Medicare Advantage/stock incident, Tavenner nomination


To:    Reporters and Editors

Re:    Medicare Advantage/stock incident, Tavenner nomination

Da:    Tuesday, April 23, 2013

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 March 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.