Tag Archive: financial


IRS is underfunded but ready for health care law, commissioner says

Filed Under: Insurance News
Mar.23, 2012

The Internal Revenue Service needs its requested 8 percent budget increase to make up for cuts exacted in the past two years, IRS Commissioner Douglas Shulman told Congress in a pair of hearings. The service is well-prepared to implement coming tax changes from the Affordable Care Act, despite a loss of 5,000 employees, he said.

Testifying on Wednesday to the House Appropriations Financial Services and General Government Subcommittee, Shulman said the fiscal 2013 request of $12.8 billion would allocate an additional $639.3 million to “restore lost resources resulting from reductions in IRS funding made over the past two years.”

He said the agency’s efforts to become more efficient have resulted in $1 billion in savings from fiscal 2009 through the proposed budget for 2013 — thanks in part to “reductions in outside contracts, training and noncase-related travel.”

The drop in head count was accomplished through buyouts for 1,000 employees, attrition and a hiring freeze. Some 3,000 employees left enforcement operations.

“The IRS’ workforce is our greatest asset,” Shulman said.

“Three years ago, I embarked on a campaign to make the IRS the best place to work in the federal government,” he said, noting the agency had risen from a ranking of 127 to 65 in the Partnership for Public Service’s “Best Places to Work in Federal Government” survey. It also ranked third among large agencies in employee engagement.

Despite recent cutbacks and a barrage of end-of-session tax legislation, the IRS’ own satisfaction survey shows stable rates among employees. The survey of taxpayer satisfaction by the American Customer Satisfaction Index showed IRS services rated 73 on a scale of 100 by individual tax filers, he noted, a three-point rise over the previous year.

During the current tax filing season, the IRS directly deposited 51.3 million refunds to taxpayers compared to 49.8 million in 2011 — a 3 percent increase, Shulman said Thursday before the House Ways and Means Oversight Subcommittee. As of March 10, it had received more than 70 million individual returns.

Republicans on the panels quizzed Shulman sometimes skeptically during a month of heightened political maneuvering as the U.S. Supreme Court prepares for oral arguments on the constitutionality of President Obama’s health care reform. Oversight Chairman Charles W. Botany Jr., R-La., asked whether the IRS had sufficient resources, particularly for enforcement. Rep. Lynn Jenkins, R-Kan., noted the Obama budget calls for $360 million and 900 new employees for the IRS to implement the tax credits under the Affordable Care Act, which contains, she said, “the controversial individual mandate penalty.”

Shulman said the IRS was experiencing “the predictable effect of having less in resources,” but said he was “proud that employees had mitigated the effects through efficiencies and working smarter.” He said his team had been balancing its focus between enforcing compliance and providing taxpayer service, while installing information technology for health care implementation using funds provided through an earlier authorization.

Responding to a question about health-care law tax credits many small businesses describe as too complicated, Shulman urged Congress to approve the president’s fiscal 2013 budget, which he said, “has a significant proposal” to simplify and expand the small business credits.

He also said preparations were on track for state health insurance exchanges scheduled to stand up in 2014.

“I understand the heartfelt policy debate on the Affordable Care Act — some like it, some don’t,” Shulman said. “But there are a lot of constituents in every district who will expect their tax credits when they show up at the exchanges. We’re not involved in health policy, but in moving the money to make the law work.”

Tags: , , , , , , , , , , ,
read more

A Dim View of the House GOP Budget

Filed Under: Insurance News
Mar.21, 2012

ARCHIVES

Stop the presses: the Obama administration thinks the House GOP budget plan unveiled yesterday is bad for the country. Specifically, Office of Management and Budget Acting Director argues  in a blog post today that the deep cuts in domestic discretionary spending mandated in the Republican plan would wreak havoc with basic operations of government:

