Health Insurance

Medicare agency is probed for leaking stock news: Report

U.S. Department of Health and Human Services building, Washington, DC.
Saul Loeb | AFP | Getty Images

The Securities and Exchange Commission is reportedly conducting three investigations into whether leaks from the federal agency that runs the massive Medicare program led to stock moves on Wall Street in advance of regulatory actions by that agency.

The SEC has questioned almost a dozen officials with the Centers for Medicare and Medicaid Services as part of the insider-trading probes, one of which also involves the Federal Bureau of Investigation, The Wall Street Journal reported in a front-page story Wednesday.

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The newspaper reported that subpoenas have been served on stocks traders, government officials and research firms that specialize in Medicare policy.

Medicare, federal government's health-insurance for the elderly and disabled, is responsible for a significant share of overall U.S. health spending, with a $600 billion budget. CMS, which also operates the Obamacare program, is a division of the U.S. Health and Human Services Department.

US healthcare is the place to be: Pro
US healthcare is the place to be: Pro

The Journal's story begins with an anecdote recounting how on June 7, 2010, shares of the company Dendreon, plummeted 10 percent within hours of CMS officials beginning private discussions on whether to set limits on how much Medicare would pay for Dendreon's prostate cancer treatment Provenge.

Two of the SEC probes are related to Dendreon's continued stock drops in advance of a June 30, 2010, formal announcement by CMS that it was reviewing whether to continue reimbursing the full $93,000 cost-per-patient treatment for Provenge, the Journal reported.

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An ex-CMS official named David Blaszczak, known for making accurate predictions about Medicare payment rules, is the focus in one investigation, according to the Journal.

Blaszczak denied any wrongdoing to the paper.

The Journal said the third probe involving the FBI as well is eyeing whether CMS brass tipped off a policy research firm and a health-care lobbyist to still-private plans to increase funding for health-insurance firms.

The full story can be read here: Insider Probe Focuses on Medicare Agency.