Jerry Foxhoven asserts in a new lawsuit that Governor Kim Reynolds and her senior staff forced him out as Iowa Department of Human Services director “because he refused to engage in illegal activity” and to prevent him from seeking legal advice about possible misuse of federal Medicaid funds.

The petition filed in Polk County District Court on June 9 closely tracks allegations Foxhoven made in a wrongful termination claim soon after he resigned under pressure in 2019. Reynolds, her chief of staff Sara Craig Gongol, and her former senior legal counsel Sam Langholz are named defendants in addition to the state of Iowa.

Foxhoven’s court filing says the events leading to his ouster centered on a dispute over payments from DHS for work done by Reynolds’ deputy chief of staff Paige Thorson. The DHS director agreed in early 2018 to have the agency pay 69 percent of Thorson’s salary and benefits, as she assisted Iowa’s new Medicaid director Mike Randol. Foxhoven signed a similar agreement for the next fiscal year, which ran through June 2019. (Several of the governor’s staffers are mostly paid by other state agencies; the longstanding practice helps Reynolds keep more staff on payroll than her budget appropriation could support.)

Foxhoven says that in February or March 2019, he told Craig Gongol in a telephone conversation “that Randol was now adequately familiar with Iowa’s health care network,” adding that “Thorson was no longer performing duties that furthered the mission of Iowa Medicaid and that he did not believe DHS could legally divert federal Medicaid dollars to pay her salary.”

In the spring of 2019, Republican lawmakers approved an extra $200,000 for the governor’s office, supposedly for health and tax policy analysts. Foxhoven says he “believed that the issue was resolved,” and spoke with Craig Gongol in early June “hoping to confirm that DHS would not continue paying any portion of the Thorson’s salary with Medicaid funds in the next fiscal year.”

However, the governor’s chief of staff indicated that she expected the agency to keep compensating Thorson. Foxhoven “questioned the legality of such an arrangement” and asked Craig Gongol to consult with legal counsel Langholz, but she refused.

According to Foxhoven, he told Craig Gongol “that he intended to ask the assistant attorney generals assigned to DHS for a legal opinion” on June 18, after the expected conclusion of a federal trial they were working on. But he wasn’t able to send that email, because Craig Gongol and Langholz asked for his resignation on June 17. Foxhoven says during that meeting, the governor’s senior staff “demanded the immediate return of all of Foxhoven’s state issued equipment and told him not to return to his office.”

The lawsuit alleges that the defendants terminated Foxhoven:

• “in order to prevent him from enforcing his statutory right to disclose information he reasonably and in good faith believed constituted a violation of the law, mismanagement, a gross abuse of funds or abuse of authority […]”;
• “in order to prevent him from disclosing information he reasonably and in good faith believed constituted a violation of the law, mismanagement, a gross abuse of funds or abuse of authority […]”;
• “because he refused to engage in illegal activity; that is committing Medicaid fraud and misuse of federal monies by continuing to pay Thorson’s salary despite the fact that she was no longer providing any duties relating to Medicaid or otherwise furthering the mission of DHS […]”; and
• interfered with and prevented him from consulting with the Iowa Attorney General’s office about his agency continuing to pay Thorson’s salary.

Foxhoven told journalists in 2019 he would not have objected to using Medicaid funds to support Thorson’s compensation if legal experts determined the practice was still allowable. But he wanted a letter from the Attorney General’s office. That way, in case state or federal auditors questioned the payments later, “There might be a difference of opinion between the auditor and the AG’s office, but it isn’t a matter of Foxhoven diverting funds.”

State agency directors are at-will employees, who serve at the pleasure of the governor. But one exception to the at-will doctrine is firing someone in violation of public policy–for instance, because they refuse to engage in illegal conduct. Foxhoven’s lawsuit alleges that his “termination violates well established public policy of the State of Iowa as defined by statute, regulation, and judicial decision.”

The court filing notes that Foxhoven has suffered “substantial loss of earnings, insurance benefits, retirement benefits and other employee benefits” as well as “emotional distress and damage to his reputation.” It also argues that he’s entitled to punitive damages against Reynolds, Craig Gongol, and Langholz, because their termination of his employment “was willful and wanton and done in reckless disregard of his rights.”