The resolution would also make it extraordinarily difficult for government to do the basic business that people rightly expect of it. Evenly allocated cuts would mean deep reductions in the Federal Aviation Administration, leading to the elimination of air traffic control services in parts of the country. In 2014, there will be more than 4,500 fewer federal agents at the Department of Justice and the FBI to combat violent crime, pursue financial crimes, help secure the southwest border, and ensure national security, resulting in over 160,000 fewer criminal cases that can be prosecuted over the next decade. Starting in 2014 and continuing thereafter, hundreds of national parks would have to shut down for parts of the year. In 2014, more than 100,000 fewer workplace inspections to protect worker safety would occur. Basic enforcement of clean air and water laws would erode dramatically, with harmful effects on the health and well-being of the American people. We would not meet basic standards for food safety, putting the food we eat and serve our kids at risk. And our ability to efficiently administer core programs like Medicare and Social Security would be undermined; wait times would increase dramatically.

Tom Shoop is vice president and editor in chief at Government Executive Media Group, where he oversees both print and online editorial operations. He started as associate editor of Government Executive magazine in 1989; launched the company’s flagship website, GovExec.com, in 1996; and was named editor in chief in 2007.

Want to contribute to this story? Share your addition in comments.

Please enable JavaScript to view the comments powered by Disqus.

Tags: , , , , , , , , ,
read more

Suspect in Afghan killings was once found liable in financial fraud

Filed Under: Insurance News
Mar.20, 2012

 

Robert Bales, the U.S. staff sergeant being held following the massacre of 16 Afghan civilians last week, joined the Army following the attacks of Sept. 11 and months after he had been accused of engaging in financial fraud as a stock broker, according to The Washington Post.

Bales was accused of the fraud while handling the retirement account of an elderly client in Ohio, according to The Post. An arbitrator later ordered Bales and the owner of the firm that employed him to pay $1.4 million — about half for compensation and half in punitive damages — for taking part in “fraud” and “unauthorized trading,” according to a disciplinary board for brokers and brokerage houses.

The Post also reports that Bales’ home near Tacoma, Wash., was put up for a short sale a few days before the March 11 shootings in Afghanistan.

Tags: , , , , , , ,
read more

Ron Paul: No federal financial aid for tornado victims

Filed Under: Insurance News
Mar.05, 2012

Rep. Ron Paul, R-Texas, stood by his libertarian beliefs on Sunday, saying that victims of the violent storms and tornadoes that have battered a band of states in the South and Midwest in recent days should not be given emergency financial aid from the federal government.

“There is no such thing as federal money,” Paul said, on CNN’s State of the Union. “Federal money is just what they steal from the states and steal from you and me.”

“The people who live in tornado alley, just as I live in hurricane alley, they should have insurance,” Paul said.

Paul said there was a role for the National Guard to restore order and provide care and shelter in major emergencies, but that the Federal Emergency Management Agency led to nothing but “frustration and anger.”

“To say that any accident that happens in the country, send in FEMA, send in the money, the government has all this money—it is totally out of control and it’s not efficient,” Paul said.

Tags: , , , , , , , , , ,
read more

Government’s bookkeeping improving only slowly, panel told

Filed Under: Insurance News
Mar.01, 2012

The Defense Department’s lack of auditability, the Treasury Department’s inability to reconcile intragovernmental activity and an “ineffective process” for preparing financial statements are three long-standing impediments to getting the government’s books in order, the comptroller general told a House subcommittee Thursday.

Billions of dollars in improper payments, unfocused information security purchasing and inadequate tax collection activities — along with the usual partisan disagreements on spending — also were mentioned as major contributors to the country’s fiscal woes during a House Oversight and Government Reform Subcommittee on Government Organization, Efficiency and Financial Management hearing.

Despite these challenges, which contributed to the government’s failure, once again, to achieve a clean opinion on its consolidated financial statements in fiscal 2011, there has been progress, Comptroller General Gene Dodaro told the subcommittee. “Against a background of fiscal pressure, [Congress and the agencies are] creating an environment for fiscal improvements,” he said.

The Internal Revenue Service has some material weaknesses in its financial management, but is “making good strides” in reducing the tax gap, Dodaro said. He praised Defense Secretary Leon Panetta for giving the military services an interim deadline for progress by 2014, which should enhance prospects for achieving the congressional mandate of auditability by 2017.

