Verma recuses self from Indiana, Iowa waiver talks

CMS Administrator Seema Verma has recused herself from weighing in on any decisions involving Indiana and Iowa's Medicaid expansion waivers, according to an agency spokeswoman.

The news comes just days after Kaiser Health News reported that she had recused herself from talks around Kentucky's pending waiver to convert its Medicaid expansion program from a straightforward eligibility expansion to a program that includes conservative principles such as premiums and a work requirement. Before joining the CMS, Verma was an industry consultant and advised Indiana, Iowa and Kentucky on how to overhaul their Medicaid programs.

The news also follows an April 7 letter from Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) to HHS' acting General Counsel Jeffrey Davis requesting information about how the agency will ensure Verma complies with ethics agreements preventing her from working directly on matters her consulting firm SVC Inc. advised on.

He also wanted assurances she wouldn't weigh in on state matters that the consulting firm Health Management Associates had advised on, as that company purchased her former firm earlier this month.

"The public deserves clear transparency when it comes to powerful federal officials and their personal financial interests in the programs they are working on," Wyden said. "Avoiding conflicts of interest cannot be done with a wink and a nod."

Verma is believed to have more Medicaid experience than any other administrator in the agency's history, having helped craft expansion plans in Indiana, Iowa, Kentucky and Ohio.

From Indiana alone, Verma's Indianapolis-based firm, SVC Inc. collected more than $6.6 million in consulting fees. The firm helped the state expand Medicaid in a program that requires beneficiaries to pay premium contributions, have health savings accounts, and face a benefit lockout if they don't pay premiums. Indiana currently is asking the CMS to extend the program for another three years.

Verma is a well-known advocate of adding premiums, lockouts and work search requirements to Medicaid, according to Hannah Katch, a senior policy analyst at the Center on Budget and Policy Priorities and a former official in California's Medicaid program.

"I'm concerned that her involvement in the development of these waivers shows her support for policies that create barriers to care for Medicaid beneficiaries, which is the real problem here," Katch said.

The CMS spokeswoman said she did not know if Brian Neale, the new director of the Center for Medicaid and CHIP Services, would also recuse himself from reviewing Indiana's renewal request. He worked with both Verma and Vice President Mike Pence to create the Healthy Indiana Plan, the state's Medicaid expansion plan also known as known as HIP 2.0, when Pence was governor of the state.

While Neale could still end up taking the lead on the Iowa and Kentucky waivers, it's unclear who will make decisions about Indiana's. An attorney familiar with Neale's role on HIP 2.0 said that he would need to recuse himself as well.

Indiana's waiver has already been the subject of controversy after reports in February said the state's application used misleading and inaccurate information to justify extending HIP 2.0. Staffers at the left-leaning National Health Law Program and Center on Budget and Policy Priorities reviewed the data and found it flawed.

Joan Alker, a Medicaid expert at Georgetown University, said Verma made the right call to recuse herself from decisions about the Indiana, Iowa and Kentucky waivers and doubted the decision would positively or negatively impact review of the applications.

Gail Wilensky, a veteran health economist who was Medicare administrator under President George H.W. Bush, agreed and noted that even though Verma won't directly weigh in on the applications, she will still be the one to set general policy parameters regarding waiver determinations.