Leaders of the House Committee on Oversight and Government Reform have issued a rare subpoena to Health and Human Services Secretary Kathleen Sebelius demanding documents on the $2 billion Obamacare health care co-op program, The Washington Examiner has learned.
The subpoena that was issued late Friday "requires HHS to produce all documents related to the reviews which assessed each CO-OP applicant's financial viability, as well as communication between HHS employees, contractors and Executive Office employees discussing the applicants' financial viability or ability to repay the CO-OP loan," according to a committee statement released today.
The action continues a year of tension between the oversight committee and HHS over the latter's management of the controversial co-op program.
In a June 7 letter, the committee said "we have yet to receive a single responsive document" to all their earlier requests, adding, "This delay is unacceptable and your lack of transparency is troubling."
Since October 2012, the committee has sent three formal letters to HHS seeking documents about HHS's management of nearly $2 billion in tax-free loans to fund 24 new non-profit co-ops under Obamacare.
The first letter was sent October 23, 2012 and a second on March 25, 2013. The June 7 letter was the third.
In its June 7 letter - signed by Chairman Darrell Issa, R-Calif., and subcommittee chairmen Rep. Jim Jordan, R-Ohio, and Rep. James Lankford, R-Okla. — the committee warned if HHS did not produce the requested material by June 11, "the committee will consider compulsory process."
The committee subpoena issued June 14 requires HHS to produce all co-op documents the lawmakers have previously requested. But they also seek the release of reviews completed by the consulting firm Deloitte Consulting of each co-op applicant's financial viability.
Oversight committee staff conducted an in-camera review last April of the Deloitte evaluations. The analyst conclusion "raises serious questions and concerns" about the selection process, the lawmakers stated in their June 7 letter.
Committee staff found many of the applicants displayed serious financial weaknesses and raised questions about their future solvency or an ability to repay their loans.
A White House Office of Management and Budget study estimated that up to 43% of all co-ops could default.
Citing the prospect of financial insolvency, on May 22 Vermont's insurance commissioner denied a license to a Vermont co-op that HHS had awarded $33 million. The commissioner also uncovered a sole-source, non-compete contract between the co-op's president and his company, which the state determined, was "illegal."
A Washington Examiner series on the health co-ops has revealed that top co-op leaders have experienced bankruptcy, forced closures by state regulators, sanctions for insider trading, poor consumer service and even factious resumes.
The committee findings convinced the lawmakers that the HHS award process was "flawed" and "taxpayers a significant amount of money awarded through the program."
The committee has separately asked for information directly from 13 of the 24 co-ops.