Former director of Iowa DHS suing Reynolds, alleging she fired him for not engaging ‘in illegal activity’

File - In this Aug. 1, 2019 file photo, ousted Iowa Department of Human Services director Jerry...
File - In this Aug. 1, 2019 file photo, ousted Iowa Department of Human Services director Jerry Foxhoven sits at a news conference in West Des Moines, Iowa. Foxhoven has filed a complaint, Thursday, Aug. 29, with the state seeking $2 million for wrongful discharge. (AP Photo/David Pitt, File)(David Pitt | AP)
Updated: Jun. 12, 2021 at 7:26 PM CDT
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DES MOINES, Iowa (KCCI) - Former director of the Iowa Department of Human Services (DHS) Jerry Foxhoven has filed a lawsuit against Governor Kim Reynolds.

According to court documents, Reynold’s deputy chief of staff Paige Thorson was providing assistance to Mike Randol, director of Iowa Medicaid Enterprise.

In 2019, Foxhoven and Reynolds executed a Memorandum of Understanding that required DHS to pay 69% of Thorson’s salary and combined benefits due to the assistance she was providing.

There were two Memorandum of Understandings signed, one for December 26, 2017, to June 30, 2018, and the second one for July 1, 2018, to June 30, 2019.

Court documents state that in February and March of 2019, Foxhoven and Reynolds’ Chief of Staff Sara Craig Gongol had conversations about Thorson’s role with DHS as the fiscal year came to a close.

Documents state Foxhoven, “told Gongol during their phone conversation that Thorson was no longer performing duties that furthered the mission of Iowa Medicaid and that he did not believe DHS could legally divert federal Medicaid dollars to pay her salary.”

Foxhoven went on believing that the issue had been resolved since legislators passed $200,000 in DHS funding for two new positions.

In June 2019, Foxhoven spoke with Gongol again to confirm that DHS would not be paying for a portion of Thorson’s salary with Medicaid funding. Gongol confirmed that she expected DHS to continue to pay for Thorson’s salary.

However, Foxhoven was concerned about the legality of DHS paying for Thorson’s salary with Medicaid funds since she was no longer performing duties related to the department.

In court documents, Foxhoven said he was going to reach out to the assistant attorney general’s office for legal advice, but was terminated before he could contact them.

The lawsuit claims Foxhoven was told he was being immediately terminated because “we’re going in a different direction.”

After he was terminated, the lawsuit states DHS refunded two salary payments made to Thorson in April and May of 2019.

“Defendants, and each of them, terminated Foxhoven because he refused to engage in illegal activity; that is committing Medicaid fraud and misuse of federal monies by continuing to pay Thorson’s salary despite the fact she was no longer providing any duties relating to Medicaid or otherwise furthering the mission of DHS all in violation of Iowa Code 8.38,” the lawsuit states.

Foxhoven is suing Reynolds, Gongol and the state of Iowa due to wrongful termination and is requesting compensation for his damages.

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