At least 436 employees of the Department of Health and Human Services received advance word of an upcoming Medicare decision, and now federal investigators are looking into whether they tipped off Wall Street investors.
A review of emails by Republican Sen. Charles E. Grassley of Iowa found that hundreds of HHS employees received advanced word of a billion-dollar Medicare decision weeks before the official announcement, according to the Washington Post. Trading in Humana and other private health insurers’ stock spiked in the period before the announcement.
Insiders at HHS had advance word of the Centers for Medicare and Medicaid Services’ April 1 decision to spend an additional $8 billion of the taxpayers’ money on the private-sector Medicare Advantage program. HHS officials told the post this was necessary due to the complexity of Medicare policy. Grassley wants to know how Wall Street investors learned of the federal ruling.
The Justice Department and the Securities and Exchange Commission have launched investigations to find out whether Wall Street investors gained prior access to knowledge of the decision.
Former director of the Medicaid program Thomas Scully claims it is likely that hundreds of people had access to the billion-dollar verdict, as it was a highly complex decision.
Grasseley told Post his office found 436 DHS employees knew of the decision nearly two weeks before it became public.
“This should sound an alarm,” Grassley told the newspaper. “It should result in better controls to avoid unfair access to information that the average investor could never tap.”