Federal auditors sought documents related to troubled Md. health exchange launch

Noridian Healthcare Solutions, the company fired by Maryland officials after the disastrous launch of the state’s health insurance exchange, received a request from federal auditors last month to turn over documents related to the troubled project, chief executive Tom McGraw said Tuesday.

McGraw said in a statement that Noridian was “cooperating fully” with the July 30 request by the inspector general’s office for the Department of Health and Human Services, which has been auditing the use of federal funds in creating the Maryland Health Benefit Exchange.

McGraw’s statement came after Rep. Andy Harris (R-Md.), a fierce critic of the exchange and the federal health-care law that led to it, said that federal auditors had issued subpoenas as part of their review.

“The Office of Inspector General has moved this from an audit into a full-blown investigation,” he said in a statement. “Now we know that fraud may have occurred.”

Donald White, a spokesman for the HHS inspector general’s office, would not discuss whether subpoenas had been issued or what such a move would mean, citing agency rules that prohibit public disclosure of investigations while they are underway.

Harris spokesman Chris Meekins said members of the congressman’s staff were told about the subpoenas by an official in the inspector general’s office. He said he did not know the number of subpoenas, why they were issued or to whom.

Noridian declined to say whether the request it received came in the form of a subpoena or give other details. Timothy J. Long, an attorney for subcontractor EngagePoint, said the firm could neither confirm nor deny receipt of a subpoena or other request for information from the inspector general’s office. A spokesman for IBM, another subcontractor, did not respond to questions about possible subpoenas.

Health exchange spokesman Christopher Garrett said the agency has not received any subpoenas. State officials have been “in close communication” with the inspector general’s office, Garrett said, and are “helping in every way that we can.”

Harris called for a federal investigation of the exchange in February in response to significant problems that made it difficult for state residents to sign up for insurance under the new federal law. The state spent tens of millions of federal dollars on the system, which is being fixed at a cost of at least $40 million.

In March, Harris announced that the inspector general for Health and Human Services had agreed to perform an audit.

Harris mentioned the subpoenas in a Tuesday morning interview on WBAL Radio’s “The C4 Show” after a question about how the audit was proceeding.

“We understand that subpoenas have been issued,” he said. “So there is the real possibility of legal proceedings and, you know, illegal activity having gone on.”

Harris, who represents Maryland’s Eastern Shore and is up for reelection in November, is the state’s lone Republican in Congress. On the radio show, he said President Obama’s Affordable Care Act was running up the cost of health insurance and not delivering as promised.

Later in the day, Harris said the probe reflects poorly on Lt. Gov. Anthony G. Brown, who was tapped by Gov. Martin O’Malley to oversee the implementation of health-care reform in the state and is the Democratic nominee to succeed O’Malley.

“Lt. Gov. Brown was in charge of the exchange,” Harris said in the statement. “Those who wasted and abused taxpayer money, including politicians, must be held accountable.”

A senior aide to Brown said the lieutenant governor’s office was not subpoenaed. In the past, Brown has said that he was responsible for establishing a legislative framework for health-care reform but not for construction of the exchange Web site.

“It’s disappointing that Congressman Harris would mislead the people of Maryland and play political games with a federal investigation,” Brown campaign manager Justin Schall said in a statement. “Neither the Lt. Governor nor anyone in his office has received any communication or requests from the office of the Inspector General or any other federal agency.”

Jenna Johnson writes about Maryland politics, including the General Assembly, the administration of Gov. Martin O'Malley and the 2014 election.
Mary Pat Flaherty works on investigative and long-range stories. Her work has won numerous national awards, including the Pulitzer Prize.
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