Tag: CMS

How to Tell If the Government Has Taken over Health Care

From the Washington Post:

Hedge fund executives and other investors are increasingly interested in the timing and nature of health-policy decisions in Washington because they directly affect the profits and stock prices of pharmaceutical, insurance, hospital and managed-care companies…

[Former Centers for Medicare & Medicaid Services] director Thomas Scully, who served during the Bush administration…said he thought that it was useful for CMS officials to have more communication with Wall Street investors as a way for regulators to learn and “explain what an $800-billion-a-year agency” does with its money.

So long as someone is still making a buck, it’s not socialized medicine…right?

The Fraud Lobby

Evidently, there’s fraud in Medicaid.

The following are excerpts from an article in today’s Wall Street Journal. See if you can spot the fraud lobby:

In 2011, New York charged [Medicaid] a per-diem rate of $5,118 for residents of the [state-run] institutions, a network of 11 centers that now house about 1,300 people with severe developmental disabilities. Over the course of a year, Medicaid spends $1.9 million for every resident, or $2.5 billion in total—with half coming from the federal government. But the cost of running the institutions is only a quarter of that amount.

[A congressional] report said New York took advantage of a complex formula and kept federal officials in the dark for years…

The committee’s report said Gov. Andrew Cuomo’s administration refused to cooperate with the investigation. Joshua Vlasto, a spokesman for Mr. Cuomo, said the report’s conclusions were “wrong and totally misleading” and that a threatened “precipitous reduction” in funding would jeopardize administration efforts to modernize and restructure its Medicaid program…

But at a Thursday hearing, Penny Thompson, a CMS deputy director, suggested…, “You can expect to see a rate that’s about one-fifth of its current level” … without specifying a time frame. Such a reduction would reduce the annual federal reimbursement by about $1 billion, punching a hole in New York’s $54 billion Medicaid program…

The skewed methodology traces back more than 20 years, when New York got permission from the federal government to use a different formula for state-run developmental centers, assuring officials that the rates would hew close to costs.

But almost immediately, reimbursements began to skyrocket. The new methodology allowed New York to bill Medicaid for ghost patients: When a patient was discharged from a state-run facility, New York retained nearly two-thirds of the reimbursement amount. The formula also double-billed taxpayers: Many of those patients who left the centers moved into Medicaid-financed group homes.

Between 1990 and 2011, the daily reimbursement rate grew to $5,118 from $348. Ms. Thompson said it wasn’t clear if CMS “completely understood” the cost projections when it approved the rates. CMS officials acknowledge they first became aware of the problem in 2007 but waited three years before launching a probe.

In June 2010, the Poughkeepsie Journal ran a lengthy investigative piece about the rates. CMS started its investigation in response to the newspaper’s report, the committee said.

Lest you think I’m blaming Medicaid fraud on one political party, have a gander at my recent article, “Entitlement Bandits”:

Even conservatives fight anti-fraud measures, albeit in the name of preventing frivolous litigation, when they oppose expanding whistle-blower lawsuits, where private citizens who help the government win a case get to keep some of the penalty.

Protecting Medicare and Medicaid fraud is a bipartisan pastime.

How Dare Conservatives Stand athwart ObamaCare Yelling, Stop!

In a column for Kaiser Health News, Michael L. Millenson, President of Health Quality Advisors LLC, laments that conservatives in the U.S. House are approaching ObamaCare like, well, conservatives.  He cites comments by unnamed House GOP staffers at a recent conference:

The Innovation Center at the Centers for Medicare & Medicaid Services? “An innovation center at CMS is an oxymoron,” responded a  Republican aide…”Though it’s great for PhDs who come to Washington on the government tab.”

There was also no reason the government should pay for “so-called comparative effectiveness research,” another said.

“Everything’s on the chopping block,” said yet another.

No government-funded comparative-effectiveness research?  The horror!  For my money, those staffers (and whoever hired them) should get a medal.

Millenson thinks conservative Republicans have just become a bunch of cynics and longs for the days when Republicans would go along with the left-wing impulse to have the federal government micromanage health care:

After all, the McCain-Palin health policy platform in the 2008 presidential election called for coordinated care, greater use of health information technology and a focus on Medicare payment for value, not volume. Once-and-future Republican presidential candidates such as former governors Mike Huckabee (Ark.), Mitt Romney (Mass.) and Tim Pawlenty (Minn.), as well as ex-Speaker of the House Newt Gingrich, have long promoted disease prevention, a more innovative federal government and increased use of information technology. Indeed, federal health IT “meaningful use” requirements can even be seen as a direct consequence of Gingrich’s popularization of the phrase, “Paper kills.”

He even invokes the father of modern conservatism, William F. Buckley, as if Buckley would disapprove of conservatives standing athwart ObamaCare yelling, Stop!

Millenson’s tell comes toward the end of the column, when he writes:

traditional GOP conservatives… [have] eschewed ideas in favor of ideological declarations.

Eschewed ideas in favor of…ideas?  My guess is that what’s really troubling Millenson is that congressional Republicans are eschewing left-wing health care ideas in favor of freedom.

Better late than never.  Now if only GOP governors would do the same.

PAYGO, the CBO, and Repealing ObamaCare

One could argue that exempting ObamaCare from the PAYGO requirement is appropriate given the defects in current budget rules.

By law, the CBO must follow certain rules when doing cost estimates of legislation and projecting federal spending under current law. Under those rules, CBO projects ObamaCare will reduce the deficit. No question.

