The Next Big Obamacare Scandal


244-sebelius-sized_AP-resize-380x300President Barack Obama is doubling down on his Obamacare lies. He is now trying to erase retroactively his point-blank assurance to the American people that “if you like your health-care plan, you will be able to keep your health-care plan, period.” Drawing on his golfing experience, he is insisting on a mulligan as millions of Americans are losing the health insurance policies they have chosen because of Obamacare mandates.

“What we said was you could keep it if it hasn’t changed since the law was passed,” he told Obamacare’s political beneficiaries and contractors this past Monday during a speech they applauded enthusiastically. The “if” clause never appeared in his public statements before now.

Obama did not just “misspeak,” as a recent New York Times editorial tried to characterize his deliberate deception. As confirmed by his own aides cited in aWall Street Journal article last Saturday, policy experts who wanted to include more truthful caveats in the president’s public pronouncements concerning retention of choice of patient insurance plans and doctors were overruled by the political spinmeisters.

Perhaps even more troubling than the Obama lies, however, is the political cronyism that has surfaced in the administration’s choice of the contractor to fix the Obamacare website and a legally indefensible interpretation of the Obamacare law by Health and Human Services Secretary Kathleen Sebelius that can protect this contractor and its insurance company parent, among other firms, from kickback claims.

Anthony Welters, a big donor to and campaign bundler for Obama, as well as a regular White House guest, is the Executive Vice President of the giant insurance company UnitedHealth Group. According to proxy statements filed for the 2012 fiscal year, Mr. Welters made $7,411,084 in total compensation. As part of his duties, he serves as the Chief Executive Officer and President of AmeriChoice Corporation, which he had led when the privately held Medicaid services provider was sold to UnitedHealth Group in 2002. As discussed below, AmeriChoice and its predecessor company under Welters’ leadership has had its share of legal challenges.

Welters and his wife have bundled hundreds of thousands of dollars of contributions for Obama’s campaign coffers and inauguration festivities, as well as making their own large donations to Obama and other Democrats. His company UnitedHealth Group spent millions of dollars lobbying for Obamacare. All these investments are paying off big-time.

United Health Group owns the software company that built a critical component of the Obamacare website, and which has now been called in to serve as the new general contractor in charge of fixing the beleaguered site. The UnitedHealth Group subsidiary, Quality Software Services Inc. (QSSI), has already been paid an estimated $150 million, with millions more to come as it bills the taxpayers for remedial and general contractor services.

Concerned about a potential conflict of interest arising from the corporate affiliation of QSSI and UnitedHealth Group, Chairman of the House Committee on Energy and Commerce Fred Upton, R-Michigan, and Sen. Charles Grassley, R-Iowa, ranking member on the  Senate Judiciary Committee, wrote to UnitedHealth Group CEO Stephen J. Hemsley that QSSI’s role in finalizing technical and system requirements to develop and deliver plan management services, including certifying health plans and monitoring compliance “creates a situation whereby the exchange’s ultimate designer, QSSI, is in a position to tailor the system to favor the interests of its parent company, UnitedHealth Group, and further maintain a monopoly over information that is unavailable to competitors, potentially allowing such information to be exploited as invaluable market intelligence and used to gain an unfair advantage over competitors.”

Mr. Welters, UnitedHealth Group’s well-paid Executive Vice President and big Obama benefactor, has faced questions of his own during the course of his previous involvement in providing health insurance for the poor before he joined UnitedHealth Group. Here is what the Washington Post reported in an article about Mr. Welters in 2002, the year that one of his companies – AmeriChoice – was sold to UnitedHealth Group:

“Federal and state audits concluded in the early and mid-1990s that ineffective oversight by Pennsylvania officials had enabled Welters and his partners to make too much money from their taxpayer-supported business.

The audits said the Welters group had paid itself millions of dollars in management fees — paid to other companies they controlled — and millions more in bonuses.”

That’s not all. In New York, the Washington Post reported, Welters’ HMO, known then as Managed Healthcare Systems (MHS), came under investigation regarding clinics that MHS retained to serve Medicaid patients. Then New York State Attorney General Eliot Spitzer announced in May 2000 that state investigators concluded the clinics were inadequately staffed. Patients, he was quoted as saying, were “consistently complaining that they were having difficulty getting services or being seen by a doctor.”

Welters’ HMO ended up agreeing to repay more than $2 million to the Medicaid program for services that its clinics reportedly never provided.

MHS, which operated in New York and New Jersey, changed its name to AmeriChoice, now a business segment of UnitedHealth Group. In 2011, the United States Court of Appeals for the Third Circuit allowed a claim to go forward alleging that AmeriChoice-NJ illegally provided kickbacks in violation of the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, to a New Jersey medical clinic to induce the clinic to switch its patients to AmeriChoice-NJ‟s Medicare and Medicaid programs (United States Ex Rel. Charles Wilkins; Daryl Willis, V. United Health Group, Incorporated; Americhoice; Americhoice Of New Jersey, Inc., 659 F.3d 295 (3rd Cir. 2011)).

