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Medicare chief sought to bring complaints against previous boss, as well

By Rachana Pradhan, Dan Diamond and Adam Cancryn

Medicare chief Seema Verma allegedly retained a lawyer to discuss a claim that President Donald Trump’s first Health and Human Services secretary, Tom Price, was creating a hostile work environment, according to an internal 2017 memo prepared by a HHS appointee.

A spokesperson for Verma denied that she hired a lawyer.

Verma’s alleged accusations about Price were outlined in an August 2017 memo based on an exit interview conducted with Brian Colas, who briefly served as Verma’s chief of staff that year.

“Mr. Colas said the administrator has ‘hostility and anger toward Secretary Price,’” stated the memo, which was obtained by POLITICO and details instances in which Verma was antagonistic toward Price and members of his staff.

The interview with Colas was conducted by Heather Flick, who at the time was an official in HHS’ Office of the General Counsel, according to three people with knowledge of the matter.

The document appears to shed light on Verma’s attitude toward her first boss at HHS. She is now engaged in a feud with Trump’s second HHS secretary, Alex Azar, including complaints of unwarranted interference and mistreatment of Verma and her team at the Centers for Medicare and Medicaid Services, which oversees $1 trillion in health benefits under Medicare, Medicaid and Obamacare.

A CMS spokesperson said Verma had no hostile feelings toward Price, who left his job in the fall of 2017, after a controversy involving his use of taxpayer funds for private air travel.

“The administrator and then-Secretary Price had a fine working relationship,” the spokesperson said. “These recent leaks are part of a targeted campaign to smear the Administrator and undermine the accomplishments of CMS.”

CMS also denied that Verma even considered hiring a lawyer as part of a hostile work environment claim against Trump’s first health secretary.

Colas released a statement saying the memo didn’t fully capture his views but did not respond to the specific claim that Verma hired a lawyer. “Parts of this are inaccurate,” Colas said in a statement to POLITICO. “This does not reflect my full experience working at CMS. I have respect for the administrator and the great CMS team.”

HHS declined to comment on the memo, including Flick’s preparation and whether she conducted the interview.

Flick did not respond to a request for comment. Efforts to reach Price were unsuccessful.

Verma never followed through on hiring a lawyer to address her workplace grievances in 2017, said one person familiar with the situation. However, multiple current and former officials said Price and Verma clashed on numerous occasions from the very start of their tenures atop the massive federal health department in early 2017, establishing a competitive dynamic that has only worsened under Azar, who has helmed the department for nearly two years.

Those tensions escalated markedly over the last few months, after Verma in an Oval Office meeting with Trump and senior White House officials criticized a major drug policy proposal Azar had long championed. The two also battled over personnel decisions and policy rollouts, such as a dispute over who would accompany Trump aboard Air Force One as he flew to Florida to make a highly touted Medicare announcement.

Trump and Vice President Mike Pence have personally intervened to quell the feud between the two senior appointees, holding multiple meetings with Azar and Verma as the acrimony between HHS and CMS has only escalated in recent weeks. Azar and Verma are also set to meet at the White House later this week with acting chief of staff Mick Mulvaney to address problems in their working relationship.

"There's a history of this," said a former Trump administration official of Verma’s complaints about HHS. "It goes back to Price. It goes back to the acting secretaries."

"Compared to what's happening now, that was a utopian existence," said another individual familiar with the situation.

Price and Verma — one a former Republican congressman from Georgia with allies in the House GOP conference, the other an Indiana-based health consultant who worked for then-Gov. Mike Pence — had virtually no relationship prior to Trump tapping them for senior roles inside his administration. The pair constantly jockeyed for credit during the GOP's efforts to craft legislation to repeal and replace Obamacare in the first year of Trump's presidency.

The Trump administration was under intense pressure in 2017 to work with Republican lawmakers to repeal the Affordable Care Act, a nearly decadelong promise that fell apart that summer.

"It was a multitude of issues," said one former HHS official close to Price, arguing that Verma was insubordinate, worked to circumvent department processes and battled with fellow officials over initiatives like Medicare open enrollment. “So much so that Tom Price considered firing her.”

“Anyone who knows Tom Price knows that this charge of a hostile work environment is absurd,” the official added, noting that more than a half-dozen women served as top advisers or key deputies to Price in his short stint as HHS secretary.

When Price resigned in September 2017, Verma was often mentioned as a potential successor as HHS secretary. But Trump nominated Azar for the role that November, and he was confirmed in January 2018.

Verma also raised gender discrimination concerns this August after HHS failed to promote one of her long-serving deputies, Brady Brookes, to be her chief of staff. HHS subsequently brought in a lawyer to investigate Verma’s claims but found no evidence of sex discrimination, Axios first reported. That outside investigation was also conducted by Flick, who at that point had left HHS. Verma’s allies have said Flick was not an appropriate choice to conduct the investigation because of her existing relationship with senior HHS officials. HHS declined to comment.

Flick “interviewed the relevant parties and they found no evidence that anyone in HHS leadership discriminated against her because of gender or otherwise created a hostile work environment inside HHS,” said an individual familiar with the investigation. HHS also had pushed Verma to consider hiring another woman, Kim Brandt, a top CMS deputy who also worked at HHS during the George W. Bush administration, for the role of chief of staff.

Verma's allies maintain that she never intended to make a formal gender discrimination complaint, and denied a request from Flick to interview her. Flick then closed her investigation without talking to any other CMS officials, according to a person familiar with the situation.

Brookes has since been promoted to chief of staff.

Joanne Kenen contributed to this report.