Spends millions on GOP-connected consultants

Key Trump health official spends millions on GOP-connected consultants

Seema Verma employs a team of private consultants who write her speeches, polish her brand and travel with her across the country.

By ADAM CANCRYN and DAN DIAMOND

The Trump appointee who oversees Medicare, Medicaid and Obamacare quietly directed millions of taxpayer dollars in contracts to Republican communications consultants during her tenure atop the agency — including hiring one well-connected GOP media adviser to bolster her public profile.

The communications subcontracts approved by CMS Administrator Seema 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. Those deals, managed by Verma’s deputies, came in some cases over the objections of CMS staffers, who raised concerns about her push to use federal funds on GOP consultants and to amplify coverage of Verma’s own work. CMS has its own large communications shop, including about two dozen people who handle the press.

Verma, a close ally of Vice President Mike Pence, has become a lightning rod for pushing work requirements in Medicaid and spearheading the Trump administration’s efforts to unilaterally unwind pieces of Obamacare. She previously worked as a consultant to conservative states seeking to reshape health care programs for the poor.

Her agency’s use of outside contracts and subcontracts is legal, but experts and current officials say it is not transparent and raises ethical questions.

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

And whether the issue was Medicare, Medicaid or Obamacare, prior heads of the agency were often quoted, profiled and in the news, so current officials said they’re puzzled why so much work is being outsourced.

“The head of Obamacare doesn't need outside consultants to get reporters to talk to her,” said one CMS official, who asked for anonymity. “The job pitches itself.”

The subcontracts are part of a $2.25 million contract administered by Porter Novelli, an international public relations firm that performs a wide variety of government services. CMS’ new top communications official Tom Corry confirmed the arrangement. 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. 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.

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

A third contract is with Nahigian Strategies, a firm run by a high-profile pair of brothers. Keith Nahigian consulted with several GOP presidential campaigns; Ken Nahigian briefly led President Donald Trump’s presidential transition team in 2017. Nahigian Strategies staff have supported and advised Verma on messaging strategy for nearly two years, including accompanying Verma to Denver on Tuesday for meetings with digital health experts and CMS staff. One individual familiar with the relationship said Nahigian Strategies was paid at least $2 million for its work with CMS over the past two years.

Stevens, Nahigian Strategies and Porter Novelli referred questions to CMS. Barlow declined to comment for this article.

In an interview with POLITICO, Verma’s newly installed communications director Corry couldn’t specify how much CMS had spent on GOP communications consultants, but stressed that he planned to cut them back now that the agency had personnel in place — after a slow start early in the Trump administration.

“Now that we’re fully staffed up, contractor resources are going to be used less than they were,” said Corry, who ran a health care consulting firm before joining CMS on March 4 to head its 200-person communications office. Their work includes running consumer-facing websites.

“We use our resources judiciously,” Corry said. “We’re not wasting the taxpayer dollar.”

While Corry said he wasn’t sure about overall spending on communications consultants, “it’s a small number compared to all the contracts we have,” he said.

Federal agencies are not required to proactively disclose arrangements with subcontractors, or even that those subcontractors exist — a gray area that gives them broad leeway to bring on individuals and outside firms under the cover of vague public contracts. For instance, public spending records describe the Porter Novelli contract simply as “strategic communications.”

But some career CMS staff have voiced their concerns to political appointees within the agency about routing taxpayer dollars to GOP consultants and helping a federal official like Verma improve her personal brand, said two individuals aware of those conversations. Oversight groups also have raised concerns, saying the behavior, as described to them by POLITICO, would appear to cross ethical lines.

"There are a host of ethical and contractual problems with appointees steering contracts to political allies and subcontractors, and possibly a violation of the ban on personal services contracts if the work is being performed at the direction of the appointee,” Scott Amey, general counsel of the Project on Government Oversight, told POLITICO. “Contracts are supposed to be above reproach, with complete impartiality, and without preferential treatment, and the HHS Inspector General should review this [Porter Novelli] contract and the activities under it to ensure they are proper."

In her two years leading CMS, Verma has drawn attention for regularly criticizing Obamacare — a law she administers — as well as trading Twitter barbs with Democratic lawmakers and mocking progressive ideas like “Medicare for All.” She also has battled with health experts, including the committee created to advise Congress on Medicaid, which broadly has warned the administration’s push to shrink government health programs will reverse coverage gains made under Obamacare.

Verma recently completed several interviews, arranged by Stevens, that focused on emphasizing her personal life and her role as a prominent Republican woman. The cover profile in this month’s AARP bulletin, which went to more than 24 million people, included a sidebar on Verma’s husband’s experience in the health system.

Consultants help shape CMS strategy

Before the Trump administration, communications consultants were used mostly for sweeping agency priorities, like raising awareness of Medicare open enrollment or encouraging sign-ups for the Affordable Care Act, five current and former officials said.

