Sen. Chuck Grassley of Iowa today released details of a timeline on a key Medicare policy decision earlier this month that reportedly moved stock prices when correctly described  by an outside firm prior to public release.  Grassley received information about the timeline from Marilyn Tavenner, acting administrator of the Centers for Medicare and Medicaid Services, in response to his inquiry.  Grassley's office has calculated that the Medicare Advantage policy decision was worth about $8 billion to the health care companies participating in Medicare Advantage.  He made the following comment on the new timeline details and the nomination of Tavenner to serve as permanent administrator.

"This timeline suggests CMS knew it was going to assume a sustainable growth rate fix in the Medicare Advantage rates on March 15.  I don't think anyone who understands the background believes CMS made the decision on its own or that the first time it was known outside of CMS was May 22.  This was a decision not only with a high price tag, but also with political implications for the White House.  A policy decision benefiting the big insurance companies by $8 billion is not a routine undertaking for this Administration.  Given the high probability that the White House, National Economic Council, and Domestic Policy Council were involved in the $8 billion decision before March 15, a significant number of people likely knew what the outcome would be long before the decision was announced.  It seems unlikely that none of them hinted at it to anyone else for more than two weeks.  That's especially true with the efforts from lobbyists and at least one political intelligence firm to get early insight into the decision.  Acting Administrator Tavenner has been responsive to my inquiries on this issue, in a letter last Friday and on a phone call this morning.  I intend to support her nomination and continue to work with her to get to the bottom of what led to the early release of information about the Medicare Advantage decision."

Grassley's April 4 letter to Tavenner is available here.  Tavenner's April 19 response to Grassley is available here.

Sen. Chuck Grassley of Iowa today made the following comment on the Securities and Exchange Commission's announcement that Acting Director George Canellos and former federal prosecutor Andrew Ceresney have been named co-directors of the Division of Enforcement.  Media reports have described Ceresney as the "longtime lieutenant" of new SEC chairman Mary Jo White as a corporate defense lawyer at the law firm Debevoise & Plimpton.

Thursday, April 18, 2013

Grassley, Cassidy Seek Answers from Georgia Hospital on Discount Drug Program

WASHINGTON - Sen. Chuck Grassley of Iowa and Rep. Bill Cassidy of Louisiana today asked a Georgia hospital for details of its use of a federal discount prescription drug program, known as 340B.  They wrote to the Columbus Regional Healthcare System after a hospital executive said during a public interview that the hospital does not receive a "windfall of profits" from participating in the program and puts the proceeds into the hospital.

"When I looked at three North Carolina hospitals' use of this program, the numbers showed the hospitals were reaping sizeable 340B discounts on drugs and then upselling them to fully insured patients to maximize their spread," Grassley said.  "If 'non-profit' hospitals are essentially profiting from the 340B program without passing those savings to their patients, then the 340B program is not functioning as intended.  Our inquiry into the Georgia hospital will help us continue to examine hospitals' use of the 340B program."

Cassidy said, "As a physician who has spent 20 years caring for the uninsured, I recognize the value and importance of the 340B drug discount program. Given this importance, we must be sure that its good work is not threatened by those who misuse. Our common goal must be better care for those who are less fortunate."

The 340B program requires drug manufacturers to give deep discounts on certain outpatient drugs to hospitals that serve large numbers of uninsured and under-insured patients.  Grassley and Cassidy are among the members of Congress who are concerned that hospitals increasingly appear to be making sizeable profits from the program at the expense of Medicare, Medicaid and private health insurance.  The federal Health Resources and Services Administration (HRSA) conducted poor oversight of the program for a long period but is beginning to exert more scrutiny under pressure from Congress.

The Grassley-Cassidy letter to Columbus Regional Healthcare System is available here.

A Grassley letter to HRSA earlier this month citing the three N.C. hospitals is available here.

