(Adds letter from Hatch and Grassley in sixth paragraph.)
June 20 (Bloomberg) -- The UnitedHealth Group Inc. executive whose Optum division helped states and the federal government fix Obamacare health exchanges will become second-in- command at the agency that runs the U.S. program.
Andy Slavitt, Optum’s group executive vice president, was named principal deputy administrator at the Centers for Medicare and Medicaid Services, U.S. officials said. The company he comes from, UnitedHealth, is the nation’s largest health insurer.
The U.S. Department of Health and Human Services will also hire a chief executive officer and chief technology officer for the insurance exchanges, said Sylvia Mathews Burwell, who was approved by Congress as the HHS secretary on June 9, in a statement. Previously, no single person was in charge of the exchanges, a lack of accountability faulted by both foes and supporters of Obamacare after healthcare.gov was found to be riddled with technical errors.
The changes “bring additional operational and technological firepower and have a clear single point of contact in the marketplace CEO to streamline decision-making,” Burwell said in the statement.
In his new job, Slavitt will have broad responsibility for all of CMS’s operations, including Affordable Care Act programs, Medicare, the program for the elderly and disabled, and Medicaid, the program for low-income people. He will report to the agency’s administrator, Marilyn Tavenner.
Separately, two Republican senators sent letters to Tavenner yesterday questioning Optum’s role in the health exchanges. The senators, Charles Grassley of Iowa and Orrin Hatch of Utah, suggested it may present a conflict of interest for a UnitedHealth subsidiary to have a hand in running insurance exchanges while its parent company at the same time competes against other insurers in the marketplaces.
“We would like to ensure that all potential conflicts of interest are mitigated,” they wrote, requesting documents related to Optum’s contract with Tavenner’s agency.
A spokesman for UnitedHealth, Matt Stearns, declined to comment on the inquiry. A CMS spokesman, Aaron Albright, said in an e-mail that the agency has ensured Optum “has taken steps to meet standards required by federal acquisition regulations to prevent organizational conflicts of interest.”
Slavitt offered his company’s services to the Obama administration in late October as the federal website was floundering. The government hired Optum’s Quality Software Services Inc. unit as lead contractor for the site, and by December, it functioned for most customers.
The exchanges re-open for most Americans on November 15, and making sure the technology works on day one is Burwell’s top concern. The management shake-up for the Affordable Care Act programs marks her first major decision as secretary.
“Ensuring that the second open enrollment period is administered as effectively as possible must be a top priority, and it is most encouraging that Secretary Burwell is acting promptly towards that end,” Ron Pollack, executive director of Families USA, a consumer advocacy group in Washington that supports the health law, said in an e-mail. “These administrative improvements will enable the second enrollment period to build on, and to improve, the success of the millions of people who gained health coverage recently.”
States with exchange problems of their own began calling Optum soon after healthcare.gov was fixed, including Maryland, Minnesota and Massachusetts. The company was credited with helping each of the states enroll thousands of people in new Affordable Care Act health plans despite websites that barely functioned, if at all. Vermont hired Optum this month.
About 8 million people used the exchanges to sign up for private health plans by the end of April. UnitedHealth itself has a small footprint in the marketplaces, selling its plans in just five states this year. It plans to expand its exchange offerings in 2015.
“I am excited to join such a talented team and be part of such an historic opportunity to make a difference in the lives of millions of Americans who are impacted by CMS’ programs,” Slavitt said in an e-mail from a CMS spokeswoman.
Administration allies including the Center for American Progress and Ezekiel Emanuel, a former White House official now at the University of Pennsylvania, have previously urged Obama to appoint a CEO for the insurance exchanges.
“It is unclear whether decision-making authority resides with the White House, the Centers for Medicare and Medicaid Services, or the secretary of Health and Human Services,” Emanuel and Neera Tanden, CAP’s president, wrote in a May 17 report. “There still is no single leader who is accountable for successful implementation of the Affordable Care Act.”
The government hasn’t yet identified candidates for the exchange CEO and CTO jobs, officials said. The CEO will have responsibility for both federal and state exchanges, and will report to Tavenner, Slavitt and Burwell. Tanden and Emanuel recommended that the CEO report directly to Obama and to Burwell.
Kurt DelBene, a former Microsoft Corp. executive who has been managing the federal enrollment system since December, will leave the government at the end of this month. His job was always considered temporary and his departure isn’t related to Slavitt’s appointment, officials said.
Slavitt is the second UnitedHealth executive to recently leave the company for public service. Simon Stevens, who ran the company’s international business, was appointed in October to lead England’s National Health Service. He started on the job April 1.
“We are grateful to Andy for his contributions to Optum’s success and are sad to see him go, but we know his skills, experience and integrity will serve CMS and the American people well,” Brian Kane, an Optum spokesman, said in an e-mail.
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