Healthcare Business News
HHS Secretary Kathleen Sebelius

Sebelius' fundraising for healthcare reform questioned

By Jonathan Block
Posted: May 13, 2013 - 7:30 pm ET

Republican lawmakers are digging their teeth into the Obama administration's efforts to solicit help and donations for private organizations that are working to enroll millions of Americans in new coverage under the healthcare reform law.

Sen. Lamar Alexander (R-Tenn.) said late Monday that he will ask the Government Accountability Office this week to open an investigation into the legality of HHS Secretary Katherine Sebelius' efforts to encourage private health stakeholders to spend money promoting Patient Protection and Affordable Care Act.

The House Energy and Commerce Committee, meanwhile, launched an investigation and sent letters to Sebelius and the CEOs of 11 large health insurance companies seeking information on communications between HHS and the industry.

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HHS maintains that Sebelius is within her authority as secretary to conduct the fundraising effort. “A special section of the Public Health Service Act allows the secretary to support and to encourage others to support non-profit organizations working to provide health information and conduct other public health activities,” HHS spokesman Jason Young said in an e-mail.

Alexander, the ranking member of the Senate Health, Education, Labor and Pensions Committee, compared the secretary's actions to those of former Marine Corps Lt. Col. Oliver North's role in the infamous Iran-Contra affair that was exposed in November 1986.

“In each case, the money seems to be raised privately, and spent through private entities for a function that Congress has refused to appropriate money for,” Alexander said on the Senate floor. The Republican-led House has rebuffed the administration's requests for resources to implement the healthcare law. Sebelius, like North, may have engaged in actions that violated the Anti-Deficiency Act, a 1982 law that prevents the federal government from entering into a contract that is not completely funded, Alexander said.

Alexander first voiced opposition to Sebelius' activities on Saturday after HHS confirmed a day earlier that Sebelius has asked businesses and not-for-profit organizations for their help.

The spokesman for HHS said the legal foundation for the efforts to engage private companies in the rollout has been applied frequently without controversy. “This provision has been in place since 1976, and has applied to and has been used by previous secretaries, including around the launches of Medicare Part D and the Children's Health Insurance Program,” Young said. “It was even cited as part of President Reagan's establishment of the President's Council on Physical Fitness.”

In his floor speech, Alexander said it was “far-fetched” to say that statute gives Sebelius authority “to encourage third parties to give money to non-profits” to support the Affordable Care Act.

Several large healthcare companies are based in Alexander's home state of Tennessee, including hospital chains HCA, Community Health Systems and Vanguard Health Systems. Alexander spokesman Jim Jeffries declined to comment on how those constituents would be affected by the success or failure of the Affordable Care Act's coverage provisions.

Tim Jost, a professor at Washington & Lee University School of Law and a nationally recognized authority on the health reform law, said that Sebelius has been forced to raise funds since Republicans are attempting to repeal the law by refusing to fund parts of its implementation.

“Insurers, providers and tax preparers certainly have a stake in the implementation of the ACA, and it is reasonable to expect them to help educate consumers as to its benefits,” Jost said.

Jost also pointed out that when the Medicare Part D drug benefit went into effect in 2006—when former president George W. Bush was president—America's Health Insurance Plans, the National Association of Chain Drug Store and the National Community Pharmacists Association, released a Medicare prescription drug plan guide.

Follow Jonathan Block on Twitter: @MHjblock

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