The appeals court’s opinion quoted Justice Oliver Wendell Holmes: “Men must turn square corners when they deal with the Government.” The court said its conclusion was consistent with Congress’s intent to “reach all fraudulent attempts to cause the Government to pay out sums of money or to deliver property or services.”

This is where Health and Human Services Kathleen Sebelius comes in. She is not following Congress’s intent, as the federal appellate court described it, “to reach all fraudulent attempts to cause the Government to pay out sums of money.” To the contrary, the Health and Human Services Secretary has just rendered an interpretation of the Obamacare law that exempts the federal insurance exchange and the federal subsidies paid to the insurance companies on behalf of qualified people from the very anti-kickback law which AmeriChoice, run by Obama’s political donor Welters, is alleged to have violated. Sebelius’s rationale, which stretches credulity beyond the breaking point, is that neither the federal or state exchanges, built with taxpayer dollars, nor the subsidies, are “federal health programs,” to which the anti-kickback law applies. As reported by the New York Times on November 5th, Sebelius revealed this odd interpretation in a letter to Representative Jim McDermott, Democrat of Washington.

The New York Times article critiqued Ms. Sebelius’s conclusion, for which she gave no rationale and which followed what the Times described as a “spirited debate within the administration”:

“Lawyers and law enforcement officials said Ms. Sebelius’s decision was unexpected because the insurance exchanges and subsidy payments appeared to fit the definition of federal health care programs in the anti-kickback statute.

Generally, the law makes it a crime to pay or receive anything of value in return for the referral of patients or as an inducement for people to buy goods and services reimbursed by federal health care programs. Such programs are defined broadly as ‘any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States government.’”

A persuasive case can be made that Secretary Sebelius’s legally indefensible interpretation was a gift to Obama benefactor Welters and his employer UnitedHealth Group, including the subsidiary AmeriChoice which has found itself entangled in anti-kickback litigation and would undoubtedly want to avoid any further challenges in connection with Obamacare couple that with the Obama administration’s choice of another UnitedHealth Group subsidiary, Quality Software Services Inc., despite obvious conflict-of-interest concerns. The UnitedHealth Group software affiliate will be fattening its wallet further with a lucrative general contractor gig to fix the Obamacare website that it was involved with building in the first place.

In short, we have the makings of perhaps the biggest scandal yet among several that are fatally infecting Obamacare.

Don’t miss this week’s Glazov Gang, which exposes ObamaCare’s Dirty Little Secret.

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  • truebearing

    This is an immense scandal….but too complicated for the average American to follow. That, and the media’s penchant for ignoring corruption, should result in yet another scam going unpunished.

    Should we be surprised? The moron voters of Virginia just elected a proven Clinton crook. New York just elected a proven communist. There is growing proof that America is listing badly, the captain is trying to sink the ship, while the idiot passengers are still dancing.

  • American1969

    And the hits just keep on coming…

  • ussjimmycarter

    If you are in the IT Community in Minneapolis, you are keenly aware of UHG’s inability to “get it right” when it comes to IT Projects. Their corporate culture makes it the worst of places to work. I have done two assignments there as a consultant (IT) Project Manager and will never return!

  • cedars rebellion

    Virginia elections show Hillary was right “what difference will it make?” The answer is not much. To win wars, one needs not only a strategy but resolve and generals willing to execute the strategy.

    2014? Dream on. The Dems will, against all odds, sweep the GOP out of the House and retain the Senate. Why? Because the GOP is hell-bent on destroying the Tea Party.

  • pupsncats

    The entire federal government is a taxpayer funded Mafioso.

    • zoomie

      read ” Extortion ” by Peter Schweizer for the 35 pages of foot noted details

      Everyone should read this book.

      • pupsncats

        I agree. Everyone should also read all of Andrew C. McCarthy’s books. And David Horowitz’s books.

    • defcon 4

      That’s a very unfair position to take. After all, I’m sure billions of islam0fascist petrodollars pour into the offshore bank accounts held by our “elected” representatives.

      • Boogie’s Daddy

        “What we said was…er…A measurable portion of the federal government Mafioso is funded in large part but not exclusively by taxpayers….and Islamofascists, some of which may or may not be taxpayers. We won’t have the actual numbers until mid-November 2016″

      • pupsncats

        You are absolutely correct. Can’t ignore the Saudi’s and the Muslim Brotherhood operatives in the Obama’s administration and many Chinese and world-wide Communists as well.

        • catherineinpvb

          What is utterly amazing; is how our Repub Leadership ignores the Muslim Brotherhood operating now; with full ‘security clearance’; in our highest; most critical eschelons of Government – thanks to co-conspirator(s); Obama;.and Obama, Inc.

