HHS Not Responsive To Congressional Inquiry About Contractors and Obamacare Data

By Fred Lucas | January 9, 2013 | 2:31 PM EST

Health and Human Services Secretary Kathleen Sebelius. (CNSNews.com/Penny Starr)

(CNSNews.com) – Congress is scrutinizing the private firms hired to implement parts of Obamacare, -- particularly a subsidiary of insurance firm UnitedHealth Group, which will hold the customer data for health care plans in the exchanges required under the law -- but the Department of Health and Human Services (HHS) has been less than forthcoming, according to lawmakers.

The HHS failed to comply with a Jan. 4 deadline to provide information on the contracts regarding health care exchange data to House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and Sen. Orrin Hatch (R-Utah), the ranking member of the Senate Finance Committee.

The Centers for Medicare and Medicaid Services (CMS) awarded a contract to Quality Software Services Inc. (QSSI), which is a subsidiary of UnitedHealth Group, to build a “federal data services hub” for the health care exchanges that must be established no later than Jan. 1, 2014.

The Patient Protection and Affordable Care Act (a.k.a. Obamacare) requires a data hub to collect information from customers who are buying government-approved insurance plans on the exchange. The information includes income data, health history, and family characteristics of each customer.

Members of Congress are concerned that UnitedHealth Group could use the information for competitive advantage. But the customer data will not be misused, UnitedHealth Group spokesman Matt Stearns told CNSNews.com.

“We are grateful for the hundreds of customers large and small who, for more than two decades, have trusted us with their sensitive business matters,” Stearns told CNSNews.com in a written response. “Putting our customers’ secure and proprietary interests first is a hallmark of our service and has earned us the strong confidence and trust of those we serve every day.”

“Our customers and system partners embrace our solutions and services because of the value, expertise and trusted partnership we provide,” said Stearns. “We look forward to responding to the Committee’s questions.”

A Dec. 20, 2012 letter from Issa and Hatch asked HHS Secretary Kathleen Sebelius to produce “a complete list of all contractors and subcontractors selected by HHS to build or provide support services to the federal exchanges and the federal data hub,” by Jan. 4.

Hatch first inquired about the matter in a letter to Sebelius on Oct. 19, 2012, giving her a deadline of Oct. 26 to respond, which she also did not meet.

House Oversight and Government Reform Chairman Darrell Issa (R.-Calif.) (AP Photo/J. Scott Applewhite)

“We have not received any response from HHS regarding our letters,” Hatch spokeswoman Julia Lawless told CNSNews.com.

Hatch and Issa, in a separate Dec. 20, 2012 letter to Sebelius specifically targeted information about QSSI (the first letter on the same day asked for information on all data contracts).

The Dec. 20 letter cited a Nov. 3, 2012 article in The Hill newspaper that said the health care industry insiders were concerned about UnitedHealth having a role in allocating federal funds among rival health insurance companies.

The same letter cited another Dec. 10, 2012 article in The Weekly Standard that said HHS began to establish a firewall between UnitedHealth and QSSI’s data hub, but later suspended the firewall.

The letter from Issa and Hatch further cited a former HHS official who went to work for another UnitedHealth subsidiary, OptumInsight.

“Steve Larsen’s departure from his position as Director of the Center for Consumer Information and Insurance Oversight to work for OptumInsight, a UNH subsidiary, right around the time UNH acquired QSSI presents another potential conflict of interest,” the letter from Hatch and Issa said. “The degree to which Mr. Larsen was involved in the QSSI acquisition is unclear, but the timing of his career change raises several questions about CCIIO.”

In an e-mail, CNSNews.com provided a link to the Hatch-Issa letter and asked UnitedHealth spokesman Stearns, “Did HHS and/or CMS establish a firewall between UnitedHealth and QSSI? And did HHS and/or CMS ever suspend that firewall?”

CNSNews.com further asked for a response to what the Hatch and Issa letter said about former HHS employee Larsen going to work for OptumInsight.

Stearns responded, “We’ll decline to comment on those questions.”

An HHS spokesman on Friday referred CNSNews.com to the CMS. A staff person in the CMS media relations office asked for written questions to be submitted on Friday. CMS did not respond to calls or e-mails on Monday from CNSNews.com and did not respond before this story was posted.

House energy and Commerce Committee Chairman Fred Upton (R-Mich.).

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) sent an inquiry to Sebelius on Nov. 13, 2012, seeking more information on QSSI.

Then, on Dec. 10, 2012, Upton and Sen. Charles Grassley (R-Iowa), the ranking member of the Senate Judiciary Committee, sent identical letters to both UnitedHealth Group CEO Stephen J. Hemsley and QSSI Chairman Tony Singh asking, “What steps, if any, has QSSI taken to identify and mitigate potential conflicts of interest related to UnitedHealth Group’s Purchase of QSSI and its contract with CMS?”

The UnitedHealth Group’s political action committee does not show any strong political leanings in one direction, according to campaign finance data from the Center for Responsive Politics, which show the PAC gave $30,000 each to the Democratic Congressional Campaign Committee, the National Republican Senatorial Committee, the Democratic Senatorial Committee and the National Republican Congressional Committee during the 2012 election cycle.

The UnitedHealth Group PAC also gave $10,000 each to the Freedom Project PAC, affiliated with Republican House Speaker John Boehner and to the Searchlight Leadership Fund, the PAC affiliated with Democratic Senate Majority Leader Harry Reid.

The company’s PAC did not contribute to presidential candidates, but contributed $62,500 to Democratic Senate candidates and $59,500 to Republican Senate candidate. The company’s PAC gave $176,500 to House Republican candidates and $134,000 to House Democrat candidates.