WASHINGTON, June 10, 2010 - As part of the Administration's continuing efforts to reform the Federal crop insurance program, reduce the Federal deficit, and maximize taxpayer dollars, USDA today released the final draft of a new crop insurance agreement and announced that $6 billion in savings has been created through this action. Two thirds of this savings will go toward paying down the federal deficit, and the remaining third will support high priority risk management and conservation programs. By containing program costs, these changes will also ensure the sustainability of the crop insurance program for America's farmers and ranchers for years to come.

USDA's Risk Management Agency (RMA), which administers the Federal crop insurance program, today released the final draft version of a new Standard Reinsurance Agreement (SRA), which details the new terms, roles, and responsibilities for both the USDA and insurance companies that participate in the Federal crop insurance program.

"The Federal crop insurance program is a critical component of the farm safety net, and now that our negotiations are complete, we have the framework for a stronger program that will help producers in every region of the country better manage their risk," said Agriculture Secretary Tom Vilsack. "The President has laid out an aggressive plan for reducing the deficit and we're pleased to take a leadership role in that effort with today's announcement while strengthening key risk management and conservation programs that benefit America's farmers and ranchers."

The release of the final draft agreement follows two draft proposals and months of discussions with insurance companies and other stakeholders. USDA has worked aggressively through the negotiation process to preserve the crop insurance program as part of the farm safety net, support producer access to critical risk management tools, protect the interests of taxpayers, and ensure a reasonable return for the companies that deliver the program.

The final draft agreement will generally maintain the current Administrative and Operating (A&O) subsidy structure, but remove the possibility of windfall government payments based on high commodity price spikes by limiting the level of A&O payments that the industry can receive. However, an inflation factor and consideration for new business is included so that the maximum payment may reasonably increase over the length of the agreement.

Through this negotiation process, RMA has lowered the projected average long-term return for the companies to about 14.5 percent. To do this, RMA worked closely with the insurance companies to modify the terms under which RMA provides reinsurance. Meanwhile, RMA will increase the return in historically underserved states to provide additional financial incentives for companies to write business in these states. The agency also returned to individual state stop loss protection for the more risky business, thus providing greater reinsurance protection for companies.

Through USDA's work during this negotiation process, the Administration is also ensuring that $2 billion in savings from the new Standard Reinsurance Agreement will be used to strengthen successful, targeted risk management and conservation programs and that $4 billion will be used to reduce the national deficit. The $2 billion that will be invested in Farm Bill programs include releasing approved risk management products, such as the expansion of the Pasture, Rangeland, and Forage program; providing a performance discount or refund, which will reduce the cost of crop insurance for certain producers; increasing Conservation Reserve Program (CRP) acreage to the maximum authorized level; investing in new and amended Conservation Reserve Enhancement Program initiatives; and investing in CRP monitoring.

The $4 billion in budget savings USDA achieved is one of the first and most significant steps that a federal agency has achieved in reducing mandatory spending from the long term federal deficit.

The 2008 Farm Bill authorized RMA to renegotiate the agreement effective for the 2011 crop year. Due to significant increases in commodity prices in recent years, annual insurance industry payments more than doubled from $1.8 billion in 2006 to an estimated $3.8 billion in 2009 based on the terms of the previous SRA. Meanwhile, the number of total policies decreased from 2000 to 2009.

In preparation for these negotiations, RMA contracted with an internationally known company, Milliman Inc., to review historical rates of return and determine a reasonable rate of return for the crop insurance industry. The Milliman analysis shows that over the past 21 years, the crop insurance companies averaged a 17.0 percent return when the average reasonable rate for that period was 12.7 percent. See the full report and additional information about the new SRA online at http://www.rma.usda.gov/news/2009/12/sra.html.

Since the renegotiation process launched, USDA has focused on six primary objectives for this agreement, which have been maintained throughout the negotiation process:

1) Maintain producer access to critical risk management tools;

2) Align A&O subsidy paid to insurance companies closer to actual delivery costs;

3) Provide a reasonable rate of return to insurance companies;

4) Protect producers from higher costs while equalizing reinsurance performance across states to more effectively reach under-served producers, commodities, and areas;

5) Simplify provisions to make the SRA more understandable and transparent; and

6) Enhance program integrity.

These objectives align with RMA's primary mission to help producers manage the significant risks associated with agriculture. By achieving these six objectives, the new SRA ensures financial stability for the program and the producers it serves, while increasing the availability and effectiveness of the program for more producers and making the program more transparent. Following today's delivery of the final draft to the companies, RMA will work with the companies to correct any technical errors or unclear language.

