Obama administration decides to exempt Obamacare from fraud prevention rules

From the radically left-wing New York Times, of all places.

Excerpt:

The Affordable Care Act is the biggest new health care program in decades, but the Obama administration has ruled that neither the federal insurance exchange nor the federal subsidies paid to insurance companies on behalf of low-income people are “federal health care programs.”

The surprise decision, disclosed last week, exempts subsidized health insurance from a law that bans rebates, kickbacks, bribes and certain other financial arrangements in federal health programs, stripping law enforcement of a powerful tool used to fight fraud in other health care programs, like Medicare.

The main purpose of the anti-kickback law, as described by federal courts in scores of Medicare cases, is to protect patients and taxpayers against the undue influence of money on medical decisions.

Kathleen Sebelius, the secretary of health and human services, disclosed her interpretation of the law in a letter to Representative Jim McDermott, Democrat of Washington, who had asked her views. She did not explain the legal rationale for her decision, which followed a spirited debate within the administration.

It’s all exempt from oversight laws:

Most of the buyers are expected to be eligible for subsidies to make insurance more affordable. The subsidies, paid directly to insurers from the United States Treasury, start in January and are expected to total more than $1 trillion over 10 years.

Ms. Sebelius said the Health and Human Services Department “does not consider” the subsidies to be federal health care programs. She reached the same conclusion with respect to federal and state exchanges, built with federal money, and with respect to “federally funded consumer assistance programs,” including the counselors, known as navigators, who help people shop for insurance and enroll in coverage through the exchanges.

What could go wrong? What could go wrong if the government hires “federal consumer assistants” like ACORN workers and other “community organizers” in order to administer federal subsidies? I think it will be fine. It will all work out great.

Oh, wait. I suppose that it’s possible that something like this might happen:

The Centers for Medicare and Medicaid Services (CMS) spent almost $29 million to cover Medicare Part D prescription drugs for 4,139 individuals “unlawfully present” in the U.S. and thus ineligible to receive federal health care benefits, according to an audit by Daniel Levinson, inspector general of the Department of Health & Human Services.

[…]CMS “inappropriately accepted 279,056 PDE [prescription drug event] records with unallowable gross drug costs totaling $28,990,718” between 2009 and 2011, Levinson reported. Total federal expenditures under Medicare Part D during that same two-year time period came to $227 billion.

Medicare Parts A and B cover hospitalization, skilled nursing care, doctor visits, and other medical services and supplies. The IG previously reported in January that CMS had also paid $91.6 million to health care providers to cover 2,600 ineligible illegal aliens.

Now failure like this could never take place in the private sector, because companies would go out of business. But in the government, they just borrow a trillion or two more from your children and call it even. That’s why we should never let the government get involved in things that are best handled by free trades between buyers and multiple sellers who must compete with each other. Health care is not something you hand off to a monopoly. At least, not if you expect transparency, affordability and quality.

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