Embattled MNsure Chief Abruptly Resigns Without Severance Package

Updated: 12/18/2013 10:08 AM KSTP.com By: Cassie Hart

The head of the Minnesota’s health care exchange has resigned amid controversy.

The news comes after the board in charge of Minnesota's health insurance exchange called a meeting on short notice in a closed session Tuesday.

April Todd-Malmlov, the former chief executive officer of MNsure, is under fire for taking a tropical vacation with the state Medicaid Director in November, while the state-run insurance exchange dealt with delays and glitches.

The board accepted the resignation of Todd-Malmlov at the emergency meeting Tuesday, according to a source. Todd-Malmlov, 36, was not made available for comment.

Todd-Malmlov is leaving without a severance package from the state. A MNsure spokeswoman says Todd-Malmlov, who was earning $136,680, had no severance package. It was not immediately clear if she was able to cash out remaining vacation or sick time.

The Board announced it has named assistant commissioner of Health Care Scott Leitz to the new position of Interim Chief Executive Officer while it conducts a national search for a permanent Chief Executive Officer.

MNsure Board Chair Brian Beutner explained the new role and expressed confidence in Leitz saying, “The Board believes the organization is at a stage where it needs a CEO to manage both MNsure’s current challenges and position it for greater success in the future. Scott has been a proven leader at the Department of Human Services where he has managed a large and complex organization effectively. We are fortunate to have someone with his capabilities and his intimate understanding of MNsure available to step in quickly and lead us through these critical next few months.”

Leitz said his first priority is to make it easier for individuals to enroll in coverage and have insurance beginning January 1. He also wants to move quickly to identify, solve, and communicate problems impacting customers; and increasing transparency.

“MNsure must do better. If there are problems or mistakes, we will acknowledge them and fix them,” said acting CEO Scott Leitz. “I look forward to working with MNsure’s talented team to make MNsure work for the people of Minnesota.”

MNsure Board Chair Beutner thanked Todd-Malmlov for her work in launching MNsure and acknowledged the efforts of the many employees at MNsure. Todd-Malmlov was earning an annual salary of $136,680. It wasn't immediately clear if her departure came with a severance package.

Back in October, Leitz was the center of an internal investigation by the Minnesota Department of Human Services. Several State employees blew the whistle on an agreement Leitz seemingly made mostly on his own, according to the DHS internal investigation. Read the full story here.

Leitz has denied several requests for interviews from KSTP. Leitz is expected to hold a press conference along with Beutner on Wednesday at 12:15 p.m. at MNsure’s office building in St. Paul.

On Sunday, KSTP reported about Todd-Malmlov’s two-week vacation to Costa Rica with Jim Golden, Minnesota’s Medicaid director.

MNsure said there's no conflict, but critics said it's yet another issue of compromised public trust.

Medicaid and MNsure are intimately intertwined, with billions of taxpayer dollars overlapping between the two programs.

One of the problems the website, MNsure.com, faced was being vulnerable to a Wi-Fi attack. Hackers can use a $99 device to intercept usernames and passwords. KSTP found the issue after putting a number of major websites through cybersecurity tests.

MNsure has experienced data breaches and user issues. MNsure has denied problems and blamed users who are not following sound security practices.

Republican lawmakers and Gov. Mark Dayton have expressed increasing frustration with issues plaguing the health care rollout, which is tied into the federal insurance overhaul.

 Governor Mark Dayton issued the following statement regarding the transition of leadership at MNsure:

“I commend the Members of the MNsure Board for their strong action to change immediately the executive staff leadership at Minnesota’s Health Insurance Exchange. I fully support their decision, and I have confidence in Scott Leitz’s abilities to lead MNsure as its Acting Chief Executive Officer.

“As I have said before – and have made emphatically clear to the MNsure Board – now is a critical time for Minnesotans, who are relying on this exchange to purchase good quality, yet affordable, health insurance. The recent problems some have experienced with MNsure are completely unacceptable. I am hopeful that this new leadership will lead to their swift resolution.”