U.S. Controller Danny Werfel offered an upbeat appraisal as well. “We have also made important progress in producing timely financial statements that can pass the scrutiny of our independent auditors,” he said. “This progress reached its apex in fiscal 2011,” when 23 of 24 agencies required under the 1990 Chief Financial Officers Act to obtain an audit opinion succeeded. This was “the best performance by the federal government to date,” Werfel said.

Of the 23, all but two earned a clean, or unqualified, opinion, and the number of agencies reporting auditor-identified material weaknesses in financial statements dropped from 61 a decade ago to 31, according to Werfel. All major agencies, he added, met the Office of Management and Budget’s 45-day deadline for producing a financial statement.

Richard Gregg, Treasury’s fiscal assistant secretary, pointed to progress on deficit reduction through the 2010 Affordable Care Act and the 2011 Budget Control Act. He reiterated the Obama administration’s position in favor of “tax reforms that increase revenues and that are done in a broad-based and balanced way so as not to overburden the taxpayer.”

He said his department “has improved precision in its analysis of intragovernmental differences in recent years, resulting in the identification and resolution of tens of billions of dollars in difference.”

Subcommittee Chairman Rep. Todd Platts, R-Pa., asked whether the $80 billion the government spends on information technology is a sign of waste. Both Dodaro and Werfel agreed that too many agencies purchase IT with opaque requirements, using a project scope with too many “nice to haves” in the software and too long a time line from the request for a proposal to final functionality.

Platts expressed some skepticism that the health care reform law was saving money, pointing to recent controversies over the reimbursement rate for doctors in the Medicare program.

Dodaro replied that the health care field is “inherently uncertain” — more so if it seems like Congress might revisit the law — but pointed to plans to reduce payments to the hospital industry and assumed productivity improvements.

Rep. Gerry Connolly, D-Va., called for “ending this mindless narrative that treats all spending as the same,” saying Congress should enact greater spending on investments in good program and contract managers who can avoid such problems as improper payments.

Platts, who is retiring from Congress, said he has long sought to raise awareness among the public on how important the government’s finances are. “When we had a hearing on use of steroids in Major League Baseball, the room was packed,” he complained, “but here, we’re talking about spending trillions of dollars and we have lots of empty seats.”

Tags: , , , , , , , , , , , ,
read more

Medicare anti-fraud software disappoints senators

Filed Under: Insurance News
Feb.27, 2012

Software designed to help Medicare managers zero in on fraudulent claims is showing disappointing results, according to three senators who evaluated a program that the Health and Human Services Department praises as an effective new anti-fraud tool.

The Fraud Prevention system, a $77 million predictive analytics software program that the Centers for Medicare and Medicaid Services has been using since summer 2011, scans multiple Medicare claim invoices and kicks out suspicious patterns, such as high-volume wheelchair purchases in one location.

HHS Secretary Kathleen Sebelius on Feb. 14 praised the program as a key component in joint HHS-Justice Department successes in prosecuting Medicare fraud.

But recently summarized results reported only $7,591 in suspended payments, among other indicators, a total called “disappointing” by Sen. Tom Carper, D-Del., the chairman of the Senate Homeland Security and Governmental Affairs Federal Financial Management Subcommittee. Carper has been monitoring Obama administration efforts to reduce improper payments from government.

In December 2011, Carper joined with Sens. Tom Coburn, R-Okla., and Scott Brown, R-Mass., to send a letter to CMS expressing concern that “CMS may not have sufficient metrics and processes in place to ensure the success of predictive analytics technology” in the anti-fraud program. The senators posed 10 detailed questions on the agency’s progress in applying the technology that was required under the 2010 Small Business Operations Act and contracted out to Northrop Grumman Corp. and IBM.

In a Jan. 27 reply, Peter Budetti, CMS deputy administrator and director for program integrity, wrote that his agency has metrics in place and the software is “significantly changing” the way it pursues fraud and has brought successes.

