HHS is demanding corrections to a General Accounting Office report alleging that HCFA secretly gave three providers favorable Medicare settlements.
John Callahan, HHS' chief financial officer, blasted the report in a May 8 memorandum to David Walker, the GAO's comptroller general. MODERN HEALTHCARE obtained a copy of the memo last week.
"The GAO's conduct in this matter is particularly disappointing because the report is replete with seriously misleading and plainly erroneous characterizations of law and fact," Callahan wrote.
Robert Hast, who investigated the three settlements for the GAO, said the office stands behind its report.
"We are definitely going to respond to (Callahan's memo) point by point," Hast said, adding that the GAO's official response could come as early as this week.
The report alleged that HCFA bent the rules of the Federal Claims Collection Act, which governs how incorrect claims should be adjudicated, to quickly and quietly settle longstanding billing disputes with three providers in New York and California. It also alleged that high-ranking officials at HHS and HCFA, including then-HCFA Administrator Bruce Vladeck, pressured lower-level employees to get the settlements done.
The GAO's report spurred a March 28 congressional hearing titled, "Did HCFA Give Favored Providers Sweetheart Deals?" (April 3, p. 2). Vladeck, now a professor of health policy at New York's Mount Sinai School of Medicine, was the star witness at the hearing. Vladeck denied wrongdoing, calling the allegations "outrageous and untrue."
Callahan's three-page memo defends Vladeck and Charles Booth, director of HCFA's financial services group, who at the time of the settlements ran HCFA's office of payment policy.
Vladeck, through a spokeswoman, declined to comment on the memo.
Callahan also complained that the GAO "did not follow its usual procedures and thereby denied both HCFA and the specific individuals mentioned in the report an opportunity to review and comment on the report's findings before they were made public."