Politics Alleged in Obamacare Grant

CHICAGO (CN) - A healthcare manager sued Uncle Sam, claiming its $780,000 grant to help uninsured people find coverage was yanked for political reasons, and given to a nonprofit with ties to the Democratic Party.

R&B Receivables Management dba R&B Solutions sued the U.S. Department of Health and Human Services on Tuesday in Federal Court.

R&B helps uninsured people find affordable healthcare. It was given a $104,000 Affordable Care Act Navigator Grant for 2013-2014 to help people in Wisconsin explore their healthcare options under Obamacare.

It won the grant even though it was in Chapter 11 reorganization at the time. The company claims it informed HHS of its bankruptcy status, and was told that as long as it was able to get the Navigator licensing, its bankruptcy should not affect its eligibility for the grant.

The next year R&B won a $780,000 grant to provide Navigator services in Illinois, Iowa, Indiana and North Carolina. Only $77,000 of the grant was to be used in North Carolina.

But within days of the announcement HHS withdrew the award, citing a "media firestorm" in North Carolina sparked by a News & Observer article about the grants.

The article quoted Adam Linker, a health policy analyst with the N.C. Justice Center, who said: "Whoever was reviewing the applications lost their mind temporarily. It's just ridiculous when we have a well-known nonprofit that's doing a great job with vulnerable populations in the mountains of North Carolina."

One week later, the Mountain Projects of Waynesville, in western North Carolina, was given a grant of $304,000 to provide the same services. Mountain Projects had received a $360,000 grant the previous year, but had been passed over for funding in 2014.

"On information and belief, R&B's grant award was pulled for political reasons, as all of the money that was awarded to other states was reallocated to North Carolina to a Democrat[ic] area during an election to a grant recipient with Democratic Party ties, who was previously passed over by the independent evaluators and who had been under congressional investigation during ACA Navigator Grant year 2013-2014 for its practices," the complaint states.

R&B seeks $780,000 in damages, plus litigation costs.

It is represented by Dennis A. Brebner in Waukegan, Ill.

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