“Predictive analytics are now being used to review all Medicare Part A, Part B and durable medical equipment claims prior to payment. For the first time, CMS has a real-time view of fee-for-service claims across claim types and the geographic zones of its claims processing contractors,” he said.

Leads from the program had resulted in nine overpayment determinations, valued at $2,196,369, and had prompted 437 new investigations and aided 351 existing investigations with real-time information, Budetti added. He said CMS also has revoked Medicare billing privileges and has initiated 26 revocation actions against providers and suppliers based on leads generated by the system, affecting providers who were paid $7,366,974.

The Fraud Protection System “has greatly increased collaboration among our fraud contractors,” such as Office of Inspector General and FBI investigators and Justice prosecutors, Budetti wrote.

Ted Doolittle, deputy director of Medicare’s anti-fraud program, responded to the senators’ complaints in an interview with the Associated Press, saying, “Suspending payments is only one way of stopping the money. There’s lots of ways of stopping the money, and we are using them all. Looking at payment suspensions only — that’s an unsophisticated view that doesn’t give you a full picture of our activities.”

Carper, according to his staff, has urged CMS to present a comprehensive plan to address the program’s failings and will continue to monitor its progress through his subcommittee oversight and future hearings.

Earlier this month Carper praised CMS’ Medicare Recovery Audit Contractors program for recouping $797 million in 2011 and for being “on track to double the amount of recovered overpayments this year compared to last year.”

Tags: , , , , , , , ,
read more

Risky Business

Filed Under: Insurance News
Feb.17, 2012

The current spike in gasoline prices and the flap over the Obama administration’s proposed requirement that religiously affiliated institutions provide their employees health insurance covering contraception are useful reminders that economics and politics are both dynamic, not static. It’s always risky to project that the status quo will hold, particularly when an election is more than eight months away.

There’s no question that the economic numbers over the past five months have been significantly better than they were in the first nine months of 2011. They’ve risen from a level at which any president would have a difficult time getting reelected to one that suggests this might be a competitive race that could go either way. But those numbers are in the abstract. The 30-cent surge in gasoline prices in recent months is largely attributable to political instability in Iran and elsewhere in the Middle East, and it is something that average voters can see, feel, touch, and hate. Don’t be surprised to see anger start bubbling up anytime now.

It’s anyone’s guess where the economy, unemployment, and gas prices will be this summer. We should be mindful of the fluidity of economic news, good or bad. Things (other than gasoline prices) look better now than they did four months ago, but what will they look like four or eight months from now? Will Europe fall into a recession? Will there be a collapse of major financial institutions in the eurozone? These are very big questions that cannot be answered now.

Similarly, controversies can pop up literally overnight, altering how we perceive the political and economic terrain. President Obama’s fumbling of the contraception issue last week—ending in a compromise that should have been his administration’s starting position—stole headlines from very pro-mising job news. The Bureau of Labor Statistics reported a drop in initial unemployment claims, and its Job Openings and Labor Turnover Study survey showed there were 3.4 million job openings nationwide on the last day of December 2011, compared with 3.1 million on the last day of November. These great stories for the White House got stepped on by the contraception fight.

Even the smartest economists in the country disagree about the U.S. economic outlook. In February’s Blue Chip Economic Indicators survey of 56 top economists, the consensus forecast for 2012 was that gross domestic product would grow at 2.1 percent in the first quarter (down from 2.8 percent in the fourth quarter of 2011), then edge up to 2.2 percent in the second quarter, 2.4 percent in the third, and 2.6 percent in the fourth. In terms of unemployment, the consensus projection was an 8.4 percent average rate for the first quarter (0.1 percent above January’s rate), then 8.3 percent in the second quarter, 8.2 percent in the third, and 8.1 percent in the fourth.

In my view, if the overall unemployment number is 8.1 percent in the fourth quarter of this year, Obama is very likely to get reelected. Although not at the 7.2 percent level that President Reagan had in November 1984, down from 10.8 percent two years earlier, it would likely be enough to win—albeit, not in the 49-state landslide fashion Reagan enjoyed.