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By: Jane M. Orient, M.D.

http://www.aapsonline.org

All eyes are on the BP gusher in the Gulf, spewing pollution over the shoreline, but there's another big leak that will do even more damage to our economy: the one in the Medicare well.

Ever since 1965, when Medicare was enacted, the federal Treasury has been hemorrhaging dollars. Previously, "10%" was quoted and re-quoted as the amount of fraud. More recently, Senator Tom Coburn (R-OK) alleged it to be 20%.

Like BP's oil containment dome, previous efforts failed to plug the hole. Despite hundreds of millions of dollars shoveled into the Health Care Fraud and Abuse Control Program (HCFAC) by HIPAA (the Health Insurance Portability and Accountability Act), federal prosecutors say they need still more "resources" and "tools."

Attorney General Eric Holder is looking for people to prosecute for both leaks?which will do nothing to stop the pollution.

Containment efforts in new Medicare rules include requiring doctors to "revalidate" their billing privileges periodically. They'll have to show that their name, address, identifying numbers, and organizational status are exactly as registered. They'll have to give Medicare access to their checking account by electronic funds transfer (EFT) so that it can make immediate "adjustments" in case of overpayment.

The Patient Protections and Affordable Care Act ("ObamaCare") imposes additional screening requirements; some providers will have to be fingerprinted.

Ever-more aggressive private bounty hunters called Recovery Audit Contractors (RACs) are descending on doctors' offices, dissecting claims and patients' records, looking for a missing "bullet point" in the documentation, or an inaccurate digit in the billing code. ObamaCare increases the penalties for errors from $11,000 per item to $50,000. The government's burden of proof, already light, has been further decreased. There is no need to prove any intent to defraud, or even to show that any money was ever collected.

Also, the definition of "fraud" is expanded to include "unnecessary" services, "ineffective" services, or those that don't comply with Medicare requirements.

Prosecutors are making examples of "greedy providers." Dr. Ronald Poulin of Virginia was smeared all over the pages of his local newspaper before being convicted of "fraud"?that previously would have been called billing errors. Pictures of his home were posted on the internet?a nice house, bought with decades of hard work, now seized, along with his cars, his bank accounts, his medical license, his reputation, and his liberty. He sits in jail awaiting assignment to a federal prison.

One less oncologist will be prescribing expensive chemotherapy to cancer patients?and there are other effects that we don't see. Deterrence works. Trying to help sick people is becoming very dangerous.

But will these methods end the fraud? Dr. Kenneth Christman, a past president of the Association of American Physicians and Surgeons (AAPS) (www.aapsonline.org), states that the amount of fraud is actually 100%, because Medicare is a Ponzi scheme. Today's soon-to-be-retiring Baby Boomers have been bilked as surely as Bernie Madoff's investors were, and their "trust fund" is full of internal government IOUs that can be redeemed only by borrowing from a bigger sucker.

Leaving ultimate Medicare reform aside, can we eliminate true billing fraud? Eliminating doctors does eliminate billing?of all types, by those doctors. But organized crime is said to be moving in.

As Malcolm Sparrow pointed out in a book by that title, third-party payment is A License to Steal. Payment is made for a "clean claim," not for a messy service. And despite the government's legal advantages, it takes time to go through the process of destroying doctors. So here's the overnight solution.

Make insurance fraud, like credit-card fraud, self-revealing. Do away with "assignment of benefits," which means paying the "provider." Mail all insurance payments to patients, in the form of a dual-payee check.

Dead or fictitious patients don't cash checks. Real people who did not receive a worthwhile service generally do not pay for it.

Fire the RACs, and put prosecutors to work fighting real crime, not creating crimes from arcane codes.  Restore the natural regulatory system of customers reading understandable bills. Don't put medical dollars into a huge bank vault that criminals can open with computer codes, and the practice of medicine into a bureaucratic prison.

Prisons don't stop leaks.

http://www.aapsonline.org

WASHINGTON  - Tuesday, May 25, 2010 - Sen. Chuck Grassley of Iowa, ranking member of the Committee on Finance, with exclusive Senate jurisdiction over taxes, this week joined the committee chairman to introduce tax legislation that would create job opportunities for veterans returning home from military service and help businesses create jobs.  This is the latest in a series of Grassley actions to help veterans and active duty members of the military.

"These men and women are extremely capable," Grassley said.  "They have a lot of skills to offer in the workplace.  This legislation will clear some bureaucratic hurdles and add a financial incentive to encourage employers to seek out veterans.  These steps are a logical follow-up to my effort to increase the IRS' hiring of veterans.  The IRS saw the value of this pool of potential workers and followed through on increased hiring of veterans.  Other employers, including small businesses, should have similar opportunities."

