(Story updated at 11:50 a.m. ET)
Health Management Associates will acquire SVC, a consulting firm that is owned by Seema Verma, who Monday was confirmed by the Senate as the head of the CMS.
Verma had vowed to divest her company in order to address conflicts of interest that stemmed from the multimillion-dollar contracts she received as president and founder of SVC working with states to design Medicaid expansion plans.
“We are pleased to welcome the employees of SVC to the HMA family. This immensely talented group has extensive experience working closely with state officials and others in various states, including Indiana, Iowa, Kentucky and Ohio to design and implement innovative Medicaid solutions that advance alternatives to traditional Medicaid,” said Jay Rosen, founder and president of HMA.
HMA is a healthcare consultancy group that provides services to public and private providers.
SVC will become HMA Medicaid Market Solutions, a new HMA subsidiary. Verma worked with Vice President Mike Pence when he was governor of Indiana to design and implement a Medicaid expansion plan that requires beneficiaries to pay premium contributions and have health savings accounts. It also implemented incentives for healthy behaviors and locked beneficiaries out of the program if they failed to pay premiums.
From Indiana alone, SVC collected more than $6.6 million in consulting fees.
Prior to her confirmation, Verma told HHS' ethics office that she would request written authorization before hearing matters involving states she worked for. That also includes Arkansas, South Carolina and Virginia.
An HHS ethics officer will decide when Verma should recuse herself from a decision. In those cases, Verma's deputy or another senior official from the CMS or HHS would step in.
Correction, March 14, 2017:
The HMA in this story was not purchased by Community Health Systems. An earlier version of this story incorrectly stated that it had been.