Center for Open Government: Molina consultant recommended canceling MCO contracts while serving on Beshear's transition team
Ms. Parento created an “Executive Summary” that summarized the transition team’s work for use by the incoming administration … at the end of the document, Ms. Parento recommended stopping the implementation of the MCO contracts.
— Franklin County Circuit Court 10/23/20
Tuesday’s post revealed the effort by Molina Healthcare to convince the Kentucky Court of Appeals that Emily Parento, a Medicaid managed care consultant for the health care giant, was not subject to Kentucky’s Executive Branch Code of Ethics (EBCE).
Their argument flew in the face of a non-disclosure agreement (NDA) signed by Parento that included specific language stating she agreed to abide by the EBCE.
To the question we’ve posed twice: why does it matter if Parento was bound by the ethics code?
According to the recent appeals court decision, the EBCE prohibits individuals from accepting “employment, compensation, or other economic benefit from any person or business that contracts or does business with … the state in matters which he or she was directly involved during the last thirty-six months of his or her tenure.”
The court rejected an argument by Molina’s attorneys that Parento was only “a volunteer” on the Beshear-Coleman transition team, and therefore, neither an officer or public servant subject to the EBCE.
The court wrote, “We need not determine whether transition team members were considered ‘officers’ under EBCE…because Parento expressly agreed to be bound by its terms.” (p.28)
In their appeals court brief, a copy of which has been obtained by the Center for Open Government, Molina’s attorneys covered some other bases:
The uncontroverted evidence showed that Ms. Parento had no role in the 2019 RFP evaluations and no role in the 2020 RFP evaluations. Ms. Parento was not involved, much less “directly involved,” in any “matter” that would have prohibited her consulting work for Molina, and so she could not have violated the Ethics Code. (Italicized emphasis is Molina’s attorneys).
This brings us to the EBCE’s definition of “matter.”
Molina appears determined to limit it to the 2019 and 2020 RFP evaluations. However, the term’s definition was included in their own brief:
The applicable regulation…defines “matter” as “any measurable case, litigation, decision, grant, proceeding, application, determination, contract, claim, investigation, charge or legislative bill.”
Documents contained as appendices to the Molina brief shed new light on Parento’s actions while serving as co-chair of the CHFS transition team — and her work helping Molina prepare their response to the 2020 RFP.
According to an October 2020 order by the Franklin Circuit Court:
Ms. Parento was likely directly involved in matters related to the cancellation of the 2019 RFP. The transcript of her deposition shows Ms. Parento discussed the 2019 RFP while acting on Governor Beshear’s transition team. She discussed the original 2019 RFP with both Governor Beshear’s Executive Cabinet Secretary and his Chief of Staff. (Source)
Ms. Parento created an “Executive Summary” that summarized the transition team’s work for use by the incoming administration. CHFS apparently considers the Executive Summary to be confidential information, as the document is heavily redacted. However, those positions visible to the court mention the 2019 MCO contract.
Listed as “time sensitive or urgent matter” for consideration by the incoming Governor, Ms. Parento listed the decision whether to accept or to redo the 2019 RFP. And, at the end of the document Ms. Parento recommended stopping the implementation of the MCO contracts. (Source)
Ms. Parento…specifically tailored Molina’s RFP response based on work she performed for the transition team. She recommended that Molina include discussion of partnership-building with the Department of Behavioral Health, Development, and Intellectual Disabilities (DBHDID), and she had specifically recommended a stronger partnership with DBHDID in her Executive Summary for the Beshear Administration.
Her edits and revisions to Molina’s submission also included in-depth discussion of Pharmacy Benefit Managers, and emphasized that Kentucky’s opioid epidemic is a top priority for Governor Beshear; these again are topics specifically discussed in the Executive Summary she created for the Beshear administration.
These examples and others demonstrate a broad pattern of tailoring Molina’s submission in a manner that would maximize Molina’s chances of selection; while this is an appropriate course for a healthcare organization to take when trying to obtain an MCO contract, these actions in this particular case raise concerns regarding Ms. Parento’s level of knowledge and involvement while working on the transition team. (Source)
It is clear that (Parento) functioned in an official advisory capacity on matters directly relevant to the 2020 RFP, and thus was prohibited from working on matters they were directly involved in as officers for at least a year. The Executive Summary reveals that she was involved in discussions related to CHFS’s MCO contract-bidding process. Thus, Ms. Parento’s employment with Molina was violative of the Code of Ethics. (Source)
Was Parento “directly involved” with the MCO contract bidding process — or, more specifically, the decision by the Beshear administration to cancel the 2019 awards and rebid the contracts?
Two courts have asked this question and come to different conclusions.
At this point, it’s not clear whether this case will end up in front of the state Supreme Court (despite declarations from Deborah Yetter).
Molina’s brief identified Parento as “a distinguished expert and scholar who has devoted most of her career to Kentucky healthcare policy issues.”
While that may be true, we return to another of our outstanding questions: why did Molina wait to tap her considerable expertise only after she served on Andy Beshear’s transition team?