Tom Price owes American taxpayers $90 million, not $51,887.31

When confronted with his flagrant misuse of taxpayers’ money for unnecessary private and military jet travel, Secretary of Health and Human Services (HHS) Tom Price vowed to write a check for $51,887.31, the extra cost taxpayers incurred for his private chartered flights. I agree that Tom Price owes American taxpayers for the unnecessary bills that his actions created .  I also wish that more public officials would take responsibility for spending taxpayers’ money recklessly as Tom Price has.

Tom Price’s unexpected offer to compensate taxpayers under these conditions got me thinking. Do government officials nominated by our elected officials, especially those in high ranking, powerful positions, have a responsibility to spend taxpayers’ money wisely? Did Tom Price lose his job as Secretary of HHS because he didn’t do so or because he was particularly flagrant about the misuse? When he took financial responsibility for his misuse of taxpayers’ money, he opened the door for us to look a bit closer to see if Tom Price owes American taxpayers more. It didn’t take me long to find another example.

When Tom Price was nominated  to be the Secretary of Health and Human Services (HHS) back in January, 2017, I warned that he would move quickly to undo any Obamacare (PPACA) reforms that threatened the financial interests of healthcare businesses even if those reforms were good for the American people. As the Secretary of HHS over the past eight months, Dr. Price has tirelessly worked to dismantle several Medicare cost reduction (Medicare savings) programs under Obamacare (PPACA) reform.  These cost reduction programs reduce Medicare spending without affecting Medicare benefits.  Tom Price acted in spite of the fact that the American people had made it clear during this time that they did not want a repeal of Obamacare (PPACA) WITHOUT a better legislated replacement.  Tom Price is responsible for changes to these programs resulting in higher Medicare spending and therefore I believe Tom Price owes American taxpayers for the added costs.

Let’s take a more detailed look at what Tom Price has done to just a couple of Medicare cost reduction programs, specifically those that change how healthcare providers are paid. Under Obamacare (PPACA), it was CMS’s goal  to convert 50% of all Medicare fee-for-service (“quantity over quality”) payments into payments that are structured to deliver “quality over quantity” (value-based payments) by 2018…until Secretary Price took the helm. All Medicare cost reduction programs together were expected to save the American taxpayer $250 billion over ten years’ time.

Tom Price owes American taxpayers for changes to CJR program

In a recent blog post, I described CMS-5524-P, an HHS rule change that cancels (Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment models) and modifies (Comprehensive Care for Joint Replacement (CJR)) value-based Medicare payment models (to replace fee-for-service). These payments models are often called bundled payments,   Within this HHS rule change, we will find why why Tom Price owes American taxpayers much more than the $51,887.31 debt he already acknowledged.

Tom Price owes American taxpayers for increased Medicare spendingI will not be addressing the financial impact of the cancellation of the first two models on the American taxpayer because when Dr. Price took over as Secretary of HHS, these programs were still in the voluntary phase of use and therefore easier to cancel than the mandatory CJR payment program. Let’s look at the CJR program changes Tom Price made.

Tom Price cannot hide the fact that the modifications to the CJR program are projected to cost the American taxpayer $90 million more (for 2018-2020) in Medicare spending. In this program, bundling payments for hip and knee replacements reduce Medicare spending from the fee-for-service (“quantity over quality”) payments. I had to smile when I read about this Medicare spending increase in Tom Price’s rule change language (“we estimate that the total CJR model impact after the changes in this proposed rule will save the Medicare program $204 million, instead of $294 million, over the remaining 3-year performance period (2018 through 2020) of the CJR model.”) because the language used tries to obscure the fact that the American taxpayers were going to have to pay $90 million more as a result. This is shown in the figure below!

Tom Price owes American taxpayers $90 million from CJR increase

The increase in Medicare spending this rule change causes will increase Medicare Part B premiums for Medicare beneficiaries and increase the amount that all taxpayers will have to pay to fund what premiums do not cover.  Remember that the American taxpayer funds 42% (2015) of all Medicare spending out of yearly income taxes.  I assume that Tom Price knows who he has stuck with the extra $90 million increase in Medicare spending.

What are the Justifications for increasing Medicare spending by $90 million?

Dr. Price’s reasons for the HHS rule change amounts to “because I can” (“We note that review and reevaluation of policies and programs, as well as revised rulemaking, are within an agency’s discretion, and that discretion is often exercised after a change in administration occurs.”). Unlike our elected officials who must answer to their constituents at the polls, Dr. Price was nominated by President Trump as Secretary of HHS and therefore is not directly responsible for actions that hurt the financial well-being of Americans.

Another reason Secretary Price used to justify the rule change– “it is not in the best interest of the agency or affected providers” –clearly identifies what groups are important in his decision-making plans. The agency (HHS) didn’t seem to have a problem with these programs (and saving the American taxpayer $90 million) before Dr. Price became HHS Secretary. This reason could more accurately be written as “it is not in the best interest of Tom Price or affected providers”.

In reading the rule change, we find that Secretary Price could not even justify his actions by finding fault with the programs he is eliminating or scaling back (“we continue to believe that cardiac and orthopedic episode models offer opportunities to redesign care processes and improve quality and care coordination across the inpatient and post-acute care spectrum while lowering spending”). Obviously, the effect of bundled payments on the healthcare consumer (increased quality and coordination of care) or the American taxpayer (decreased taxes with the Medicare savings generated) are much less important considerations for Dr. Price.

Tom Price owes American taxpayers an extra $90 million?

When Secretary Tom Price offered to compensate the American taxpayers for his flagrant misuse of government funds, he opened the door to the concept of taking financial responsibility for his actions. Because he pushed the CMS-5524-P rule change while he was Secretary of HHS, I believe Tom Price owes American taxpayers an extra $90 million. This rule change cancelled or modified key Medicare cost reduction programs for self-serving (political and special interest) reasons that do not take into account the interests of the American taxpayer and therefore constitutes a flagrant misuse of taxpayer funds. Americans have made it clear to their elected officials that an Obamacare (PPACA) repeal WITHOUT replacement was unacceptable and Dr. Price should not have continued to do so in his position. The HHS rule change repeals parts of Obamacare WITHOUT replacing the lost cost savings (and improvement to quality of care) they would have generated for American taxpayers.

The Comprehensive Care for Joint Replacement (CJR)) payment model is just one Medicare cost reduction program that, if cancelled or put on the back burner, will result in higher Medicare spending. Should Dr. Price be unaccountable and free to extend fee-for-service (“quantity over quality”) health care delivery for the benefit of healthcare providers only?

Pushing this HHS rule change through is no less egregious than robbing taxpayers through flagrant misuse of travel budgets. While I believe that Dr. Tom Price needs to compensate taxpayers for his actions, I realize that Tom Price is not the only government official who owes the American taxpayer money. Perhaps we cannot get Tom Price to pay $90 million (I’m not even sure if he paid the $51,887.31 he said he would pay), but maybe we can let our elected government officials that putting the interests of the American taxpayer and healthcare consumer first should be government policy. What do you think?


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