In the spring, the Department of Health and Human Services contracted UnitedHealth Group to distribute billions of dollars in CARES Act funds to health care providers across the country. The choice drew scrutiny, since HHS already had mechanisms to distribute payments to providers, and the third-party role offered UnitedHealth unique advantages during the pandemic.
American Oversight has obtained records that include versions of the contracts between HHS and UnitedHealth, along with communications that raise questions about the involvement of former White House economic adviser Stephen Parente.
The first contract included in the documents, dated April 6, 2020, and effective April 7, formed “a preliminary agreement between the Health Resources and Services Administration and United Healthcare Services” and authorized UnitedHealth to “immediately begin the activities necessary to … process and and pay claims from eligible health care providers.” It referenced UnitedHealth having submitted a proposal on April 5, with discussions between the parties having taken place between April 4 and April 7.
Aligning with Politico’s reports, the April 6 contract stated, “Consistent with the April 5, 2020 proposal, the firm fixed price under the definitized contract will be $1,000,000.” The records don’t show any negotiations or back-and-forth about fees.
The second contract was dated on April 16, one day after UnitedHealth submitted the proposal. It included placeholders for information such as how UnitedHealth planned to host systems for the program. Neither contract indicated that UnitedHealth would be collecting demographic data, which could help shed light on the disproportionate impact the pandemic has had on racial minorities.
Politico reported that one of the administration officials charged with making decisions regarding the disbursement of funds was Stephen Parente, then an economist at the Council of Economic Advisers who previously served as a consultant to UnitedHealth. A CEA spokesperson told Politico that Parente was not responsible for the decision to contract UnitedHealth.
But the records show that Parente was, at the very least, invited to meetings between UnitedHealth and HHS officials. Some invitations suggest collaboration between HHS and UnitedHealth, including one for a meeting titled “HHS/UHG Payment Integrity.” Another meeting request, called “UHG/HHS Critical Path Execution,” included an agenda that listed topics including “Contract” and “Funds” — Parente’s name appears next to “Provider File.” Parente was also included on a “UHG/HHS PPSI Daily Standup” meeting. Each of those meeting notices is undated.
According to the records, officials also included Parente on communications with UnitedHealth officials. On April 7, he was looped in on an email from Denise Gillson, a UnitedHealth official who asked HHS officials to “provide clarity to our UHG team” on a matter.
On April 14, Tracy Berg from UnitedHealth asked to confirm something with Parente and Will Brady, then the chief of staff to the deputy secretary at HHS. After Brady responded, Berg sent a screenshot of the details to HRSA officials Tina Cheatham, Alexandria Garcia, and Thomas Engels. The subject line on the email is “Re: # for Phase 1 – over $30B,” which is the amount HHS announced would be distributed in the initial phase of relief funding delivery. In December, UnitedHealth hired Brady as vice president for digital at Optum, a subsidiary that helped distribute these funds in April.
You can read more about the latest on the Trump administration’s pandemic response at American Oversight’s Covid-19 Oversight Hub.