The bipartisan Veterans Employment Transition Act will reward employers who hire qualified veterans who have recently completed their service in the military with up to a $4,800 tax credit for disabled veterans and up to a $2,400 tax credit for other qualifying veterans.  The bill eliminates the administrative burdens that make the current Work Opportunity Tax Credit provision directed toward unemployed veterans difficult for small businesses to use.  As a result, servicemen and women who have been recently discharged will be able to provide documentation from the Department of Defense without having to go through the tax credit's current certification process, which can be lengthy.   Any recently discharged veteran who has discharge paperwork showing 180 days of qualified active duty is eligible. This includes those men and women who were activated by their states as members of the National Guard.  The bill also requires the military to educate service members on how employers may qualify for the tax credit by hiring them.  The bill text is available here.

The introduction of this legislation follows earlier Grassley steps to increase veterans' hiring.  Beginning in 2008, Grassley succeeded in persuading the IRS to increase its hiring of veterans. At Grassley's urging, the agency hired more than 1,000 veterans in 2008, per a verbal commitment Grassley secured from the IRS commissioner, and hired an additional 700 veterans in the first five months of Fiscal Year 2009.  Grassley is seeking an update for the rest of Fiscal Year 2009.  Grassley initiated the effort after realizing that the Treasury Department, including the IRS, lagged behind other federal agencies in hiring newly returned veterans, even though the department had significant vacancies.

In 2008, Congress made permanent several provisions to provide tax relief for American troops and their families that Grassley helped to advance.  The Heroes Earnings Assistance and Relief Tax Act of 2008, the HEART Act, was a bipartisan effort that incorporated most of the provisions in the Defenders of Freedom Tax Relief Act of 2007, which Grassley co-sponsored and promoted.  The HEART Act also made permanent and expanded upon some of the tax relief measures that Grassley coauthored in 2003, while chairman of the Finance Committee.

"Military service makes taxes complicated and sometimes unfair," Grassley said.  "People shouldn't suffer a tax hit to serve our country.  Military men and women should have fair treatment under the tax code. It's a no-brainer."

Last year, Grassley welcomed the enactment of legislation he cosponsored to help members of the military benefit from the first-time homebuyer tax credit.  Before this correction, members of the military were penalized by the credit's structure.  The correction gave military personnel serving outside of the United States more time to qualify for the credit.   It also eliminated the repayment requirement for military personnel forced to sell as a result of official service.  The legislation also excluded from tax any payment to military personnel to compensate them for loss in home value resulting from base closure.

Apart from tax work, Grassley recently has worked to address the ongoing and growing backlog of veterans' claims at the Department of Veterans Affairs (VA).  He also cosponsored successful legislation that will ensure timely, sufficient and reliable funding for the VA health care system.  This legislation was supported by all major veterans' organizations as well as the chairman and ranking member of the Senate Veterans Affairs Committee.  Grassley also has worked to include several beneficial provisions in the Caregiver and Veterans Omnibus Health Services Act.  This new law corrects a number of deficiencies in how the U.S. cares for veterans with traumatic brain injuries, enhances VA support for family caregivers, and expands mental health services.  In 2009, Grassley received the American Legion's Distinguished Public Service Award for his work on issues important to veterans.

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WASHINGTON, D.C. - May 20, 2010 - Senator Tom Harkin (D-IA) tonight issued the following statement after the U.S. Senate passed the Restoring American Financial Stability Act of 2010 by a vote of 59 to 39.

"I voted for this measure because it is a step in the right direction. This bill will create a strong consumer financial protection bureau that will put a stop to a whole range of predatory financial practices targeting ordinary Americans.

"I am particularly pleased that language requiring commercial banks to spin off their derivatives operations remained in the bill in its original form as reported from the Senate Agriculture Committee. This is a very important part of the bill and I hope it remains in the conference-reported bill.

"I am disappointed, however, that other amendments in line with Chairman Lincoln's provision were not included. In particular, Senator Cantwell's proposal to reinstate the Glass-Steagall Act was not even considered. I was one of eight senators to vote against financial deregulation in 1999 that did away with Glass-Steagall. Reconsidering this issue had a place in this debate. Also, Senators Brown and Kaufman offered an amendment that would have dramatically reduced the size of the largest financial institutions. Unfortunately, the amendment was defeated.

"The problem in the financial sector, as with so many areas of our economy, is that the ground rules and oversight have been lax. Too many in the financial industry put profits ahead of people. As a direct consequence, tens of millions of ordinary Americans have lost their jobs, their homes, and, their livelihoods. This legislation will help restore some balance to our financial sector."