The governor’s office did not immediately respond to Bleeding Heartland’s request for comment on the lawsuit. The Iowa Attorney General’s Office had no comment. Langholz has worked there since late last year, representing the Reynolds administration in several high-profile cases.

Reynolds said in 2019 that “many factors” influenced her decision to ask for the DHS director’s resignation. (The agency has faced lawsuits and investigations over its management of the State Training School for Boys and the Glenwood Resource Center for the intellectually disabled.) In early 2020, the governor told reporters “she was ‘not happy’ with the response she received” about an increase in deaths at Glenwood.

Reynolds also claimed Foxhoven “never raised concerns with me or my staff about the salary agreements in question, and he never asked my staff for a legal opinion or said he would be reaching out to the Attorney General’s office for one.”

Final note: Records I received while investigating the governor’s office spending indicated that DHS did not end up paying any portion of Thorson’s salary during fiscal year 2020, which began in July 2019. However, DHS did pay 100 percent of the salary and benefits of the governor’s new health policy adviser Liz Matney from July 2019 through mid-March 2020. Thorson and Matney were among 21 permanent staffers in Reynolds’ office who had about 62 percent of their compensation from mid-March through June 2020 covered through federal COVID-19 relief funds.

Appendix: Petition filed in Polk County District Court on June 9

Governor Kim Reynolds has approved bonuses for at least five current state agency directors, allowing them to receive substantially more compensation than the top of the pay scale Iowa law sets for their positions.

The Iowa Department of Administrative Services disclosed information about four agency leaders now receiving such bonuses in response to Bleeding Heartland’s public records request. The Cedar Rapids Gazette’s Erin Jordan was first to report on Homeland Security and Emergency Management Director Paul Trombino’s bonus, in an article published April 7.

This post discusses each official’s bonus pay in the order that they were awarded. The governor’s spokesperson Pat Garrett did not respond to an April 7 email seeking to clarify whether any other heads of state departments are receiving greater compensation than the statutory maximum for their positions.

Jerry Foxhoven is an attorney, former law professor, and child advocate. He has spent his career celebrating diversity and inclusion and working to bring justice to Iowa’s most vulnerable citizens. -promoted by Laura Belin

Republicans claim a monopoly on being “pro-life,” based solely on each party’s stand on abortion. Being pro-life means more than controlling a woman’s options on abortion and family planning. Governing in a way that is pro-life does not stop at the time of birth, but continues throughout life. 

Pro-life means respecting all lives, regardless of age, religion, gender, income, race, ethnicity, sexual orientation, gender identity, physical or mental challenges, and even political beliefs. It means respecting the differences between all of us and recognizing that everyone is entitled to recognition of their inherent dignity and worth. 

When the term “pro-life” is given its full meaning, I am pro-life, and I am proud to belong to the party that encompasses the full meaning of that term: the Democratic Party.

Members of the Iowa House and Senate begin the work of the 2020 legislative session this morning. Speaking to journalists last week, GOP leaders described plans to work on a wide range of issues in the coming months, including workforce development, taxes, child care, and medical cannabis.

But top statehouse Republicans aren’t planning any oversight hearings on what’s been happening at the Glenwood Resource Center for Iowans with severe intellectual disabilities.

Before the new political year kicks off with the Iowa legislature convening and Governor Kim Reynolds laying out her agenda, I need to take care of some unfinished business from 2019.

When I reflect on my work at the end of each year, I like to take stock of not only the most popular posts published on this website and the ones I worked hardest on, but also the projects that brought me the most joy. I’ve found this exercise helps guide my editorial decisions on the many days when I have time to write up only one of several newsworthy stories.

Among the 348 posts I wrote last year, these were some of my favorites:

Five years ago, I started taking stock of my most labor-intensive posts near the end of each year. Not all of these are my favorite projects, though invariably, some of my favorites end up on these compilations.

Before getting to the countdown for 2019, I want to give another shout out to guest authors who poured an extraordinary amount of work into two posts Bleeding Heartland published last year.

