BOISE – A controversial no-bid contract with a former board member of Idaho’s state health insurance exchange has been canceled.
In addition, the exchange board voted Tuesday to forbid issuance of any contract for more than $15,000 without board approval.
Last week, the exchange announced a $375,000 contract with Frank Chan, head of Applied Computing, who had been the chairman of the state exchange’s technology committee; he resigned from the board the same day.
“I made the decision to contract with Applied Computing because they have the background and experience needed for this challenge,” Amy Dowd, exchange executive director, told the board. “The questions that have been raised indicate this decision should have been made in a different way. … I understand the scrutiny we are under. I appreciate the concerns that have been expressed this week. … I have learned from this process.”
Board Chairman Stephen Weeg said Chan “exercised his right to cancel the contract” after the public outcry.
Chan offered to work with the exchange during the 30-day cancellation clause, but the board declined.
Board members, however, lauded Chan for his expertise and the personal time he volunteered while on the board.
Establishing a state insurance exchange in Idaho was controversial; the state Senate’s majority caucus chairman, Russ Fulcher, announced Saturday that he’s considering a primary challenge to GOP Gov. Butch Otter because of concern over the move.
Board member Tom Shores said the contract award process was flawed. “There should have been some alarms going off,” he said. “All those things should have occurred and didn’t occur.”
The exchange had been operating under an interim procurement policy that left blanks for amounts of contracts that would trigger board review, empowering Dowd to make those decisions. That changed Tuesday with the new $15,000 limit.
“If an expenditure is to exceed that, that will be brought before the board to make a decision,” said board member Hyatt Erstad, who proposed the new limit. “It’s not designed to hamstring. It’s designed to allow us additional accountability.”
Exchange board member Kevin Settles expressed hope that the board might negotiate a new contract with Chan “in a better fashion.”
But board member and state Sen. Jim Rice, R-Caldwell, an attorney, said that was out of the question. “Negotiation of the contract prior to the resignation – Idahoans don’t see that as appropriate, we just don’t,” he said. “It’s part of being a fiduciary.”
Weeg said, “My hindsight says that in some ways our desire for expediency overcame … our desire for good governance. … It created a major mess for us, there’s no way to ignore that fact.”
Weeg said he bears some of the blame. “The governor appointed me to chair this board and the governor can decide if I still have his full faith and confidence, and I’ll need to talk to him about that,” he said. “We’ve been pressed by time from the get-go. We’ve probably taken some shortcuts that have caused us to stumble.”
Board members noted that Dowd, before signing the contract with Chan, sought advice from Weeg and others.
The board went behind closed doors for an hour and a half executive session to discuss personnel matters, then returned to open session and voted unanimously to request an independent review of the incident.
Weeg said, “We’ve operated under a crisis mode for five months, and it’s time to stop and take a breath.”
The board meeting also included some discussion of steps Idaho’s exchange can take immediately to let Idahoans sign up for health insurance despite glitches and delays in the federal enrollment system. Plans in the works include online calculators to give consumers an idea of what they’ll qualify for in subsidies even without enrolling, and direct links to insurers’ sites with details of plans and costs.
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