The Perfect Enemy | Report revisits Tennessee deal with Nomi Health, which provided faulty COVID-19 tests
August 17, 2022

Report revisits Tennessee deal with Nomi Health, which provided faulty COVID-19 tests

Report revisits Tennessee deal with Nomi Health, which provided faulty COVID-19 tests  Tennessean

Read Time:5 Minute
  • Nomi Health, which provided faulty COVID test kits to Tennessee won no-bid deals in four states
  • A USA TODAY investigation found that the company was paid at least $219 million by four states
  • Tennessee taxpayers paid $5.9 million, despite faulty tests and medical equipment

Nomi Health, a Utah-based health care startup now the focus of a multi-state USA TODAY investigation examining its political connections, had only a brief relationship with Tennessee during the first months of the COVID-19 pandemic.

Its deal with the state soured within weeks after it became apparent the company’s tests were faulty and the medical equipment it provided was defective or designed for farm animals. Tennessee taxpayers still paid millions for their trouble.

It’s still unclear why state officials decided to go with a Utah company with no experience in medical testing.

Critics suggest it was a favor to politically well-connected health entrepreneurs. State officials insisted it was born of desperation — all states were looking to anyone who could deliver desperately needed test kits and protective gear in early 2020.

“We were turning over every rock to try to find any testing resources for our state, and that was one of them we tried, ” said Dr. Lisa Piercey, the state’s former Health Department commissioner who oversaw the deal. “Not everything you try works. And we were able to unwind all of that pretty quickly.”

Tennessee Department of Health Commissioner Lisa Piercey stands in her office where she has been leading the state's COVID-19 response in Nashville, Tenn., on Wednesday, April 28, 2021.

A new USA TODAY investigation has found that the company was able to secure no-bid contracts in Tennessee, Florida, Iowa and Utah through political connections, despite having no health care experience.

The company was paid at least $219 million from those states despite Tennessee finding Nomi’s tests to be faulty and that it provided useless medical equipment. 

Nomi executives told USA TODAY they don’t believe they did anything wrong and that they saved taxpayers millions.

USA TODAY investigation of Nomi Health:This Utah startup had no public health experience, but GOP governors paid it $219M for questionable COVID-19 tests

The $26.5 million no-bid contract in Tennessee was signed with Nomi in May 2020 despite objections from some department staff. As first reported by NewsChannel 5, a Republican political consultant had pitched the company to Gov. Bill Lee’s office and, shortly thereafter, Piercey had signed off on the deal.

The state withdrew from the contract after little more than a month, determining that the tests didn’t perform well and after receiving medical protective equipment that included things like veterinary wipes and arm-length gloves used in birthing livestock. 

Even so, the company walked away with $5.9 million of Tennessee taxpayer money for providing the protective equipment, technology and hardware setup, and a management fee, according to testimony provided during a bipartisan legislative investigation of the matter in December 2020.

Previous coverage:Bipartisan legislators grill health commissioner over contract for faulty COVID-19 testing supplies

Piercey questioned over Nomi deal:Bipartisan legislators grill health commissioner over contract for faulty COVID-19 testing supplies

One of the Tennessee Health Department’s career staffers who complained about the deal in 2020, Dr. Michelle Fiscus, was later fired.

Fiscus told The Tennessean last week that much of the protective gear the department received for those millions was unusable. She called the department’s decision to contract with Nomi a “dereliction of duty.”

“We received tens of thousands of bovine breeder gloves that were supposed to be used as gown sleeves in COVID testing drive-through sites,” Fiscus said. “We received KN95 masks that had visible holes in them that were obviously not safe for the people they were meant to protect.”

Fiscus, the department’s former medical director of the Vaccine-Preventable Diseases and Immunization Program, said she and others warned state officials that Nomi had zero experience with this kind of testing.

“This was a contract that was pushed through in a matter of days and written for $26 million with no vetting whatsoever,” she said.

Fiscus fired:As COVID-19 raged, to whom did Tennessee turn for help? Michelle Fiscus.

Fiscus termination timeline:The Michelle Fiscus story is a confusing mess. This timeline will help.

Fiscus was fired in July 2021, amid a summer COVID-19 surge. She later filed a lawsuit against the department and Piercey, alleging that her termination damaged her professional reputation. 

Piercey, who recently spoke to The Tennessean, declined to comment about Fiscus’ termination and her characterization of internal complaints about Nomi, citing the ongoing legal case.

As for why the state still provided the company $6 million, despite its unusable tests and equipment, Piercey said it was a “contract issue.”

Gov. Bill Lee’s office also declined to comment at length about the Nomi contract but, like Piercey, said that it was competing with other states for scarce protective equipment and testing kits at the time. 

“Our state was one of the first to build a robust approach to testing and followed all state of emergency procurement laws to work with many vendors to accomplish widely available COVID-19 testing,” said Lee’s press secretary, Casey Black. “All work with Nomi was executed consistent with Tennessee laws governing emergency procurement.”

The division of state government that oversees contract regulations, the Department of General Services, had “relaxed” its procurement rules because of the declared pandemic emergency, said spokeswoman Michelle Brinson.

Since that time, the general services office requires no-bid contracts authorized as emergency purchases must be approved by the Central Procurement Office and reported to the Fiscal Review Committee of the legislature, Brinson said.

The state of Tennessee currently has no other contracts with Nomi Health, according to General Services.

Frank Gluck is the health care reporter for The Tennessean. He can be reached at fgluck@tennessean.com. Follow him on Twitter at @FrankGluck.

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