Maryland gets D grade in 2015 State Integrity Investigation

Introduction

November 13, 2015: This article has been updated.

Maryland’s health care insurance exchange was supposed to be a leading example of a successful, state-supported program to ensure every resident had access to health care. Maryland already had established an all-payer system setting uniform rates for medical procedures, so embracing universal health insurance as part of the Affordable Care Act, or “Obamacare,” was the logical next step.  And Gov. Martin O’Malley, a Democrat, soon to seek the presidency, was eager to get the program launched.

But the Maryland exchange stumbled badly almost the minute it opened for business in 2013, felled by technology, not medical science. A series of computer glitches paralyzed the system and took months to resolve. Some of the contracts for the failed 2013 rollout had been awarded without competitive bidding, a move allowed by changes approved in 2011 by the state Legislature with little fanfare.

That meant more than $1 million in contracts for the health care exchange could go ahead without customary review by the state’s Board of Public Works, composed of the governor, the independently elected state comptroller, and the state treasurer appointed by the Legislature. Comptroller Peter Franchot, a Democrat, was a lone voice on the board when he questioned the new contracting system for the health care exchange.

In addition, a state audit of Maryland’s health insurance exchange found that the state improperly billed the federal government $28.4 million during the troubled launch.  The audit report attributed the overbilling to a lack of state oversight and internal controls.

After the initial problems with the exchange, the Maryland Health Benefit Exchange Board of Trustees, which oversaw the process, extended contracts and awarded new ones in closed-door meetings that the Maryland Open Meetings Compliance Board later said were violations of state law.

Maryland’s disastrous health exchange rollout combined two elements — procurement problems and lack of transparency — that are among several recurring themes that led to the state earning a score of 64, or a D grade, ranking it tied for 22nd among the 50 states in the State Integrity Investigation, a data-driven assessment of state government accountability and transparency by the Center for Public Integrity and Global Integrity.

In the previous assessment in 2012, Maryland received a score of 61, a grade of D-, and ranked 40th out of 50 states. The two scores are not directly comparable, however, due to changes in questions and methodology, such as eliminating the category for redistricting, a process that generally occurs only once every 10 years. And while Maryland moved up in the state rankings this year, it was due to other states falling, not because of any significant improvements in such areas as government transparency and financial disclosure.

Maryland’s worst score this year was a 34, for access to public information, which placed it 41st. Its worst ranking, 49th, came with a score of 55 for internal auditing, partly because state agencies do not conduct real audits that go behind the data to examine supporting documents. While workers at many agencies don’t view auditing as part of their jobs, auditors with the legislative branch could use more help.

“To me, the most important thing is that over the course of the last three years or so, things have not gotten better,” said Todd Eberly, an associate professor of political science at St. Mary’s College in St. Mary’s City. He said Maryland’s stagnating position in the ratings “is not a good thing. We want to see more openness, we want to see accountability and we want to see transparency.”

Encouraging signs

There were some bright spots in the new report card. The state scored relatively well in managing lobbying oversight (7th place with a 74 score) and in creating a system of accountability for state judges (tied for 7th place with a 64).  In electoral oversight, the state came in tied for 9th with a score of 75.

The legislature did take some steps in 2015 to improve transparency, amending its public information act, which had undergone almost no revisions since enactment in 1970. The new law, effective Oct. 1, established a compliance review board and an ombudsman to mediate disputes. It also requires state agencies to designate a contact person for public information requests.

But there’s one problem: Republican Gov. Larry Hogan Jr. has yet to ask the legislature for money to fill the new positions. His office did not return repeated requests for comment.

Maryland Attorney General Brian Frosh, a Democrat, said the new law should help, at least a bit. “There is some possibility that the law, once implemented, will have a favorable impact, but it will not catapult us to the top,” he said.

Low tech

One reason the state’s overall score has remained stagnant is a lack of updated technology or an unwillingness to apply modern methods to the technology it has. Maryland, for instance, is the only state that still forces the public to travel to Annapolis, the state capital, to look up financial disclosure forms of officials and lawmakers, all of which remain paper records. And anyone whose forms are examined can ask the state ethics office about who is doing the looking.

With many parts of Maryland government struggling to get into the digital age, two areas — lobbying data, which is available online, and Maryland’s campaign finance database — offer relatively user-friendly systems.

But while the data is there, its reliability is uncertain. Reports are scanned only for completeness and are rarely formally audited or investigated. The Maryland state prosecutor, the state office that most often handles allegations of violations of campaign finance laws and lobbying regulations, reports that much of its work is complaint driven. The small staff rarely is in a position to initiate a campaign finance probe without prompting from other sources.

Mixed messages

The governor, who took office in January after campaigning on a platform that included greater transparency, has given mixed messages about just how open he will be. His chief legal counsel has urged agency heads and staff to mark internal correspondence, emails and documents as “confidential” and “protected by executive privilege.” A similar claim of privilege was made in 2013 when then-Lt. Gov. Anthony Brown, a Democrat running against Hogan for governor, fended off a request from The Baltimore Sun for his emails about the failed launch of the health care exchange program.

Meanwhile, Lt. Gov. Boyd Rutherford held a briefing with reporters in August, but refused to allow photos, videos or audio recordings.

All of which leaves unanswered the question of whether Maryland will become more transparent, a key to improving its good government ratings. Greater transparency usually leads to greater accountability, said Jennifer Bevan-Dangel, executive director of the advocacy group Common Cause Maryland. “We are making some progress,” she said. “But we aren’t making fundamental changes that give the public greater oversight.”

Update, November 13, 2015, 3:00 p.m.: This article has been updated to reflect a change in rank, due to a correction in one indicator in Maryland’s report card. The state is now tied for 22nd overall. It’s rounded score and grade have not changed.