One of the useful aspects of the Blue Chip study is that it averages the 10 most optimistic projections as well as the 10 most pessimistic ones. The optimists project unemployment in the first quarter of this year to stand at 8.2 percent, then to fall successively to 8.1 percent, 7.9 percent, and 7.7 percent in the other three quarters—getting closer to Reagan-land unemployment numbers.

However, the pessimists foresee unemployment rising to and holding at 8.6 percent in the first and second quarters, and standing at 8.5 percent in the third and fourth—much more in jump-ball territory than “advantage Obama.” The difference is that the pessimists are projecting GDP growth to be under 2 percent for the entire year, while the optimists are forecasting growth of 3 percent or higher for the second, third, and fourth quarters. The difference in the economic and the political trajectories would be huge.

We don’t know where the economy is going or what campaign developments will occur. All we know is that things are different than they were four months ago. Obama’s job-approval rating of 47 percent last week is higher than he has had since last summer, but there is no guarantee it will hold for the next month, let alone the next eight. People jumping to conclusions about this race do so at their peril.

Tags: , , , , , , , , , , , ,
read more

White House seeks Treasury savings through streamlining

Filed Under: Insurance News
Feb.13, 2012

The White House proposed saving money through improved efficiency at the Treasury Department in fiscal year 2013 as it introduced a new fee on large financial firms that would compensate Americans for their losses during the financial crisis and discourage future risk taking.

The administration requested $14 billion for Treasury, 2.7 percent less than the fiscal 2012 enacted level of funding but the same level the White House requested last year. But the budget would actually grow by 6.9 percent due to up returns on Internal Revenue Service investments, the budget said.

The administration continued its efforts to improve efficiency within the department. Last year, the White House planned to save $200 million through administrative streamlining and efficiencies such as going paperless. It estimated half that level of savings in fiscal 2013 through administrative efficiencies but introduced new means of streamlining: consolidation of the Bureau of Public Debt and the Financial Management Service and ceasing the overproduction of $1 coins to reduce the cost of producing pennies and nickels.

Treasury also would wind down its Troubled Asset Relief Program, reducing program costs from $40 billion in 2012 to $12 billion in 2013.

The Treasury Department would raise revenue through a $61 billion Financial Crisis Responsibility Fee, which requires the largest financial firms to compensate Americans for the “extraordinary assistance” the country provided to Wall Street. The administration hopes the new fee will discourage future risk-taking.

Tags: , , , , , , , , , , ,
read more

State Department gets mixed review on Keystone pipeline process

Filed Under: Insurance News
Feb.10, 2012

The State Department energy specialists in the eye of the political storm over the proposed Keystone XL pipeline conducted themselves with objectivity as they communicated with the relevant companies and the Canadian government, State’s inspector general said in a report made public Friday.

The IG, however, questioned whether State possesses the requisite technical expertise for approving a major energy project that has become a partisan issue in the debate over the environment and how to create jobs.

State deputy IG Harold Geisel was tasked by lawmakers with evaluating the legality of the communication between State officials and TransCanada (the company hoping to build the pipeline that would stretch 1,700 miles from Canada to the Gulf of Mexico) in selecting the contractor Cardno Entrix to perform the required environmental impact study. Legislators questioned whether TransCanada and some State employees had financial relationships with the contractor and whether State adequately consulted other government entities such as the Environmental Protection Agency.

The IG “found no evidence that TransCanada had improperly influenced the department’s selection of Cardno Entrix as the Keystone XL EIS third-party contractor,” the report said. The final impact statement “generally addressed and incorporated the views and concerns of federal agencies with expertise,” it said.

“However, some concerns, such as the manner in which alternative routes were considered . . . were not completely incorporated. . . and the department’s limited technical resources, expertise and experience impacted the implementation” of the National Environmental Policy Act process.

Geisel recommended that two State bureaus redesign the process for selecting third-party contractors to maximize the department’s control. And he recommended hiring a civil servant with experience in NEPA impact statements.

Sen. Bernie Sanders, I-Vt., who requested the report in November 2011 along with Rep. Steve Cohen, D-Tenn., said in a statement, “the findings confirm once again why the project should not be rubber-stamped for approval, despite efforts by Republicans in Congress to do just that.”

