November 21, 2014

The Honorable Lori Swanson, Attorney General

1400 Bremer Tower
445 Minnesota Street
St. Paul, Minnesota 55101
via electronic delivery
Attorney General Swanson,
In recent weeks, significant concerns have been raised regarding the contract between the State of
Minnesota and Dr. Jonathan Gruber entered into in March 2011. In light of troubling remarks by Dr. Gruber
and MNsure, I believe that a review of Dr. Grubers work, and payments made to him, is necessary.
Minnesota Statutes provides that the Attorney General may recover payments made if services performed
or goods received under [a] contract are so unsatisfactory, incomplete, or inconsistent that payment would
involve unjust enrichment. Minn. Stat. 16C.05, Subd. 6. Setting aside ideological differences regarding
the Affordable Care Act, I urge you to use the power of your office to recover payment to Dr. Gruber for
work that even the State appears to believe is unsatisfactory.
As you may know, the State engaged Dr. Gruber through a single source contract to provide modeling and
analysis for the development of the State insurance exchange (n/k/a MNsure). The contract and subsequent
amendment specify that Dr. Gruber was to deliver an updated final report to the State by October 30, 2012.
However, that report was not delivered until late February 2013 after committee work on the exchange
legislation had been completed in the Minnesota House.
The contract is publicly available through MNsures website, but contains no indication of why the
deliverable date was not met or whether any payment was withheld for the lack of timeliness.
More troubling than the missed deadlines is MNsures current posture toward Dr. Grubers work. The
updated final report, written with Bela Gorman, provided the State with enrollment projections and other
analysis of the exchange through 2016. These projections were used to justify assertions that the exchange
would be financially stable and self-sufficient. Recently, in the face of lower-than-expected commercial
enrollment, MNsure informed the public that it has abandoned Dr. Grubers projections.

Through October, Dr. Grubers anticipated enrollment for this year have fallen up to 80 percent below
projections in the individual market, and over 95 percent short in the small group market. However, no
explanation has been provided for whether MNsure believes Dr. Grubers projections remain valid for
future enrollment years. Additionally, no indication of whether MNsure has updated or alternate projections
that demonstrate future financial viability, and there has been no sign that Dr. Grubers compensation was
withheld or diminished as a result of work product that MNsure now deems unusable.
Lastly, Dr. Grubers remarks regarding the benefits of operating without transparency call into question the
States decision to grant him access to potentially sensitive, non-public data. The contract required Dr.
Gruber to destroy all non-public data in his possession following the completion of his work. To date, no
confirmation of this has been made public.
Given the preceding concerns about Dr. Grubers relationship with the State, I request your guidance on
what options the State has for determining whether, in addition to missing critical deadlines, Dr. Gruber
violated the terms of his contract, and hope you will vigorously defend the interests of taxpayers against
those who seek to profit without providing performance.
Sincerely,

Representative Greg Davids

District 28B
cc (via electronic delivery): Mr. James Nobles, Legislative Auditor