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Prior Experience Led To Gruber Hiring

Documents obtained by Watchdog Wire through a CORA request indicate that MIT economist Jonathan Gruber’s work with other state exchanges and role in developing Obamacare played a significant part in his winning a $305,000 contract with Colorado’s Health Insurance Exchange.  The evidence supports the conclusion that Gruber succesfully leveraged his consulting work developing the ACA into later contracts with the state exchanges, including Colorado’s, and bolsters claims of a conflict of interest.

In her technical evaluation of Gruber’s proposal, the Exchange’s Data Advisory Working Group (DAWG) member, Jennifer St. Peter wrote:

Vendor outlined experience working with states in varying capacities, including consultation regarding state health reform, establishment of exchanges, and actuarial analysis for multiple states for Medicaid and other public health programs. Offeror displays a vast understanding of ACA…. Nearly every participant in this proposal were involved in the establishment of the MA [Massachusetts] Exchange, and most indicate that they are now involved with some level of consulting for the establishment of exchanges in other states.

Another evaluator noted in his report that, “The company does have the experience to successfully complete project.”  A source familiar with the DAWG’s deliberations said that Gruber’s experience with other states figured prominently in the group’s discussions.

That same source said that the groups had learned of the January, 2010 controversy surrounding Gruber and his failure to disclose $400,000 in consulting fees for designing Obamacare, even as he was writing New York Times and Washington Post opeds advocating for the law, and as his research was being touted as objective and independent.

Initially, the DAWG received seven proposals in response to its Request for Proposals (RFP), all within the stated budget range of $250,000 – $375,000.  After deliberations, two finalists, Milliman and MIT’s Gruber, were selected for in-depth evaluation. The Milliman proposal was budgeted at $324,750, Gruber’s at $305,400, with $240,000 going to Gruber himself, and $60,400 going to Wakely Actuarial.

Four group members—Jennifer St. Peter,  Tony Gagliardi, John Barela, and Kelly Shanahan Marshall—were chosen to conduct detailed technical review of the finalists, using a detailed scoring system.  Three of the four scored in favor of Gruber, while one – Mr. Gagliardi – preferred Milliman.

Their comments indicate that Gruber’s experience was a factor, but not the only factor.  While some committee members voiced some concerns over Gruber’s lack of familiarity with Colorado, and how he would actually conduct the analysis, Milliman was also an out-of-state company, and such follow-up questions are not uncommon for any contract evaluation process.

One member of the DAWG, Mary Hegemann, was and remains a Senior Actuary for Wakely.  However, anticipating a conflict, she recused herself before the RFP was even published, only rejoining the group after the awardee was announced.  Minutes from the DAWG also indicate that other members had conflicts with other proposals under consideration; members with conflicts were not given those proposals to comment on.

Joshua Sharf

Joshua is co-editor of Watchdog Wire - Colorado. Contact him at Colorado@WatchdogWire.com to learn how to get involved with citizen journalism in the Boulder State. Follow him on Twitter: @joshuasharf

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Categories: Healthcare, Must Read, Uncategorized
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