Centers for Medicare and Medicaid Services Administrator Seema Verma used millions in federal taxpayer funds to pay for communications consultants with strong Republican ties to polish her own profile, potentially violating federal policies, a new report released Thursday by House and Senate Democratic committees alleges.
The new report — released jointly by the Democratic staff of the House Energy and Commerce, House Oversight and Reform, Senate Finance and Senate Health, Education, Labor, and Pensions committees after a 17-month investigation — found that communications consultants billed the government rates of up to $380 per hour.
The report comes on the heels of a Health and Human Services Office of Inspector General report in July that said Verma violated federal regulations in her use of external communications contractors.
“In less than two years, Administrator Verma’s consultants charged CMS nearly $6 million for work that included boosting her public profile and personal brand, serving as her preferred communications advisors, arranging private meetings for her with media personalities and other high-profile individuals, and routinely traveling with her to events across the country,” the new report reads.
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.
“Administrator Verma misused funds appropriated by Congress and wasted taxpayer dollars intended to support critical federal health care programs,” Energy and Commerce Chairman Frank Pallone, Jr. of New Jersey; Oversight and Reform Chairwoman Carolyn B. Maloney of New York; Finance ranking member Ron Wyden of Oregon; and Health, Education, Labor and Pensions ranking member Patty Murray of Washington said in a joint statement. “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.”
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.”
The report found that the consultants included Brett O’Donnell, Keith Nahigian, Ken Nahigian, Marcus Barlow and Pam Stevens.
The report also found Barlow, who was previously Verma’s spokesperson while she ran her Indiana consulting firm, was heavily involved in communications. The White House reportedly blocked Verma from hiring Barlow as communications director due to critical comments he made about President Donald Trump, but through his consulting work, Barlow billed CMS at a rate that would amount to more than twice the $179,700 annual salary of the agency’s top communications official.
The report also found that Stevens, one of the consultants, worked directly with the Republican National Committee to push positive coverage of the administrator. For example, in 2018, Stevens asked the RNC to blast out a Boston Herald profile of Verma to its entire mailing list.
Federal resources cannot be used to coordinate with political campaigns.
Additional documents in the report also show that CMS communications staff deferred to the consultants on interactions with the media. The report notes that the Office of Communications is intended to be the senior adviser on these issues to the administrator.
The report alleges that these CMS expenditures on communications consultants may have violated appropriations law.
“Documents indicate that, in multiple instances, CMS’s expenditures on private communications consultants were made to benefit Administrator Verma personally beyond her role as CMS Administrator and therefore appear to violate the prohibition on use of appropriated funds for personal expenses,” the report states.
A proposal from Stevens, one of the consultants, detailed efforts to promote Verma’s public profile and overall brand by meeting with media personalities and other high-profile individuals.
The report also notes the use of consultants to advise Verma on her personal brand included planning on getting her nominated for the women’s magazine Glamour’s “Woman of the Year” award and arranging a taxpayer-funded “girls’ night” event in Verma’s honor.