Federal allegations that a high-ranking official in the Beshear administration misused the public employees health insurance plan to pocket $200,000 in kickbacks should spur an audit of the plan that covers 300,000 employees and their dependents.
The allegations also should spur questions about why Humana Inc., which was administering the plan, went along with paying a consulting firm $2 million.
The $1.8 billion self-funded plan — including the $2 million-plus that allegedly served as a source for kickbacks — comes from public employees and taxpayers. They deserve to know if more of their money is being misused.
An FBI agent’s affidavit says that former Personnel Cabinet Secretary Tim Longmeyer “abused his authority over the Kentucky Employees’ Health Plan to persuade Humana and Anthem to hire and pay (the unidentified firm) for consulting services that include focus group testing and telephone surveys.”
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Humana, which had a state contract to administer the plan, paid the firm $2 million. From that, the FBI alleges, Longmeyer received almost $200,000. Also, political contributions were made at Longmeyer’s direction by individuals associated with the consulting firm, according to the allegations.
Anthem Blue Cross Blue Shield, which also has administered the plan, allegedly paid the firm $48,000, of which Longmeyer is accused of receiving $22,500.
That someone at the top was allegedly willing to abuse the health plan and the public trust raises larger concerns about oversight that an audit should address.
U.S. Attorney Kerry B. Harvey said last week that investigators have uncovered no evidence of criminal culpability on the part of Humana or Anthem.
A spokesman for Humana said the company will conduct an internal investigation to confirm there was no wrongdoing.
The Louisville-based insurance giant should be alert to public corruption. A Humana vice president and lobbyist, George Atkins, was convicted in 1993 as part of the FBI’s Operation BOPTROT investigation of corruption in state government that produced charges against more than a dozen lawmakers. Two lawmakers admitted taking $10,000 each from Atkins to vote for an insurance deregulation bill.
Last year, an employee of the consulting firm blew the whistle on the alleged kickbacks by informing the FBI. The FBI did not identify the firm but The Courier-Journal reports that it is MC Squared of Lexington.
Howard Marshall, special agent in charge of the FBI in Kentucky, praised the informant. “One person stood up and they made a difference.”
How to build stronger safeguards into state officials’ dealings with contractors — including by encouraging and protecting whistleblowers in government and the private sector — is also worth pursuing.