House subcommittee chair: Is Obama admin. already collecting private health information?

Matthew Boyle Investigative Reporter
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The Obama administration adamantly denies it, but rumors are circulating in Washington that his Department of Health and Human Services is already collecting Americans’ private health information, or at least preparing itself to do so.

Rep. Denny Rehberg, the chairman of the House appropriations subcommittee on Labor, Health & Human Services and Education formalized the rumors by asking about them in a letter to HHS Secretary Kathleen Sebelius on Thursday.

“Specifically, I have been told that HHS has already procured a contractor to build a database and that this contractor has already taken steps to acquire personal health care data from a large claims database,” Rehberg wrote. “I would like to know if these reports are, in fact, true. If so, it would represent an egregious violation of the privacy rights that the American public rightfully demands.”

Rehberg’s question relates to an Obamacare implementation rule which HHS officials proposed recently but haven’t yet formally implemented. HHS spokeswoman Erin Shields told The Daily Caller that these rules aren’t final, and added that the Obama administration has “outlined proposals that will help keep premiums down for the American people.”

“In all cases, patients’ privacy will be protected and any suggestions otherwise are false,” Shields said. “These proposals have not been implemented and we look forward to hearing comments from the American people about these proposals and our work to help make insurance affordable for the American people.”

HHS Center for Consumer Information and Insurance Oversight director Steve Larsen says the rumors aren’t true.

“In a recently released proposed rule, CMS [the Centers for Medicare & Medicaid Services] laid out several general options for collecting information to support risk adjustment, including an intermediate model in which States would collect information such as claims that are currently used for payment purposes,” Larsen said in a Thursday blog post. “Work has not begun on this project.” (RELATED: WH threatens to veto bill prohibiting abortion funding in Obamacare)

Rehberg, however, isn’t stepping back from asking tough questions. “Is HHS working with a contractor to develop a database?” his letter asked Sebelius. “If so, who is that contractor, and what is the cost? Has HHS or any contractor already moved forward with purchasing claims data to establish a database? If so, from whom did they purchase the data and for what purpose?”

The rumors and Rehberg’s questions relate to a controversial Obamacare rule that freshman Republican Rep. Tim Huelskamp of Kansas first discovered in September, one that would require health insurance companies to provide the government with private patient health information.

That information, Larsen says, will be used to develop a “risk adjustment program” so the new federal health care exchanges can make effective cost analyses.

“This information is necessary for a successful risk adjustment program,” Larsen wrote in a blog post Thursday. “In fact, the American Academy of Actuaries recommends making medical condition indicators, such as diagnosis data, a key component of risk adjustment.”

Huelskamp has sharply criticized the new rule as a government invasion of privacy and an overreach of power. “The HHS has proposed the federal government pursue one of three paths to obtain this sensitive information: A ‘centralized approach’ wherein insurers’ data go directly to Washington; an “intermediate state-level approach” in which insurers give the information to the 50 states; or a ‘distributed approach’ in which health insurance companies crunch the numbers according to federal bureaucrat edict,” Huelskamp Follow Matthew on Twitter