It turns out that President Obama's Health Care czarina, Nancy-Ann DeParle, knows a lot about all that Medicare waste, fraud and abuse that Mr. Obama wants to weed out.
Mr. Obama says he can free up $500 billion to pay for an expanded middle-class health care entitlement by eliminating waste and fraud in Medicare. Many are skeptical, but at least he has an underling who knows all about the subject.
Ms. DeParle ran the Medicare program under Bill Clinton, then left to serve on the boards of several medical care companies that later were charged with Medicare fraud. Five of the companies subsequently paid out $566 million in fraud or product liability settlements, with Medicare often being the victim of the alleged fraud. Meanwhile, she earned millions of dollars in board fees.
We can thank Investigative Reporting Workshop of the American University School of Communication for this information. It conducted a multi-month investigation. In one case, Ms. DeParle joined the board of Specialty Laboratories Inc., a California medical testing company, just two months before "federal investigators suspended Medicare payments and threatened to revoke Specialty's license to operate. The company agreed to pay a $700,000 fine. . . . Specialty was also sued this year by the state of California which seeks to recover hundreds of millions of dollars for the state's Medicaid program for what [California Attorney General Jerry] Brown termed 'massive . . . fraud and kickbacks' over the past 15 years."
One should be careful in jumping to conclusions about true culpability for alleged Medicare fraud. It's not infrequent that regulators bully firms into paying penalties to avoid legal costs or remain in good standing as government contractors. In some cases, the DeParle-connected firms did not admit to fraud or the cases are still unsettled.
But the bottom line, according of the AU Reporting Workshop, is still hard to jibe with the Obama administration's verbal war on the evils of lobbying: "In touting DeParle's accomplishments when he appointed her in March, Obama didn't mention the lucrative private-sector career she built since September 2000, when she left her government job running Medicare for the Clinton administration. Records show she earned more than $6.6 million since early 2001 . . . And the public wasn't told that much of that corporate career was built at companies that have frequently had to defend themselves against federal investigations. Critics see DeParle's re-emergence as a classic case of Washington 'revolving door' syndrome, despite Obama's suggestions that he would shut that door."
By the end of the Clinton administration, Medicare fraud was estimated by the U.S. General Accounting Office to costs taxpayers tens of billions of dollars a year. This happened on Ms. DeParle's watch. It makes one wonder how this czarina is going to root out waste when so much of it piled up the last time she was in charge.
-- Stephen Moore
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