But Congress often defeats those budget rules by passing legislation with “pay fors” (i.e., spending cuts) that make the budget look better, yet are highly unlikely to be sustained because they are politically implausible. A good example of this is the “sustainable growth rate” formula, where Congress promises to ratchet down the government price controls that Medicare uses to pay physicians in future years. Congress has consistently reneged when those cuts come due. The pretense of future cuts that Congress writes into law makes 10-year budget projections/deficits look better than actual, unwritten policy would suggest.

This is a recognized problem. When the CBO believes that the law and actual policy are at variance, they actually do two types of cost projections: one based on the law as written and one based on the policy they think Congress is likely to adopt, based on past performance. They call the latter their “alternate fiscal scenario.”

ObamaCare opponents submit that this law is one of those instances where law and policy are at variance. So even though ObamaCare will reduce the deficit under existing budget rules, the spending cuts (actually, reductions in future spending growth) in the law were never going to take effect anyway. The CBO, CMS, and even the IMF have all discredited the idea that ObamaCare would reduce the deficit, because they all question the sustainability of ObamaCare’s spending “cuts.” Exempting ObamaCare repeal from PAYGO rules is appropriate if those rules have failed to protect taxpayers.

Is the Administration Cooking the Books on Govt’s Share of Health Spending?

Something smells fishy here.

Today, the federal agency that runs Medicare and Medicaid released its estimates of national health expenditures in 2009.  Interestingly, the U.S. Centers for Medicare & Medicaid Services re-categorized about 6 percent of national health expenditures – well over $100 billion – from “government” to “private,” at the very moment that the government share of NHE appeared set to hit 50 percent.

Last year, CMS projected that government health spending would “account for more than half of all U.S. health care spending by 2012.”  But it looks like we were set to reach (have reached?) that milestone much sooner.  See the below table, which I made using CMS’s estimates from 2008 and Exhibit 5 (p. 16) from today’s report.

Turns out, it was the private sector spending that $100 billion each year, not the government.  Who knew?

This 6-percentage-point drop in government’s share of health spending was apparently due to “the renaming of some service and payer categories.”  A footnote leads to a page on the CMS site that isn’t active yet, so we can’t see what was recategorized from government to private spending.

Exhibit 5 of today’s report also reveals that total health care spending grew by 4 percent in 2009, while government health spending grew by 9.9 percent and private spending shrank by 0.2 percent.  Indeed, today’s report contains this money quote:

Federal health spending increased 17.9 percent between 2008 and 2009 …. In contrast, the shares of spending of households… private businesses… and state and local governments… fell by roughly one percentage point each between 2008 and 2009.
And the feds are the guys who say they’re going to control health care costs!

I can’t say for sure that there’s something fishy going on here.  But this re-categorization comes at an awfully convenient time for an administration struggling with public dissatisfaction over its, ahem, government takeover of health care.  My spidey sense is tingling.

GAO: HHS Imposed an “Unusual” Prior Restraint on Speech during ObamaCare Debate

During the debate over ObamaCare, the Centers for Medicare & Medicaid Services took issue with some of the things that some of the insurers participating in the Medicare Advantage program were telling their enrollees about the legislation.  The Government Accountability Office has just released a review of CMS’s conduct in that episode:

Although CMS’s actions generally conformed to its policies and procedures, the September 21, 2009, memorandum instructing all MA organizations to discontinue communications on pending legislation while CMS conducted its investigation was unusual. Officials from the MA organizations and CMS regional offices that we interviewed told us they were unaware of CMS ever directing all MA organizations to immediately stop an activity before CMS had determined whether that activity violated federal laws, regulations, or MA program guidance. When asked about this directive, officials from CMS’s central office stated that, given the degree of potential harm to beneficiaries, the action was appropriate for the circumstances….

HHS expressed concern that our description of the September 21, 2009, memorandum as “unusual” makes it appear as though their suspension of all MA organizations’ communications on pending health reform legislation was inappropriate. It noted that directing an MA organization to immediately stop an activity while the agency determined whether violations had occurred was infrequent but not unprecedented…. We believe that the example provided—wherein CMS put its data collection activities on hold until the agency resolved concerns with interpretation of its own regulations—is not comparable to CMS instructing all MA organizations to stop sending information about health reform proposals to beneficiaries while it investigated potential violations. Moreover, our characterization of CMS’s action as unusual is based on discussions with MA organizations and CMS staff. They told us that they could not recall a previous example where CMS told all plans to stop an activity after a potential violation was discovered and prior to the completion of an agency investigation.

For the record, CMS lacked (and still lacks) a Senate-confirmed administrator.  It’s worth asking whether this prior restraint placed on speech critical of the administration came from Secretary of Health and Human Services Kathleen Sebelius, who is making quite a name for herself as an enemy of free speech.

Sebelius: Anonymous Political Speech ‘Dangerous’

In all of Washington, is there a greater enemy of free speech than Secretary of Health and Human Services Kathleen Sebelius?

  • Her department is forcing millions of Americans to finance speech that they oppose, by using taxpayer dollars to broadcast (misleading) television ads that promote ObamaCare.
  • She is using the powers granted her under ObamaCare to threaten insurers with bankruptcy if they publicly disagree with her about the law’s cost.
  • Now, she is decrying the growth of anonymous political speech in congressional campaigns.

Would that coerced speech, or government suppression of speech, troubled her as much as anonymous speech.