Grassley works to stop federal interference and restore state-level education decisions

WASHINGTON - Senator Chuck Grassley is leading an effort to ask leading Senate appropriators to restore state-level decision making about academic content in public schools in response to the way federal incentives have interfered and put a heavy hand on states to adopt the Common Core State Standards Initiative.

Grassley said the Common Core program was initially billed as a voluntary effort, and that current federal law makes clear that the U.S. Department of Education may not be involved in setting specific content standards or determining the content of state assessments.

"The reality is that the U.S. Department of Education has made adoption of standards matching those in Common Core a requirement for getting waivers and funds," Grassley said.  "This violates the structure of our education system, where academic content decisions are made at the state level giving parents a direct line of accountability to those making the decisions.  The federal government should not be allowed to coerce state education decision makers."

Grassley is inviting senators to join him in a letter to the Chairman and Ranking Member of the Senate Appropriations Subcommittee that funds education.  The letter urges appropriators to set clear restrictions on the U.S. Department of Education from setting academic content standards either directly or indirectly when they put together legislation to fund the U.S. Department of Education for the next fiscal year.

Here is the text of the letter that Grassley is inviting senators to sign by April 25.

April 26, 2013

The Honorable Tom Harkin

Chairman, Subcommittee on Labor, Health and Human Services, and Education

Senate Appropriations Committee

The Honorable Jerry Moran

Ranking Member, Subcommittee on Labor, Health and Human Services, and Education

Senate Appropriations Committee

Dear Chairman Harkin and Ranking Member Moran:

We ask that the Fiscal Year 2014 Labor, Health and Human Services, and Education Appropriations Bill include language to restore state decision-making and accountability with respect to state academic content standards. The decision about what students should be taught and when it should be taught has enormous consequences for our children. Therefore, parents ought to have a straight line of accountability to those who are making such decisions. State legislatures, which are directly accountable to the citizens of their states, are the appropriate place for those decisions to be made, free from any pressure from the U.S. Department of Education.

While the Common Core State Standards Initiative was initially billed as a voluntary effort between states, federal incentives have clouded the picture. Current federal law makes clear that the U.S. Department of Education may not be involved in setting specific content standards or determining the content of state assessments. Nevertheless, the selection criteria designed by the U.S. Department of Education for the Race to the Top Program provided that for a state to have any chance to compete for funding, it must commit to adopting a "common set of K-12 standards" matching the description of the Common Core. The U.S. Department of Education also made adoption of "college- and career-ready standards" meeting the description of the Common Core a condition to receive a state waiver under the Elementary and Secondary Education Act. Race to the Top funds were also used to fund two consortiums to develop assessments aligned to the Common Core and the Department is now in the process of evaluating these assessments.

We ask that you eliminate further interference by the U.S. Department of Education with respect to state decisions on academic content standards by including the following language in the Fiscal Year 2014 Labor, Health and Human Services, and Education Appropriations Bill:

Sec. __. (a) Funds appropriated under this Act or any prior Act shall not be used by the Secretary of Education–

(1) to directly develop, implement, or evaluate multi-State or other specified standards (defined in this section as any set of academic content standards common to multiple States, including the Common Core State Standards developed by the National Governors Association Center for Best Practices and the Council of Chief State School Officers, or any other specified set or type of academic content standards selected by the Secretary) or assessments aligned with such standards;

(2) to award any grant, contract, or cooperative agreement that requires or specifically authorizes the development, implementation, or evaluation of multi-State or other specified standards, or assessments aligned with such standards;

(3) to condition any award of funds to a State on the adoption of multi-State or other specified standards, or to include, as a component of an application for Federal funds, a requirement or preference related to multi-State or other specified standards; or

(4) to enforce any provision of a waiver issued by such Secretary under section 9401 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7861) related to the adoption of multi-State or other specified standards.

(b) Nothing in subsection (a) shall be construed to limit the discretion of an individual State to use funds provided through a grant, contract, or cooperative agreement for any uses that are authorized under the grant, contract, or cooperative agreement, if the State so chooses.

Thank you for your consideration of our request.

Sincerely,