Chasing traffic never has been and never will be my primary goal for Bleeding Heartland. If it were, I’d publish weekly posts about puppies or Casey’s pizza instead of Iowa wildflowers.

And anyone who has worked on an online news source can vouch for me: a writer’s favorite projects are often not the ones that get the most clicks.

Still, people do ask me from time what posts tend to do well, and I find it fun at year-end to recap the pieces that were particularly popular with readers. Since I started this exercise a few years ago, I’ve always uncovered some surprises.

Service cuts to Iowans with disabilities under privatized Medicaid prompted a 2017 lawsuit, became a central theme of the 2018 governor’s race, and were a featured problem in an annual report from the state ombudsman.

Yet in a meeting with advocates last week, Governor Kim Reynolds’ health policy adviser said she is unaware of major problems for patients trying to obtain essential services.

Former Iowa Department of Human Services Director Jerry Foxhoven has filed claims of “wrongful discharge in violation of public policy” against the state of Iowa as well as against Governor Kim Reynolds, the governor’s chief of staff Sara Craig Gongol, and the governor’s senior legal counsel Sam Langholz. I enclose below the documents Foxhoven’s attorney Thomas Duff submitted to the State Appeal Board on August 29. They are consistent with Foxhoven’s earlier remarks to the media about events preceding his resignation in June.

Former Iowa Department of Human Services director Jerry Foxhoven revealed more details about his wrongful termination claim on August 1. He asserts that he was fired after expressing concern about the DHS continuing to pay a large share of the salary for the governor’s deputy chief of staff, Paige Thorson.

As Bleeding Heartland reported last week, Thorson worked extensively on Medicaid-related issues for some time, but she became less involved with the DHS this spring, as Governor Kim Reynolds brought on a new health policy adviser.

Foxhoven and his attorney Tom Duff released a written statement and answered many follow-up questions during a 45-minute news conference. Radio Iowa posted the full audio. The questions and answers below are not a transcript from the conference, but rather my effort to put information about Foxhoven’s case in context for readers.

Jerry Foxhoven will pursue legal action claiming retaliation and wrongful termination as director of the Iowa Department of Human Services, Ryan Foley was first to report for the Associated Press on July 31. His attorney, Tom Duff, told the AP

that Foxhoven objected to a request to continue to have his agency fund most of the salary of the governor’s deputy chief of staff, Paige Thorson. Duff says that Foxhoven believed the arrangement made sense when he approved it in 2018. But he said that, by June, Foxhoven believed Thorson was no longer furthering the agency’s interests.

Duff plans to release a more detailed statement at an August 1 news conference, his office told Iowa reporters today.

As Bleeding Heartland discussed here, Thorson had handled health policy for the governor’s office since late 2017, but Governor Kim Reynolds brought Liz Matney over from the DHS this spring to be her health policy advisor.

Jerry Foxhoven has shed more light on the disagreement that preceded his forced departure as Iowa Department of Human Services director last month. On July 24 he told David Pitt of the Associated Press “that he declined to approve paying the salary of Elizabeth Matney, who left DHS on May 17 to accept a job as Gov. Kim Reynolds’ adviser on health policy.”

Staff for Reynolds disputed Foxhoven’s account, saying he never raised concerns about covering Matney’s salary and wasn’t fired for that reason. They also noted that for many years, state agencies including DHS have occasionally paid employees working in the governor’s office.

Foxhoven’s aware of that precedent, having signed some of the relevant documents himself. So why would he question the legality of this arrangement? The former director’s comments to reporters and records obtained by Bleeding Heartland provide some clues.

Editor’s note: Bleeding Heartland’s coverage of this story continues here and here.

Governor Kim Reynolds didn’t want the public to learn why she forced out Jerry Foxhoven as director of the Iowa Department of Human Services. The vague official narrative about Foxhoven’s unexpected departure remained intact for a month.

But the ground shifted last week. As further details emerge, the governor and her top staff will have more explaining to do.