CMS’ current use of communications contractors has gone well beyond the norm, those five sources said, and comes at a time when Verma has made cuts elsewhere, such as reducing advertising for Obamacare enrollment by tens of millions of dollars. The outside consultants frequently handled Verma’s media calls, joined her on promotional trips and wrote her speeches.

Those functions historically were performed by career civil servants in the CMS Communications Office.

"We have no idea who some of these people are and why they're in meetings with the administrator," said one senior CMS official, who asked for anonymity. "They're not introduced … It's become a guessing game for us."

The GOP consultants also brought a political edge to the agency’s communications.

In a February 2018 incident, contractor Brett O'Donnell barred a Modern Healthcare reporter from a media call for refusing to alter a story that had rankled Verma. CMS officials walked back that threat within days and said a week later that Porter Novelli’s subcontract with O’Donnell, a longtime GOP consultant, would not be renewed. But CMS never provided any explanation of O’Donnell’s role or responsibilities. O’Donnell declined to comment for this article.

Corry said Porter Novelli handled finding consultants including O’Donnell, Barlow and Stevens and the finer details of their contracts. “We have no idea what they’re paid per hour,” he said.

Stevens — a former Condoleezza Rice aide who did two short stints in the Trump administration in 2017 — pitched Verma to media outlets like Fox News, CBS and NBC, as well as for events hosted by the Milken Institute and other organizations. Widely known for her extensive Rolodex, Stevens generally has avoided the health journalists who regularly cover CMS in favor of brokering conversations with media executives or lifestyle reporters, and shepherding Verma to after-hours networking events with prominent journalists.

She also came to CMS with a reputation for securing flattering profiles of Republican women, an effort she developed as a House GOP strategist and continues to cultivate as a consultant. “Proud to have made this great piece happen,” she posted on Facebook on Feb. 20, linking to a Glamour magazine article about Rep. Elise Stefanik’s (R-N.Y.) effort to recruit more Republican women to Congress.

Stevens has played a similar role securing opportunities for Verma to showcase her work within the administration. In recent weeks, her outreach led to Verma’s appearance on POLITICO’s “Women Rule” podcast, which profiles women leaders, and she worked on Verma’s appearance on a panel hosted by Woman’s Day magazine. (Verma’s interview at a POLITICO policy event last July predated Stevens’ involvement with CMS.)

CMS’ Corry said Stevens was used to book interviews for Verma but is being phased out. “Her time is getting less and less anyway,” he said. Corry also noted that he has his own network after 25 years in the field, including being friendly with the editor of The Wall Street Journal’s opinion section and other reporters, and could fill Stevens’ role.

Nahigian Strategies, a GOP-aligned public relations firm, has managed a wide variety of CMS communications functions for nearly two years. Its consultants have set up meetings and accompanied Verma around the nation to promote her key projects, like a March 2018 trip to a Las Vegas health technology conference to unveil Verma’s digital health initiatives aimed at giving patients easier access to their own medical records.

“Check out this op-ed placed in Recode on how the @RealDonaldTrump admin is leading in giving patients their health info,” the Nahigian Strategies Twitter account posted a week after the Las Vegas trip.

CMS’ Corry said the Nahigian Strategies team helped Verma with travel, planning and other logistical issues. “It’s pretty basic stuff,” he said.

Verma also relied on subcontracting to bring aboard longtime associate Barlow — after the White House blocked him from a permanent job leading CMS communications. Barlow, who served as a spokesperson for Verma's health care consulting firm in Indiana, had run afoul of the White House for writing a column critical of Trump, POLITICO reported at the time.

Nahigian Strategies hired Barlow instead in March 2017, which helped the firm strengthen its relationship with Verma. When Barlow left Nahigian Strategies in August 2018 to return to his own consulting firm, he continued to work for CMS under a separate subcontract that remains in effect, according to two individuals with knowledge of the arrangement.

Barlow helped write some of Verma’s most high-profile speeches, including a November 2017 address in which she signaled the Trump administration’s plan to require some Medicaid enrollees to work to keep their coverage for the first time — a controversial policy that a federal judge blocked for the second time on Wednesday.

“Believing that community engagement requirements do not support or promote the objectives of Medicaid is a tragic example of the soft bigotry of low expectations consistently espoused by the prior administration,” Verma said in the speech that Barlow helped write. “Those days are over.”

Advocates panned Verma’s remarks, contending she misrepresented the patients that she was appointed to serve. The speech “was rife with offensive rhetoric about the Medicaid program and individuals enrolled in it,” the National Women’s Law Center said.

Verma’s remarks also stunned Schneider, the former Obama appointee — who called them “reprehensible” at the time. But Schneider said he’s more surprised to learn that Verma and her staff don’t always write their own speeches, like CMS did when he worked there in 2016.

"I actually thought that her [Medicaid] speech was in her own voice," he said.