High-Paid FSSA Consultant Has Two Masters: Who Would Have Thought?

Seema Verma leading a state health care policy panel discussion 

Those of you familiar with my reporting on this blog know that I've discussed the Family & Social Services Administration and the tangled web of conflicts of those entrusted at the highest levels of the agency. I devoted considerable time discussing former FSSA Secretary Mitch Roob, who left a high-paying executive job at ACS to run the agency at the beginning of the Daniels administration. Roob knew that he planned to privatize the agency's welfare services when he took the job, and by no accident his former employer wound up in the driver's seat on that lucrative contract worth hundreds of millions of dollars. Similarly, one of Roob's successors, Mike Gargano, had a history of performing work both as a consultant to FSSA and to others like ACS who did business with the agency before he joined the agency the first time, and during the short period of time he left the agency during Debra Minott's brief tenure at the beginning of Pence's administration.

It turns out that there is another high-paid consultant who has been with the agency since the days of the O'Bannon administration who has an equally troubling conflict of interest. The Star's Tony Cook has an excellent investigative story describing the two masters FSSA consultant Seema Verma has been serving for some time. Verma is the owner of SVC, Inc., a business which lists its business address at her upscale home in The Woods at Williams Creek subdivision in Carmel where I'm pretty sure the covenants don't permit you to operate a business. As Cook's story points out, she and her company's employees share offices within FSSA's state office building offices downtown to perform their high-level health care consulting role for the agency. Prior to becoming an FSSA consultant, Verma served as Vice-President of Policy & Planning for the Marion Co. Health & Hospital Corporation where Mitch Roob once served as CEO. According to Cook, Verma has assumed the state's lead role in developing the Healthy Indiana Plan, Indiana's alternative health insurance plan to Obamacare.

So what's the problem? Well, according to Cook's story, Verma has been consulting another IT company doing business with FSSA at the same time she and her employees occupy offices in the state office building as a captive agency contractor. Under a contract with HP, Verma can earn up to $1 million, which is a drop in the bucket for the nearly $500 million HP has won in state contracts during her tenure as FSSA's chief health policy consultant. Verma's state contracts for health care consulting have totaled more than $3.5 million to date, over $1 million of which she earned in the last year alone. What is disturbing is that Verma's role as a consultant to HP was fully disclosed and signed off on by state officials as totally kosher. A spokesperson for Gov. Pence defended Verma, noting that she has "played a valuable role in the state's health care policy since the O'Bannon administration." Verma's paid spokesman, Lou Gerig, tells Cook that her role as a subcontractor to HP was spelled out in HP's contracts with the state.

According to Cook's story, her power and influence within FSSA cannot be understated. It sounds like her obvious conflict of interest might not have even come to light had she not butted heads with former FSSA Secretary Debra Minott. It was Minott who lost her job, not Verma. Cook says that Verma's contractual role with HP came as a big surprise to Minott when she discovered it in 2013 after a dispute over one of its invoices. According to Minott, HP dispatched Seema to visit the agency's CFO about resolving the disputed invoice. "I was troubled because I thought Seema was our consultant," Minott told Cook.

Ethics experts agree there is a problem with Verma serving two masters. State lawmakers to whom Cook spoke were also surprised to learn of the arrangement, both as to the size of her contract and the dual, conflicting consulting role. Cook's story doesn't touch on this point, but I noticed that several of the employees listed on SVC's website are former employees of FSSA. Stephanie Baume worked in the Office of Medicaid Policy & Planning where she administered the Hoosier Heathwise plan before joining SVC. Nicole Spears worked as an integration manager within OMPP before joining Verma's company. Kelly Greene served as FSSA's general counsel before she joined SVC. It's no wonder she wields so much power within the agency. People can leave the state payroll and join her firm as consultants to their former employer earning more than they earned in their prior roles as state employees.