The man President Bush nominated to lead HHS' inspector general's office would, if confirmed, arrive in a high-profile position during an election year when corporate fraud and white-collar crime dominate both headlines and courtroom dockets.
But at least one hospital industry leader said that even if Daniel Levinson, the current inspector general at the General Services Administration, is confirmed by the Senate for the position at HHS, his influence could be affected by the results of the November election.
Chip Kahn, president of the Federation of American Hospitals, said it's important to permanently fill the HHS inspector general position quickly. Kahn said Acting Principal Deputy Inspector General Dara Corrigan's hands have been tied by the "acting" title she's held since replacing former HHS Inspector General Janet Rehnquist in June 2003.
"Just having a permanent inspector general will enable everyone in the provider community to know there is a place where the buck stops," Kahn said.
Even though inspectors general can carry over from one administration to the next, the election of a Democratic president could diminish the base of support for an inspector general taking office in the waning days of a Republican administration.
"The question is whether he'll hold the job for any length of time," Kahn said. "If he does, he can exert a significant impact and put his mark on the office. If not, we could go through this whole process again."
At deadline, no Senate confirmation hearing had been set, according to White House and congressional sources.
Levinson is described by former colleagues and friends as a serious, competent, soft-spoken career government-service veteran whose talent and experience qualify him for the challenging task of HHS' inspector general. As inspector general for the General Services Administration, a federal agency that functions as the government's business manager, Levinson has been charged with preventing and attacking fraud, waste and abuse in government contracting. He has served in Republican administrations since the Reagan era as deputy counsel for the Office of Personnel Management, general counsel for the Consumer Product Safety Commission and chairman of the Merit Systems Protection Board.
Levinson possesses exactly the right credentials for the job, except for experience in healthcare, said Stuart Gerson, a former U.S. Justice Department official now practicing health law with the Washington office of Epstein, Becker & Green.
"He's already an inspector general, so he has that track record and knows what being an inspector general means," he said. "And he is someone known to the administration who is reliable and qualified to do this job."
While Levinson has limited experience with federal healthcare programs, as an attorney, legal scholar and certified fraud examiner he possesses the right tools for the job, former colleagues said last week.
Steve Dillingham, now a Justice Department manager, said the New York native is highly valued for his intellect and keen legal mind. "He's a valuable information resource," said Dillingham, who described Levinson as a "soft-spoken gentleman with a cerebral nature."
Martin Baumgaertner worked at the Merit Systems Protection Board with Levinson when he chaired the quasi-judicial agency that enforces whistle-blower and other employment laws for 2 million federal employees from 1986 to 1993. He called Levinson "a terrific leader for our agency."
Another ex-colleague, Llewellyn Fischer, a Salem, Ore., lawyer in private practice, said Levinson got congressional experience as a chief of staff for Rep. Bob Barr (R-Ga.) from 1995 to 1998 and, based on previous federal leadership jobs, understands how agencies interact with legislative and executive branches. "I've seen him gracefully handle situations that would test the patience of most people," Fischer said.
The inspector general's office has expanded its reach in the last two decades. In 1981, former Inspector General Richard Kusserow's first year in office-one year after the Department of Education left HHS-the office logged 39 exclusions from federal health programs, 165 prosecutions and $165 million in savings, according to figures provided by the inspector general's office.
Those figures skyrocketed by his departure in 1992 to 1,603 exclusions, 1,893 prosecutions and $5.8 billion in savings, but dropped after the Social Security Administration left HHS in 1995. In 2000, June Gibbs Brown's last year as inspector general, the office recorded 3,350 exclusions, 414 prosecutions and $15.6 billion in savings. Exclusions fell to 3,448 in 2002, the last full year of Rehnquist's term, which reported 517 prosecutions and $21.8 billion in savings. In her year in office, Corrigan oversaw 3,588 exclusions, 490 prosecutions and $27.8 billion in savings.
Levinson, 55, whom Bush nominated July 13, would direct an office under a spotlight since its last permanent chief was sworn in three years ago. Rehnquist resigned from the post under pressure June 1, 2003, after two government reports found she had illegally possessed a firearm, allegedly caved in to political pressure to reduce a hospital settlement and forced major personnel changes in the independent watchdog agency, damaging operations and morale.
Since her appointment last year as acting principal deputy inspector general, Corrigan has been credited with restoring morale and improving operations within the office, which includes 1,500 auditors, investigators and attorneys on a $170 million budget. But Corrigan was told she would not be appointed to the position on a permanent basis, and thus was unable to make key management changes or decisions.
Not surprisingly, healthcare costs and accessibility are election hot-button issues, and the Justice Department and the inspector general's office have publicized fraud enforcement efforts with a series of high-profile prosecutions and fraud settlements. Several pharmaceutical firms have recently logged settlements exceeding $100 million, with more predicted in the coming weeks. Last week, eight corporate executives and sales and marketing representatives from Lake Forest, Ill.-based TAP Pharmaceuticals were acquitted in a federal criminal trial by a Boston jury of charges of paying bribes and kickbacks to physicians and hospital officials.
But Adelphia Communications Corp.'s John Rigas was recently convicted and Enron Corp.'s Kenneth Lay was criminally indicted several weeks ago. HealthSouth Corp.'s founder, Richard Scrushy, also faces an upcoming trial in a fraud investigation that has already inked more than a dozen criminal plea agreements.
Nobody wants to be perceived as soft on fraud. But because he is unknown to many healthcare insiders, Levinson's policy positions are difficult to predict. Reached at his GSA office last week, he declined comment until after a confirmation hearing.
Hospitals have not always had an amicable relationship with the inspector general. American Hospital Association spokesman Richard Wade said the AHA has learned "We create a new relationship with every new administration and every new inspector general."
Wade said the most famous dispute was the False Claims Act litigation the AHA filed in 1996 against the government challenging its use of the Civil War-era law. The case was settled in 2001.
"This clearly came at a time when hospitals were incensed over what was going on and sought legislative and legal redress for what we thought was unfair," he said. "But our pattern has been to try to create a relationship that allows us to talk shoulder to shoulder without becoming adversarial, to try to reach solutions to our problems."
