Congressman calls for OIG investigation into CMS administrator consultant contracts

Seema Verma
A Politico report said Seema Verma quietly directed millions of taxpayer dollars in contracts with Republican communications consultants. (HIMSS)

Energy and Commerce Committee Chairman Frank Pallone Jr., a Democrat from New Jersey, is calling for the Office of Inspector General to investigate reports that CMS Administrator Seema Verma directed millions of dollars in contracts to outside Republican communications consultants.

Pallone issued a statement Friday calling for an investigation following a Politico story also published Friday reporting that Verma, who was appointed by President Donald Trump to head CMS, quietly directed millions of taxpayer dollars in contracts with Republican communications consultants, including hiring one well-connected GOP media adviser to bolster her public profile.

“The communications subcontracts approved by CMS Administrator Verma—routed through a larger federal contract and described to POLITICO by three individuals with firsthand knowledge of the agreements—represent a sharp break from precedent at the agency,” Politico reported.

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The deals came in some cases over the objections of CMS staffers, Politico also reported. CMS has its own large communications shop, including about two dozen people who handle the press.

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“These contracts are a highly questionable use of taxpayer dollars. Given that this agency should be spending tax dollars to ensure Americans can access quality health care, it is particularly egregious that it is using millions to ensure its Administrator has access to outside public relations and image building services,” Pallone said in a statement. “I intend to ask the HHS OIG to immediately begin an investigation into how these contracts were approved, whether all regulations and ethical guidelines were followed, and why taxpayers are stuck paying for these unnecessary services.”

“This is not the way to drain the swamp,” Pallone said.

CMS’ use of outside contracts and subcontracts is legal, the Politico report said, but raises transparency and ethical concerns with the use of taxpayer funds.

Andy Schneider, a Medicaid expert who worked at CMS during the Obama administration and is now a researcher at Georgetown University, told Politico: “Outsourcing communications work to private contractors puts the agency's ability to protect ‘potentially market-moving’ information from premature disclosure at considerable risk."

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Politico reported that the subcontracts are part of a $2.25 million contract administered by Porter Novelli, an international public relations firm. CMS’ new top communications official Tom Corry confirmed the arrangement, the report said. Two other individuals said CMS also spent at least $1 million on earlier contracts with GOP communications consultants.

One subcontract is with Pam Stevens, a longtime GOP media adviser who specializes in setting up profiles of Republican women, Politico reported, and a second subcontract is with Marcus Barlow, whom Verma worked with in Indiana and considered hiring as a top communications official in 2017 before he was blocked by the White House.

According to the Politico report, two individuals with knowledge of their contracts said Stevens and Barlow are paid between $185 and $200 per hour—a far higher pay rate than the majority of high-level government officials.

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