Bribery – Senators bring home the bacon


Read my article here.


Oversight Releases Report on Medicaid Overpayments Costing Taxpayers Billions


WASHINGTON, DC – Today House Oversight and Government Reform Committee Chairman Darrell Issa released a new staff report entitled, “The Federal Government’s Failure to Prevent and End Medicaid Overpayments,” which examines outrageous abuses of federal tax dollars within the Medicaid program, specifically regarding New York State developmental centers (see chart below). The report finds that over the past two decades, New York State has received billions of dollars in Medicaid reimbursements through mismanaged overpayments, and that the overpayments are continuing. Further, the report documents that as Medicaid payment rates increased, Federal officials failed to question the rising cost or implement measures that would bring the rates in line with actual costs.

At 2:00pm today, the Subcommittee on Health Care, District of Columbia, Census, and the National Archives will examine the Centers for Medicare and Medicaid Service’s (CMS) actions that resulted in New York facilities receiving billions of dollars in federal Medicaid overpayments over the past two decades, as well as CMS’s efforts to address the problem.

Key findings from the report include:

• The Committee estimates that the State-operated facilities in New York that house and treat individuals with developmental disabilities have received federal Medicaid overpayments of $15 billion over the past two decades.• The daily per patient payment rate at New York’s developmental centers rose from $348 in 1990 to $5,118 in 2011.  Medicaid’s payment rates to the developmental centers were ten times higher than Medicaid rates for similar privately-run Intermediate Care Facilities in New York.

• The daily payment rate skyrocketed because the formula governing Medicaid payment rates for the developmental centers allowed the State-operated facilities to retain nearly two-thirds of the total Medicaid reimbursement when an individual left the facility.  According to OIG, this formula feature meant taxpayers paid twice for individuals who leave the developmental centers since most of them were transitioned into settings, such as group homes, also financed by Medicaid.

• Although the federal overpayments to New York began in 1990, the Center for Medicare and Medicaid Services (CMS) was unaware of the growing payment rates until they reached $3,715 per patient per day in 2007.  Although learning of the overpayments in 2007, CMS delayed any action for three years and only acted after a local New York newspaper reported on the high overpayments received by the developmental centers.

• At a briefing with Committee staff in June 2012, CMS officials informed the Committee that CMS is negotiating on a plan that gradually reduces the overpayments but allows New York to continue to receive billions in federal overpayments over the next five years.

•  CMS’s failure to question Medicaid’s excessive payments to New York developmental centers is inexcusable given that Medicaid payments to New York State’s developmental centers exceeded the entire Medicaid budgets of 14 states during this time period.  In fact, total Medicaid’s payments to New York’s developmental centers that served about 1,700 residents in 2009 was roughly the same as total payments made on behalf of the 372,522 enrollees in Kansas’s Medicaid program.

• The overpayments violate Title XIX of the Social Security Act which mandates that state Medicaid payment rates must be consistent with “efficiency, economy and quality of care.”  The overpayments also violate Medicaid Upper Payment Limit requirements that Medicaid reimbursements not exceed what Medicare would have otherwise paid for similar services.

Today’s Hearing Witnesses: Mr. John Hagg, Director of Medicaid Audits, Office of Inspector General, Department of Health and Human Services (testimony); Ms. Penny Thompson, Deputy Director, Center for Medicaid & CHIP Services, Centers for Medicare and Medicaid Services (testimony)

Today’s report and hearing continue the Committee’s oversight of how the Medicaid program is misspending tens of billions of taxpayer funds each year.

Burt Prelutsky gathering my thoughts once again


Burt always gets right to the point.

Excerpt:  I definitely hope and pray that Obama is evicted from the White House in the coming election. For one thing, it would dispose of the worst president we have ever had, a distinction I had assumed would be Jimmy Carter’s in perpetuity. Now even Carter’s title as the worst ex-president we have ever had will be in jeopardy if Obama somehow manages to live up to his potential.

But Obama’s defeat would also restore my faith in the American people. Not all of them, you understand. After all, even in defeat, Obama and Biden will manage to carry several states and garner tens of millions of votes in spite of overseeing an administration that has somehow managed to make a terrible economy worse, gutted the military, offended our allies and encouraged the very worst of our enemies.

If Romney and Ryan win, and the GOP manages to regain control of the Senate, the celebration will be short-lived unless they repeal ObamaCare; institute long overdue changes in healthcare; do away with several federal departments and cabinet positions; undertake welfare reform, taking millions of undeserving people off food stamps; passing a federal law against lying about disabilities in order to fatten up pension checks; get America out of the U.N. and the U.N. out of America; and revoking public sector unions.

Even as radical a left-winger as FDR knew that the very idea of allowing civil servants to unionize was insane. It was only after he saw how easily Robert F. Wagner, Jr., won re-election as New York’s mayor after allowing city employees to unionize that John Kennedy decided that he would help assure his own re-election by doing the same for federal employees.

Read full article here.

Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools, CA


Twin Peaks above Poway

Twin Peaks above Poway (Photo credit: Wikipedia)

An example of public officials putting half truths on the ballot to get the taxpayers approval for their overspending.  All citizens should be aware of such dishonesty.  

Excerpt: Last year the Poway Unified School District made a deal: It borrowed $105 million from investors to fund a final push in its decade-long effort to revamp aging schools.

