Fraud investigators with the state auditor’s office are investigating the City of Toledo’s dealings with FrontPath Health Coalition, a Perrysburg-based medical network that was recently ordered to pay damages for undercutting the bidding processes for multiple government health-care contracts with the aid of government officials.
According to court documents, State Auditor Keith Faber has subpoenaed attorney records from Medical Mutual, a Cleveland-based insurer, in connection with an open investigation into the city of Toledo.
Specifically, the state asked that Medical Mutual’s attorney Richard Knoth provide all documentation pertaining to the city of Toledo’s relationship with FrontPath, including copies of contracts between the parties stretching back to 2003.
Mr. Knoth was also asked to turn over minutes from “any and all meetings by the City of Toledo Healthcare Cost Containment Committee in which contracts, RFP’s [requests for proposal], RFP responses involving FrontPath Health Coalition were discussed or voted on from January 1, 2015 to the present.”
Over four weeks, Mr. Knoth argued before Lucas County Judge Michael Goulding that FrontPath unlawfully used Medical Mutual’s pricing information in order to alter their bids to the city of Toledo. Mr. Knoth said they did this with the help of several government officials who doubled as members of FrontPath’s board and the city’s cost containment committee.
A jury agreed with Medical Mutual on Oct. 1, awarding $1.7 million in damages for contracts signed with FrontPath in 2015 and 2018. Those contracts concern the health insurance of thousands of public employees.
Todd Clark, a fraud investigator with the state auditor’s office, also specifically requested any documentation concerning FrontPath and Don Czerniak, a former FrontPath board member who sat on Toledo’s cost containment committee and is still employed by the city.
Mr. Knoth previously told The Blade that Mr. Czerniak confessed to providing pricing information to FrontPath during trial testimony, the transcripts for which the state also requested.
In an email presented as evidence during the Lucas County civil trial, FrontPath’s former president and chief executive officer Susan Szymanski attached a copy of Medical Mutual’s 2015 cost comparison data.
“My board member, Don Czerniak, gave it to me confidentially,” Ms. Szymanski wrote of the data. Mr. Czerniak is the president of AFSCME Local 7, the city’s largest union.
In their subpoena to Mr. Knoth, the state also requests any and all records in his possession pertaining to Calvin Brown, the former human resources manager for the city of Toledo. Mr. Brown is another former FrontPath board member who allegedly helped the network secure government health-care contracts by leveraging his position as a city employee.
Gretchen DeBacker, spokesman for the city of Toledo, said Monday that the city was “not a party to the lawsuit between FrontPath and Medical Mutual” and is “not a party to the investigation at the State Auditor’s Office.”
“The City of Toledo is not being investigated related to this civil lawsuit,” Ms. DeBacker said, adding that Mr. Czerniak’s role in the FrontPath lawsuit “was not related to his role as a City of Toledo employee ... It was based on his role as head of the Union he represents.”
In addition to the city of Toledo, Medical Mutual successfully argued during their civil trial against FrontPath that they had been cheated out of contracts with Wood County.
On Monday, the state auditor’s office issued another subpoena, this time looking for employee health-care contracts between Wood County and FrontPath stretching back to 2003, as well as any minutes from meetings by the Wood County commissioners or any other Wood County body where the contracts were discussed. Fraud investigators also asked for any documentation of correspondence between the medical network and Pamela Boyer, the county’s human resource manager and another former member of FrontPath’s board.
County administrator Andrew Kalmar said Wood County has received no communication from the state auditor’s office pertaining to this matter.
Both of the state’s subpoenas request that Mr. Knoth provide a comprehensive list of all of FrontPath’s employees or agents who were connected to efforts to secure contracts with the City of Toledo or Wood County. Ms. DeBacker said Monday that she was unaware of any Toledo employee besides Mr. Brown and Mr. Czerniak who serves or has served on FrontPath’s board.
FrontPath has denied The Blade’s requests to provide a full list of their current and former board members, but the network’s current president and chief executive officer Patricia Beham previously stated that no one currently seated on their board is an active public official.
The state auditor’s office did not return The Blade’s request for comment.
First Published November 8, 2021, 8:30 p.m.
