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Legislators unhappy with lack of transparency by state insurance exchange board

Legislators unhappy with lack of transparency by state insurance exchange board

Idaho Freedom Foundation staff
November 14, 2013
[post_thumbnail]Rep. Doug Hancey, R-Rexburg, is not happy with the lack of transparency by the state insurance exchange board and intends to voice his displeasure to Rep. Kelley Packer, R-McCammon, a member of the exchange board.

In the aftermath of Tuesday’s meeting of the board of directors for Idaho’s government-run health insurance exchange, more details have emerged about what led up to the controversial awarding of a $375,000 contract to a former member.

One result is that some members of the Idaho Legislature are expressing their displeasure with the behavior of the board members and are demanding more transparency.

“Amy and I talked about it,” Stephen Weeg chairman of the exchange board, said. Weeg spoke with IdahoReporter.com Wednesday about board member Dr. John Livingston’s disclosure that executive director Amy Dowd did not act independently when she granted a $375,000 contract to former board member Frank Chan. Livingston, a Boise physician, said she sought input on the decision from the governor’s office, the Hawley Troxell law firm (the exchange’s legal counsel) and from Weeg himself.

“Yes, we had a conversation,” Weeg continued. “A mistake was made. We’re now moving forward. We cancelled the contract (the contract with Chan), we stopped all further work with him. We’ve taken two of the very recent board meetings to tighten up procurement policies to make it work as effectively as possible.”

Livingston said at Tuesday’s board meeting and at an Oct. 22 board meeting that Dowd had consulted with Gov. Butch Otter’s office before offering the controversial contract to Chan.

The governor’s office did not deny that such a meeting occurred, but instead focused on the resignation of Chan from the exchange board.

“Amy Dowd met with the governor’s senior special assistant on health care to discuss the process that needed to be used for Mr. Chan’s resignation from the board,” Hanian told IdahoReporter.com Wednesday via email. “Amy Dowd was told that we would need a letter of resignation from Mr. Chan. Our office was informed at that meeting that he would resign and that we would be receiving his letter of resignation. That was the extent of the meeting. It lasted five minutes.”

In light of his announcement Tuesday that results of the outside investigation of Dowd will not be made public, IdahoReporter.com asked Weeg if he believed Idahoans have a right to know the investigation’s findings. “The findings of the investigation are protected under attorney-client privilege,” he stated. “What I believe about this is irrelevant, we have to follow the law.”

Concealing the investigation results is not setting well with some members of the Legislature.

“My constituents absolutely have a right to know about this,” Rep. Doug Hancey, R-Rexburg, stated when contacted by IdahoReporter.com. “This whole thing (the federal Obamacare launch) has gotten a lot of bad press nationally, yet this is why we created a state-based exchange so we’d have Idahoans serving the interests of Idahoans. I think full disclosure is imperative here so we assure Idahoans that we’re above-board with our exchange.”

Hancey said that he would be meeting with Rep. Kelley Packer, R-McCammon, a member of the exchange board. “I will make it clear to Ms. Packer how strongly I feel about this,” he stated.

Rep. Frank Henderson, R-Post Falls, sees the matter differently. “I have confidence in the board of directors. They are honorable people and are dedicated to doing a very good job for the public. I will assume that the investigation involves personnel matters and that, subsequently, many of the details will remain confidential. That is standard practice.”

But House Majority Leader Mike Moyle, R-Star, said that the insurance exchange is a unique entity and is not subject to the same rules and procedures as conventional state government agencies.

“This is exactly what I was concerned about,” he told Idaho Reporter.com Wednesday. “I think they found a little loophole by saying that this involves a personnel matter and by doing that we don't get the information of what happened. I’d like to know what happened so it doesn’t happen again, but because the exchange is a corporate body politic (the technical term for a quasi-governmental entity), they can make up their own rules.”

In March, Moyle had debated against the legislation that created the exchange, noting that the exchange board members would be “unelected and unaccountable.”

Sen. John Tippets, R-Montpelier, told IdahoReporter.com that he wants to know more about the situation. “Admittedly, what happened with the Chan contract was surprising,” he commented, “but I’d like to hear their (the board of directors) side of the story. I think the investigation was an appropriate step to take.”

Sen. Marv Hagedorn, R-Meridian, is more critical in his assessment of the board’s conduct, but also acknowledges that personnel issues with government employees are typically off limits for public disclosure.

“I'd like to find a better word than disgusting to describe the Chan contract,” Hagedorn stated. “I was very disappointed about it. But I think one of the things we have fallen victim to is trying to get too much done in too short a period of time. I suspect the exchange was so focused on becoming operational that it didn’t get personnel procedures in place quickly enough. When investigations like this come up, the results usually cannot be made public.”

Members of the Senate will be scrutinizing the insurance exchange during next year’s legislative session. According to remarks made by Idaho deputy attorney general Brian Kane on May 21, Otter was able to appoint board members to the exchange and have them begin serving immediately without Senate confirmation because the appointments were made after the 2013 legislation session had ended. Kane added, however, that he “presumed” that Senate confirmation for the board members would be necessary in 2014. Senate Pro Tem Brent Hill, R-Rexburg, noted at the time that “I suspect we will probably need to hold a vote on this next year.”

“If we are to have a confirmation hearing, then I will support a hearing,” Tippets told IdahoReporter.com when asked if he had any reservations about confirming the current board members. “Confirmation hearings give the members of the Senate the opportunity to asks questions of those who are being considered for confirmation. If I have concerns, I will ask questions in that process, but for now I will reserve judgment.”

Hagedorn, on the other hand, is more critical of the exchange board. “It is absolutely a concern, and I will have very pointed questions for the board members,” he said of confirmation hearings. “In my opinion, past behavior will be a very good indicator of future behavior, and that's what I try to focus on in confirmation hearings. Thus far we have seen huge red flags.”

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