Whistleblower Sues N.H. Insurance Regulators

By | June 20, 2011

A health policy analyst with the New Hampshire Insurance Department who was fired after challenging her bosses over a federal health care contract is now suing them under the state’s whistleblower statute.

Concord attorney Chuck Douglas told The Associated Press on Friday that he filed a lawsuit in Merrimack County Superior Court on Thursday against Insurance Commissioner Roger Sevigny and Deputy Commissioner Alexander Feldvebel on behalf of Leslie Ludtke.

Ludtke was fired May 31 after challenging her bosses over their push to change bidding procedures for a contract to design an insurance exchange under the federal Patient Protection and Affordable Care Act.

They said she was fired for refusing to work with them. Their office said they were out of town Friday and unavailable to comment on the lawsuit.

Douglas said Ludtke is seeking back pay, attorneys’ fees and other compensation for wrongful termination under the whistleblower statute as well as on civil rights and constitutional grounds.

The lawsuit claims her firing was due to a push by the department to satisfy the Republican Executive Council’s opposition to the federal health care law and Ludtke’s warnings the agency’s actions could be illegal.

Ludtke was the point person on developing a key federal health care reform contract that was put out to bid for presentation to the Executive Council last winter. The contract was to explore different options for lawmakers to consider in deciding whether to set up a state exchange or default to a federal exchange established by the federal government. The state received a $1 million federal grant to do the planning.

The exchanges are intended to promote competition among health insurance companies and give customers several plans to choose from.

After the November elections, Republicans captured the five council seats, which changed the political tone in the Statehouse against the health care reforms. House Republican leaders called on the council to reject anything to do with the federal act.

Wakely Consulting Group Inc. of Massachusetts won the bid for the contract, but the council had issues with Wakely, partly because not enough New Hampshire residents were employed to work on the project.

At an April 5 council meeting, some councilors said they were interested in a sole source contract, with one vendor completing the work.

According to the lawsuit, Ludtke raised concerns about the legality of handpicking a consultant to do the work and of including a provision about requiring New Hampshire residents to be part of any contract. Ludtke later learned that the attorney general’s office had advised the department that a sole source contract could not be issued and that a condition requiring work by New Hampshire residents would be invalid.

Ludtke claims her bosses accused her of being unwilling to work with them while she was still working to find a legal way to utilize the grant to plan for the exchange.

On May 3, she was received a letter that suspended her for two weeks and accused her of engaging in behavior “obstructing collaborative efforts to develop a plan consistent with the decision of governor and council,” the lawsuit states.

Ludtke responded with a letter addressing their concerns. After receiving the response, Sevigny added two additional weeks to the suspension. She was fired on May 31.

“Defendants Feldvebel and Sevigny discharged Ms. Ludtke because she in good faith raised concerns that she reasonably believed were violations of laws or rules adopted under the laws of New Hampshire, or the United States, namely introducing considerations into the selection of a vendor under a competitive bidding process that were illegal and improper,” the lawsuit states.

Douglas said Ludtke serves at the commissioner’s pleasure based on her good behavior.

“Good behavior is a well-known standard which is good cause,” he said.

The lawsuit argues that she was denied a hearing before her termination, which violates constitutional due process rights.

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