Jerry Foxhoven has resigned as Iowa Department of Human Services director, effective today, Governor Kim Reynolds’ office announced on June 17. The news release did not give a reason for Foxhoven’s departure. Staff for DHS and the governor did not immediately respond to questions including:

John Morrissey is a longtime Des Moines resident who has investigated state spending increases, financial anomalies, and payment disruptions associated with Medicaid privatization in Iowa. -promoted by Laura Belin

The “he said/she said” controversy between an insurance company CEO and Iowa’s governor about why UnitedHealthcare decided to leave the state’s Medicaid program might make entertaining copy, but it doesn’t address who is going to manage the care of 420,000 Iowans left in the lurch.

Nor does it address whether the remaining company (Amerigroup) is adequately prepared to handle more members, and whether a new player poised to enter our state’s Medicaid market (Iowa Total Care) has the expertise to handle special populations in Iowa such as the elderly, disabled, and very ill.

It also doesn’t consider whether the state’s traditional fee-for-service Medicaid offering has the financial wherewithal to shoulder an even larger share of the enrollment and cost. Fee-for-service was held over from the old state-run program when most of the Medicaid program was privatized in 2016. The fee-for-service program pays the claims of Iowa’s sickest and most frail Medicaid members, which the for-profit managed care organizations (MCOs) don’t want or can’t handle.

The Iowa Deparment of Human Services (DHS) did not respond to a request for comment on these issues.

When a government press release arrives at 4:45 pm on a Friday, you know it’s not bearing good news. UnitedHealthcare will soon pull out of Iowa’s Medicaid program, the governor’s office announced on March 29. The company “manages health care for more than two-thirds of Iowans on Medicaid,” at least 425,000 people, Tony Leys reported for the Des Moines Register.

The official spin portrayed Governor Kim Reynolds as a hero who resisted a for-profit insurer’s “unreasonable” and “unacceptable” demands.

The real story is that nearly three years into our costly Medicaid privatization experiment, Iowa’s dominant managed-care organization (MCO) still can’t handle normal business practices like paying health care providers on time.

For weeks this fall, the Iowa Department of Human Services stonewalled a journalist’s request for easily accessible public records that would have cast an unflattering light on management of the state’s Medicaid program.

Three days after Governor Kim Reynolds won the election, the department sent a copy of one key document to Ryan Foley of the Associated Press. DHS released other relevant files on December 6, allowing Foley to confirm Director Jerry Foxhoven had cut a deal in April allowing UnityPoint Health affiliates to keep nearly $2.4 million they had been overpaid for services provided to Medicaid patients.

The settlement agreement came shortly after UnityPoint agreed to remain part of the network for Amerigroup, one of the private companies DHS picked to manage care for Medicaid recipients.

Leslie Carpenter is an advocate for improving the treatment of people with serious mental illnesses in Iowa and across the country. -promoted by desmoinesdem

While speaking at the National Alliance on Mental Illness Iowa Annual Conference on November 16, Iowa Department of Human Services Director Jerry Foxhoven advised the attendees that it was a good thing that two of the state’s four in-patient mental health institutions (MHIs) were closed, and that we have moved to community-based care. He further shared that it was a good thing to go from more than 700 beds to the current level of 64 beds for adults in the whole state.

We should recall that this reduction of state-operated acute care beds has caused Iowa to be ranked 51st by the Treatment Advocacy Center.

“It’s not certain to me that [my son] Matthew is safe with a Republican governor and a Republican legislature,” David Hudson told the Des Moines Register’s Tony Leys after Governor Kim Reynolds declined to reappoint him as co-chair of Iowa’s Medical Assistance Advisory Council. “And I say that as a lifelong Republican! Because I just don’t see the governor asking the right questions and doing the right thing for my son.”

By dumping Hudson and another council member who spoke out about problems related to Medicaid privatization, Reynolds has once again shown she is unwilling or unable to engage with facts on the ground related to Iowans’ health care.

John Morrissey is a native Iowan and longtime Des Moines resident. -promoted by desmoinesdem

Despite promises of huge annual cost savings resulting from Medicaid privatization, Iowa’s medical assistance programs spent more in eleven months of the current fiscal year than during all of the previous fiscal year.