In many ways, the deal was unspectacular. Some of the money was used to pay off previous debts from delayed and over-budget construction projects. The rest went towards finishing upgrades that Poway taxpayers had been promised as far back as 2002. To a casual observer, it was just another school bond.

But Poway Unified’s deal was far from normal.

In 2008, voters had given the district permission to borrow more money to finish its modernization, and they had received a big promise from the elected school board in return: No tax increases.

Without increasing taxes, the district couldn’t afford to borrow money in the conventional way. So, instead of borrowing from investors over 20 or 30 years and paying the debt down each year, like a mortgage, the district got creative.

With advice from an Orange County financial consultant, the district borrowed the money over 40 years in a controversial loan called a capital appreciation bond. The key point for the district: It won’t make any payments on the debt for 20 years.

And that means the district’s debt will keep getting bigger and bigger as interest on the loan piles up.

 Read full Voice of San Diego article here.

Economic Lessons from American History by John Steele Gordon


Experiences from bank runs during the Great De...

Experiences from bank runs during the Great Depression led to the introduction of deposit insurance in the US. (Photo credit: Wikipedia)

John Gordon gives great insight into the historical implications of what our government is doing to destroy our standing in the world.

Excerpt:  Today we live in a world far beyond the imagination of those who were alive in 1607. The poorest family in America today enjoys a standard of living that would have been considered opulent 400 years ago. And for most of this time it was the United States that was leading the world into the future, politically and economically.

This astonishing economic transformation provides rich lessons in examples of what to do and not do. Let me suggest five.

1. Governments Are Terrible Investors

2. Politicians Have Self-Interest Too

3. Immigration is a Good Thing

4. Good Ideas Spread, Bad Ones Don’t ( I selected this snippet as a sample of the history surrounding one of my favorite causes, tort reform.) 

Thomas Jefferson the first person in history to advocate a system of decimal coinage, and the United States the first country to adopt one. This was a very good idea, and, as good ideas always do, it quickly spread. Today every country on earth has a decimal currency system.

But if Jefferson’s decimal coinage concept was a good idea that quickly spread around the world, another idea that developed here at that time was lousy: the so-called American Rule, whereby each side in a civil legal case pays its own court costs regardless of outcome. This was different from the English system where the loser has to pay the court costs of both sides.

The American Rule came about as what might be called a deadbeat’s relief act. The Treaty of Paris (which ended the American Revolution) stipulated that British creditors could sue in American courts in order to collect debts owed them by people who were now American citizens. To make it less likely that they would do so, state legislatures passed the American Rule. With the British merchant stuck paying his own court costs, he had little incentive to go to court unless the debt was considerable.

The American Rule was a relatively minor anomaly in our legal system until the mid-20th century. But since then, as lawyers’ ethics changed and they became much more active in seeking cases, the American Rule has proved an engine of litigation. For every malpractice case filed in 1960, for instance, 300 are filed today. In practice, the American Rule has become an open invitation, frequently accepted, to legal extortion: “Pay us $25,000 to go away or spend $250,000 to defend yourself successfully in court. Your choice.”

Trial lawyers defend the American Rule fiercely. They also make more political contributions, mostly to Democrats, than any other set of donors except labor unions. One of their main arguments for the status quo is that the vast number of lawsuits from which they profit so handsomely force doctors, manufacturers, and others to be more careful than they otherwise might be. Private lawsuits, these lawyers maintain, police the public marketplace by going after bad guys so the government doesn’t have to—a curious assertion, given that policing the marketplace has long been considered a quintessential function of government.

The reason for this is that when policing has been in private hands, self-interest and the public interest inevitably conflicted. The private armies of the Middle Ages all too often turned into bands of brigands or rebels.

5. Markets Hate Uncertainty

Usually, when there has been a steep decline in economic activity, recovery is equally steep. The valley is V-shaped. That is what happened in 1920, when there had been a severe post-war depression and then a strong recovery. So why was the recovery so slow in the 1930s? One reason, according to an increasing number of economic historians, is that Franklin Roosevelt had a bad habit of changing his mind. While highly intelligent, he was no student of economics and seldom read books as an adult. So much of his program was, essentially, seat-of-his-pants policy. First there was the National Recovery Administration, which amounted to a vast cartelization of the American economy. When the Supreme Court threw it out—by a unanimous vote—FDR moved on to other remedies, including big tax increases on the rich.

But markets, which can function even in disaster with ruthless efficiency, hate uncertainty. When uncertainty regarding the future is high, they tend to tread water. As a result, there was what is known as a “strike of capital.” While corporations often had large cash balances—General Motors made a profit in every year of the Great Depression—and banks had money to lend, there was little investment and few loans made. Both the banks and the corporations were too uncertain about what the government was going to do next.

That is precisely what is happening today. Banks and corporations have plenty of money. Apple alone is sitting on about $100 billion worth of corporate cash. And yet the recovery from the crash of 2008 has been tepid at best. The valley is U-shaped. Undoubtedly a big reason for that is the enormous uncertainty that has plagued the country since 2008. Will health care—one-sixth of the American economy—be taken over by the folks who run the post office? Will the Bush tax cuts be ended or continued? Will the corporate income tax go up or down? Will manufacturing get a special tax deal? Will so-called millionaires—who, when you listen carefully to what liberal politicians are saying, can earn as little as $200,000 a year—be forced suddenly to pay “their fair share”?

Who knows? So firms and banks are postponing investment decisions until the future is clearer. Perhaps the clearing will happen on November 6.

Read full article here.