The officers in charge of the review, he added, quoting the report, “had `little or no’ experience with environmental law ‘and had to seek training and learn quickly on the job.’ ”

Elizabeth Heyd, a blogger for the Natural Resources Defense Council, welcomed the report but expressed skepticism toward the process, saying State had “muddied the water” as to who was in charge of gauging potential environmental damage from the project.

“In a procedure that many would liken to the fox guarding the chicken coop, the applicant for a project, in this case, TransCanada, presented the reviewing agency with its choices for contracting out the review,” she wrote. “The IG report explained that that practice has evolved because the applicant pays for the contractor and because this allows reviews to be processed more quickly.”

Asked to comment, Jeff Ostermayer, spokesman for the National Association of Manufacturers, said: “We believe that the Keystone XL project is in the national interest of the country and will create thousands of jobs and provide an affordable source of energy for manufacturers. We are continuing to advocate for the approval of the pipeline.”

Tags: , , , , , , , , , ,
read more

House passes STOCK Act requiring disclosure by federal employees

Filed Under: Insurance News
Feb.09, 2012

The House on Thursday overwhelmingly approved its version of the so-called STOCK Act, which aims primarily at curbing insider trading by lawmakers, but also includes a provision to extend disclosure requirements to thousands of federal employees.

The measure that will affect federal workers differs slightly from a similar provision in the Senate version of the bill. The final details must be worked out in conference. By a 417-2 vote, the House approved the Stop Trading on Congressional Knowledge Act, including language released Wednesday night by Majority Leader Eric Cantor, R-Va., that removed a contentious Senate provision that would have required so-called political intelligence consultants to disclose activities and to register as lobbyists. The bill now will go to a conference committee to resolve differences.

“We added a provision to prohibit members of Congress, executive branch officials and their staffs from receiving special access to initial public offerings due to their positions,” Cantor said in a statement before the vote. “We intend to act quickly to send the president a strengthened, workable bill that delivers on our promise to uphold the trust of the American people.”

The STOCK Act seeks to clarify an ambiguity in the 1934 Securities and Exchange Act by prohibiting members of Congress and their staffs from trading on information they obtain from their work that is not available to the general public. It would require disclosure 30 days after any securities trade of more than $1,000 and would compel all disclosures to be available electronically.

Confusion over how many federal employees would be required to disclose information emerged last week after an amendment from Sen. Richard Shelby, R-Ala., broadened the language to cover thousands more lower level federal employees. Under the 1978 Ethics in Government Act, high-level federal appointees must make their financial disclosures public, while a vaster universe of mid-level employees must disclose confidentially to their agency ethics officer.

The House version would cover only the smaller group of top officials. The staff director for the Senate Homeland Security and Government Affairs Committee on Feb. 6 sent a letter to the Office of Government Ethics seeking clarification on the legislation’s scope. According to a Feb. 8 http://cdn.govexec.com/media/020912cc1.pdf>replyfrom OGE Principal Deputy Director Don Fox, the number of high-level employees who in 2010 made their financial disclosures public was 28,019. The number of mid-level employees who disclosed confidentially was 363,771.

Requiring lawmakers and federal officials for the first time to disclose their stock grades has drawn support from government transparency advocacy groups. But Cantor’s changes, made before House passage, drew the ire of Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, who accused the House of “watering down” the bill.

“Rep. Cantor has opposed the STOCK Act from the start and his bill reflects that,” said Sloan. “The majority leader is talking out of both sides of his mouth. He is trying to take credit for finally responding to an issue that has outraged Americans, while behind closed doors he has taken the side of Wall Street and neutered the tough Senate bill.”

As the bill heads for conference, her group will push for inclusion of the disclosure requirements for political intelligence services and another Senate-only amendment that would give prosecutors new tools to identify, investigate and prosecute criminal conduct by public officials.

Tags: , , , , , , , , , , ,
read more
Powered by WordPress and Motion by 85ideas.