Complaints to the Iowa Office of Ombudsman regarding privatized Medicaid increased by 157 percent last year, reflecting “systemic frustration” over cuts to health services for patients and unpaid bills for providers. Ombudsman Kristie Hirschman has “yet to be convinced” that the Department of Human Services is providing “adequate oversight” of the private insurance companies that control access to care and reimbursements, she wrote in a report released on April 2. The three outrageous examples she recounted resemble too many other tragic cases since Iowa shifted to a managed-care model for more than half a million Medicaid recipients.

Hirschman has assigned a full-time staffer to handle Medicaid-related complaints. The same issues come up again and again, more than a year after she, the state’s Long Term Care Ombudsman, and the advocacy group Disability Rights Iowa informed the DHS director about recurring problems with Medicaid managed-care organizations.

Although the ombudsman praised the legislature for “taking steps to correct some of the problems we and others have identified,” Senate Republican leaders haven’t brought up a Medicaid oversight bill that passed the Iowa House unanimously last month.

Iowa Department of Human Services Director Jerry Foxhoven “does not have enough votes to be confirmed,” Democratic State Senator Pam Jochum told Bleeding Heartland in a March 4 telephone interview. “He’s in trouble” largely due to concerns over the state’s handling of Medicaid privatization, she explained.

Who could have guessed that privatizing Medicaid would lead to for-profit companies cutting essential services to Iowans with disabilities? Aside from anyone who spent five minutes reading how the same approach had played out in Kansas?

When Iowa Democratic lawmakers sounded the alarm two and a half years ago, Governor Terry Branstad and his aides dismissed the warnings as “Washington D.C.-style partisan attacks.” They insisted privatization would allow Iowa patients to “enjoy the increased quality of service and care that comes with modern plans administering Medicaid.”

Instead, thousands received less in-home care or had trouble accessing medications and services after private insurance companies began managing their cases. The state now faces a class action lawsuit on behalf of 15,000 Iowans with disabilities.

Iowa Department of Human Services Director Jerry Foxhoven admitted yesterday what should have been obvious from the start: letting for-profit companies control access to health care for people with disabilities makes no sense.

The rumors were true: Drake University Law Professor Jerry Foxhoven will be the new Iowa Department of Human Services director, effective tomorrow.

The May 31 press release announcing Chuck Palmer’s retirement linked to a job listing for the DHS director position, to close on June 11. I would be surprised if Governor Kim Reynolds interviewed or seriously considered anyone else for this job, given the rapid turnaround. I never heard a rumor about any candidate other than Foxhoven.

I enclose below the full text of today’s announcement, including background on the new director. Foxhoven has a lot of relevant experience for the job, and I wish him the best of luck as he attempts to lead a department where big mid-year spending cuts will give way to even lower funding levels for the next fiscal year. Morale is reportedly poor among DHS workers, in part because of too-large caseloads. Medicaid privatization has proved disastrous for many vulnerable Iowans and service providers.

Speaking of which, Disability Rights Iowa filed suit yesterday against Reynolds and former DHS Director Palmer, seeking “to halt discriminatory cuts in services to 15,000 Iowans with serious disabilities,” Tony Leys and Jason Clayworth reported for the Des Moines Register. Roxanne Conlin is helping the plaintiffs, who will seek certification for a class action.

UPDATE: Lee Rood and Tony Leys interviewed Foxhoven for the Des Moines Register. I posted excerpts below, but you should click through to read the whole thing.

Iowa Department of Human Services Director Chuck Palmer is retiring effective June 16, Governor Kim Reynolds announced today. Critics including Democratic State Senator Matt McCoy have called on Palmer to resign for months, charging that inadequate staffing at DHS facilitated more suffering and premature deaths among abused children. The department’s handling of Medicaid privatization has also drawn criticism. Despite Palmer’s promises to hold the line, the DHS agreed to pay private insurance companies more for managing Medicaid. In addition, DHS officials have downplayed numerous, ongoing reports of those companies cutting back on health care services and failing to reimburse providers promptly or adequately.

In keeping with Governor Terry Branstad’s playbook when Teresa Wahlert ended her disastrous tenure at Iowa Workforce Development, Reynolds didn’t acknowledge any problems with Palmer’s management of the DHS today. On the contrary, she and acting Lieutenant Governor Adam Gregg praised Palmer’s work in the official press release, enclosed in full below.