Judge backs ex-Insurance Department employee in unfair termination suit

Ruling rejects state’s bid to dismiss a suit filed by the state’s former top health policy analyst

New Hampshire Insurance Commissioner Roger Sevigny – up for a renomination vote Wednesday – is facing a potentially messy trial over an alleged politically charged wrongful termination, thanks to a Merrimack County Superior Court ruling last week.

“There are a lot of other things I need to be thinking about,” Sevigny told NHBR, “but frankly it’s nothing I personally have any control over.”

Judge Larry Smukler issued the ruling last week against the state’s motion to dismiss a two-year-old lawsuit filed by Leslie Ludtke, the state’s former top health policy analyst. Ludtke claimed that Sevigny fired her after she insisted it was illegal for the department to award a no-bid consulting contract in the state’s attempts to set up a health exchange under Obamacare.

But Sevigny contends that he had the legal right to dismiss an at-will employee who was obstructing the commissioner’s policy, which was for the state to look into having its own exchange.

Smukler ruled that the state didn’t have a strong enough case based on the law alone, and it should be up to a jury to sort out the facts.

“The state has been hoping not to have to go to trial,” said Chuck Douglas, Ludtke’s attorney. “Instead, they are going to spend two weeks talking about health care and politics. It couldn’t be a better time for the public interested in these matters.”

It also couldn’t be a worse time for Sevigny – on the eve of the Executive Council’s vote on whether he should serve another term, smack in the middle of implementation of the Affordable Care Act, known to both proponents and opponents as Obamacare.

“I don’t think it will make a difference,” Sevigny said of the Smukler ruling coming just days before his renomination vote. He compared “one employee who I had to terminate, that I had to fire, and is bitter and brought a lawsuit with the 11 who uniformly testified in my favor at a public hearing. No one testified against me, not even the plaintiff.”

Ludtke declined comment, and Douglas said he would not comment on the Executive Council vote, only saying, “I would hope that they go into the vote with their eyes wide open. I assume they have done their due diligence, and I assume they know the state is on the hook for money damages.”

Some sources said that there might be a motion to table the nomination, but Executive Councilor Christopher C. Pappas – the only one reached by NHBR at deadline – said he has heard of no such move, and plans on backing Sevigny. Pappas said he is aware of the lawsuit, but everything he has heard about Sevigny is positive, and “at this point we have to have continuity. It’s not the time to change insurance commissioners.”

In the spring of 2011, Ludtke was the point woman on a key contract to study whether the state should form its own health care exchange – at the time, it still had a chance to do so.

The Insurance Department recommended that the Executive Council put out a request for proposal and recommended that the contract be awarded to Wakely Consulting Group Inc., a Massachusetts firm. But the then all-Republican Executive Council – hostile to Obamacare – rejected the bid, partly because there were not enough New Hampshire residents employed on the project and partly because John Kingsdale, the point person for the company, had been executive director of the Health Insurance Connector Authority, Massachusetts’s state-based health insurance exchange.

After the rejection of the Wakely contract, Ludtke was said she was then directed to work on a no-bid contract with Leavitt Consulting, headed by the Mike Leavitt, the former Republican governor of Utah.

“Based on my research, I quickly concluded that Leavitt Consulting did not have the capability, particularly with respect to data analysis, to meet the specifications of the existing planning bid proposal. They were well connected because Mr. Leavitt had been Secretary of HHS for President George H.W. Bush,” Ludtke wrote in her latest affidavit.

Ludtke also said Sevigny and Deputy Insurance Commissioner Alex Feldvebel wanted her to change contractors to provide councilors with “political cover” to approve the contract without appearing to be moving forward on Obamacare, but that would be violation of the state law concerning competitive bidding, she said.

Feldvebel, Ludtke said, then “pointed his finger directly in my face and stated that he considered my response to be a ‘refusal to do the work.’” Sevigny, she said, “told me repeatedly that … I was to take direction from him and act totally at his direction.”

Ludtke contended she then was frozen out of the decision-making process, and later fired.

Sevigny said that he would not respond to specific accusations, “because I don’t want to litigate this matter in the press. I will say my piece when appropriate.”

In the motion to dismiss the lawsuit, Senior Assistant Attorney General Nancy Smith said that Ludtke had been reprimanded as far back as 2007 for “using her position to advocate her own options rather than the policy of the Commissioner” and at times was “pursuing her own agenda”

Ludtke denies that she was pursuing her own agenda. Instead, she said she tried to forge a legal way out — go for an entirely different federal contract. The department rejected that option at the time, though it was the one it eventually followed, she said.