By Toni Clarke
WASHINGTON, April 9 The nominee to lead a key
U.S. healthcare agency said on Tuesday that the agency was
investigating events surrounding a decision on Medicare
Advantage payment rates that sent shares of insurance companies
Marilyn Tavenner was asked about the April 1 rate decision
at a Senate confirmation hearing by Republican Senator Charles
Grassley of Iowa, who has said the rate decision might have been
leaked to Height Securities, an investment research firm.
"We have initiated an internal review. And it will be
extensive," Tavenner said. "I've also asked that the Office of
the Inspector General be brought in on this issue as well."
Tavenner was nominated by President Barack Obama to become
administrator of the Centers for Medicare and Medicaid Services.
She has been acting administrator since 2011.
The CMS is a federal agency that administers the Medicare
program and works with state governments to administer Medicaid
and the State Children's Health Insurance Program.
Grassley's queries were based on an April 3 Wall Street
Journal report that stock market gains on April 1 were due to a
report by Height Securities, saying the announcement would favor
The firm sent an advisory to its clients 18 minutes before
the close of trading on April 1, and before CMS released its
decision publicly, Grassley said.
In those 18 minutes, he said the share prices and traded
volumes of insurers Humana Inc, UnitedHealth Group Inc
and Aetna Inc soared.
"The consequence of a political intelligence firm having
access to this information 18 minutes before the market closed
is astonishing," Grassley said.
"I hope you'll agree that ultimately, you're responsible.
What are you going to do to hold somebody accountable for this
leak?" Grassley asked Tavenner, who responded, "I do not
consider this a small issue. I consider this a huge issue."
Height Securities did not immediately respond to a Reuters
request for comment.