Obamacare chief Andy Slavitt lied before a Congressional hearing investigating wasted Obamacare state exchange funds, according to a new report by the House Energy and Commerce Committee. While under oath, Slavitt claimed that “over $200 million” in funds had been returned to the federal government. In actuality, just $21.5 million has been recovered despite state exchanges receiving $4.5 billion in taxpayer funds. In addition, the $21.5 million figure represented leftover funds, not money that had been recovered as a result of federal oversight.
During a hearing on December 8, 2015, Slavitt assured Congress that the Centers for Medicare and Medicaid Services (CMS), the agency in charge of administering Obamacare dollars, would act to recover unspent and improperly spent funds. Slavitt announced that more than $200 million had been returned to the federal government, with more to come:
“Over $200 million of the original grant awards have already been returned to the Federal Government, and we’re now in the process of collecting and returning more.”
But as the report notes, Slavitt’s claim that more than $200 million has been returned is not supported by any government documentation.
In addition, Slavitt misled Congress about CMS’ oversight efforts. Contrary to implications by Slavitt and the media, the returned funds were not a result of federal oversight over wasteful or inappropriate funds. Rather, the funds were “de-obligated,” meaning the grantee had completed all work or the grant end date had been reached. As the report notes, this money was simply leftover because the grant had ended.
CMS provided documentation that confirmed these findings after months of follow up emails and calls from Congressional investigators, many of which were ignored.
Despite the efforts of Energy and Commerce Oversight Subcommittee Chairman Tim Murphy (R-Pa.), taxpayers have seen billions wasted on failed and barely functioning state exchanges.
Since 2011, billions in taxpayer dollars have gone to states with failed or failing systems, including Oregon, Vermont, Minnesota, Hawaii, Maryland, Massachusetts, Nevada, and New Mexico. Despite this long list of failures, CMS has continually failed to exercise oversight over taxpayer dollars.
Of all state exchange failures, the most alarming story is clearly the Cover Oregon state exchange. A recently uncovered email confirmed accusations that the $305 million exchange was run by partisan political advisors focused on then-Governor John Kitzhaber’s 2014 reelection.
The decision to shutter the exchange in early 2014 was made based solely on the governor’s election prospects even though Cover Oregon’s infrastructure was close to 90 percent complete. Transferring to the federal system cost an additional $41 million.
As recently as February this year, Slavitt assured Congress that the federal government will “recover its fair portion” of funds from failed state exchanges. Given the findings in this new report, this is clearly not the case.
Below is a timeline of the House Energy and Commerce Committee’s investigation into the misleading statements, highlighting the many ignored inquires:
Dec. 8, 2015: CMS Acting Administrator Andrew Slavitt testified before the Oversight and Investigations Subcommittee on struggling state exchanges. Mr. Slavitt testified that “[o]ver $200 million of the original grant awards have already been returned to the Federal Government, and we’re now in the process of collecting and returning more.”
Dec. 9, 2015: Committee staff emailed CMS staff to request a staff level briefing concerning Mr. Slavitt’s testimony. Specifically, committee staff asked CMS staff to answer “how did CMS take back the $200 million from the state exchanges?” and “[f]rom which states and for what?”
Dec. 11, 2015: Committee staff and CMS staff discussed the committee’s request for a briefing.
Dec. 16, 2015: Committee staff emailed CMS staff to reiterate the committee’s request for a briefing, after hearing no response.
Dec. 17, 2015: Committee staff and CMS staff discussed the committee’s request for a briefing. CMS staff is reluctant to provide the requested briefing.
Dec. 28, 2015: CMS staff offers dates to schedule a briefing.
Jan. 12, 2016: CMS staff briefed committee staff on follow-up questions to the state exchange hearing. CMS staff clarified that the $200 million figure referred to grant money that had originally been allocated but not disbursed, and that CMS simply chose not to disburse the money in some of the grants.
CMS did not provide the Committee with any documentation or information supporting the $200 million number, such as which states the funds came from, why CMS decided not to allocate the money, when the decision was made, etc. Committee staff again requested that information.
Jan. 13, 2016: Committee staff emailed CMS staff with a list of follow-up questions from the briefing, including the initial underlying question that had not been answered: “a breakdown of the $200 million recouped by CMS from state exchanges – by state, amount, date and why the funds were returned.”
Jan. 21, 2016: Committee staff emailed CMS staff about the outstanding request, after hearing no response.
Jan. 27, 2016: Committee staff emailed CMS staff again about the request, after hearing no response. CMS staff responds, “we’re working on those Qs and should get you something shortly.”
Feb. 11, 2016: Chairman Murphy called Mr. Slavitt to ask about the status of the follow-up information on the $200 million from state exchanges. Mr. Slavitt responded that CMS staff was working quickly to response to committee requests.
Feb. 12, 2016: Committee staff calls CMS staff to follow-up on Chairman Murphy’s call, and CMS staff promised to prioritize the $200 million state exchange grant information, and hoped to send it to the committee the week of February 15.
Feb. 17, 2016: CMS staff emailed Committee staff that the information would not arrive this week.
Mar. 3, 2016: Committee staff emailed CMS staff for an update on the requested information – no response from CMS.
Mar. 15, 2016: Chairman Murphy and Mr. Slavitt have a phone conversation about outstanding committee document and information requests, including about the request regarding the $200 million from state exchanges. Mr. Slavitt reports to Chairman Murphy that CMS is still “checking the numbers,” but CMS should be able to provide that information to the committee by the end of the week.
Mar. 18, 2016: CMS staff provided the Committee with information and a chart regarding the $200 million figure