BOISE, Idaho (AP) -- Idaho insurance exchange leaders Tuesday trimmed their executive director's power to sign lucrative deals after criticizing her decision last week to give a former board member a no-bid, $375,000 contract.
Your Health Idaho director Amy Dowd now must get the exchange board's permission for transactions over $15,000. Board members also severed ties with Frank Chan, the ex-board member who got the $180-per-hour taxpayer-funded contract to oversee a big exchange technology project without having to compete for it.
Additionally, they voted to hire a lawyer to investigate just how Chan's contract materialized.
Sen. Jim Rice, R-Caldwell and an exchange board member, said it was inappropriate for Chan to negotiate with Dowd before he quit the volunteer board Oct. 16 to accept the federally funded contracting position.
"The negotiation of contracts prior to the resignation — Idahoans don't see that as appropriate," Rice said. "You just don't. That's something that should have been recognized."
Chan's contract was to have been paid out of federal grants and nearly doubled the $95 hourly wage he has been paid by state agencies for separate computer work in 2012 and 2013.
Amid mounting complaints, Chan canceled the pact Monday. Though he offered to work with the exchange for the next 30 days under the contract's terms, board members declined and said they needed a fresh start.
At the conclusion of Tuesday's meeting, board members voted unanimously to hire a lawyer to investigate events that led to Chan's contract and offer recommendations about what can be done to prevent similar concerns from arising. A report is due by Oct. 30.
"What we're trying to do is get a clear understanding of events, and find out how to improve the governance and performance of the board," House Minority Leader John Rusche, D-Lewiston and an exchange board member.
Insurance exchanges, part of President Barack Obama's health care overhaul, are Internet marketplaces meant to connect uninsured people with federally subsidized health care coverage.
Dowd's decision to hire Chan — and the resulting criticism, from Rice and others — came at a difficult time: The Idaho marketplace has been plagued by the same problems as exchanges across the country since their national launch Oct. 1.
At Tuesday's special board meeting, Dowd conceded she had signed the deal with Chan's Boise-based company, Applied Computing, without adequately vetting the move with the board. She contends the decision was made hastily as she sought to maintain tight deadlines in selecting contractors who will build a state-based enrollment system to replace the glitch-plagued federal system.
"The questions that have been raised indicate that this decision should have been made in a different way," Dowd read from a short statement to the board. "I appreciate the concerns that have been expressed this week. I have learned from this process."
Exchange chairman Stephen Weeg said he deserved some of the blame — he talked the contract over with Dowd before it was signed. He acknowledged the sense of urgency to hire someone may have blinded him to the potential criticisms that proved the deal's undoing.
"Our desire for expediency overcame, at least in my case, the need for good governance," Weeg said. "It created a major mess for us. There's no way to ignore that."
Though Dowd has been a target, she also had her defenders Tuesday. Dr. John Livingston, an exchange board member, pointed out that Dowd had also broached Chan's hiring with Gov. C.L. "Butch" Otter's administration — and the exchange's private lawyers at the Boise firm Hawley Troxell.
"She was not a renegade," Livingston said.