appear to back up the claim that CMS leadership granted consultants access to confidential internal information such as proposed rules and policy planning.”

Sponsored Recommendations

Enhancing Remote Radiology: How Zero Trust Access Revolutionizes Healthcare Connectivity

This content details how a cloud-enabled zero trust architecture ensures high performance, compliance, and scalability, overcoming the limitations of traditional VPN solutions...

Spotlight on Artificial Intelligence

Unlock the potential of AI in our latest series. Discover how AI is revolutionizing clinical decision support, improving workflow efficiency, and transforming medical documentation...

Beyond the VPN: Zero Trust Access for a Healthcare Hybrid Work Environment

This whitepaper explores how a cloud-enabled zero trust architecture ensures secure, least privileged access to applications, meeting regulatory requirements and enhancing user...

Enhancing Remote Radiology: How Zero Trust Access Revolutionizes Healthcare Connectivity

This content details how a cloud-enabled zero trust architecture ensures high performance, compliance, and scalability, overcoming the limitations of traditional VPN solutions...