          Why have a Military to defend America; when our ‘elite’ Leadership at home; is feeding the ‘Trojan Horse’ because to not do so; is politically incorrect – and inconvenient. . . Why ‘defend’ America; when Muslim Brotherhood, Mohamed Elibiary – Homeland Security Advisor – has just announced that America is now; a Muslim Nation, with – save a tweak or two – a ‘sharia compliant’ Constitution.

          Does our Leadership ever access FPM to ‘get a clue’; much less; go anywhere on ‘web’; to find the ‘rest of the story’? Do they even realize ;’we do’?)

          While we ‘watch. . .wait’; for Iran to become full ‘destructive’ power; why is our ‘Leadership’ watching our Country self-destruct? More to point; what Leadership; is doing anything to stop it.

          • pupsncats

            They don’t want to defend America! Obama, the left and the RINO’s are all working together to destroy this country. The left doesn’t want a military that has the skills, knowledge and tools to destroy an enemy but rather a club for sexual perverts to sponge off the federal income tax payers. The only reason the RINO’s support the military is their campaign donors make a lot of money with DOD contracts and after their retirement from screwing the people, they get cushy, well paying jobs or earn huge consultant fees in those companies.

    • catherineinpvb

      Vote ‘third-world’ in. . .get ‘third-world’ Governance out.

  • T-Rex

    The Republicans should create and display, on the floor of Congress, a chart showing all the players and their inside connections in this debacle. It should name corporations, subsidiaries, individuals, contributions and connections to the “government officials” responsible for passing and implementing the ACA.

    • http://eacafe.blogspot.com/ para_bellum

      If they did that, they might actually win an election, so obviously they won’t.

  • LawReader

    This administration has proven to be the most incompetent, dishonest crew in American history

    If I had to guess, the reason Obama won’t sign up personally for his signature fiasco – is his absolute lack of *actual* Federal identification documents.

  • PowertodaPeople1848

    “Obamacare” is little better than the current predatory capitalist health care system in the United States. True health care reform means a universal, one-payer system, where everyone is afforded the same level of coverage regardless of socioeconomic status or race. The socialist alternative is the only option that recognizes the right to life for all people (despite the continued bellyaching of the Christian right about how much they value “life”).

    • Mister Lackey

      EXCUSE ME?! You “confused” fascism as capitalism. There’s nothing “capitalist” about a general government takeover of an entire industry!

      So damn tired of the socialists deriding capitalism as the problem, when it’s actually corporatism, fascism — all manner of socialism — that has been and will continue to be the Pandora’s Box and curse on this nation.

    • Drakken

      No matter how many times you goddamn commi’s try communism, it always ends up with stacks of dead bodies, so your going to have to forgive me because I sure as hell am not going to go along with your pogram. As for me a being a Christian that turns the other cheek? Not bloody hardly.

    • http://eacafe.blogspot.com/ para_bellum

      How did that work out for the French Revolution, National Socialism, the Soviet Union, Cuba, North Korea, etc.? It’s sort of worked in a few affluent and ethnically homogenous parts of Europe for one generation, but that is starting to fall apart, just like all the other socialist experiments did. (Look at Greece.)

      Christianity calls for voluntary cooperation and charity, not total state control.

    • SFLBIB

      “True health care reform means a universal, one-payer system, where everyone is afforded the same level of coverage…”

      “When incomes ["income" = health care in this case] are equalized, they will be equalized at a low level.” — Economist Vilfredo Pareto

    • James Edward

      Your mention of ” the right to life for all people” is disingenuous. The champions of socialized medicine advocate euthanasia through the withholding of care to the elderly and “terminal” plus abortion on demand.
      I guess those people don’t count.

      Your utopian dream of “a universal, one-payer system, where everyone is afforded the same level of coverage regardless of socioeconomic status or race” is a joke on its face. The moneyed and privileged in society will always have access to things that other society members do not, including medical care.
      Even your screen name is a farce and is diametrically opposed to your statements.

  • A Z

    “if you like your health-care plan, you will be able to keep your health-care plan, period.”

    Period in typical colloquial, everyday speech means that there are no caveats, small print, parsing or lawyer talk.

    Now Obama and the Democrat leadership are telling us variously he did not lie, we are too stupid to know what is good for us or we meant if you plan does not change, but plans change in small details all the time and the Democrats know this.

    Maybe some people will wake up and it will make a difference in 2014 and 2016.
    I would not care about the low information voter and the greedy Santa Claus voters except at time they take us with them when they scheme at the ballot box.

  • James Edward

    Is it time to rearrange the chairs on deck yet? ;) sarc

    • Gary Dickson

      Already done.

      The band is now playing “Nearer, my God, to Thee”.

  • catherineinpvb

    The Repubs are ‘way too discreet in their dealings with Obama. Had ‘shoe been on other foot’. . .as soon as that letter was sent – in this ‘other shoe’ case, by Dem to Repub Prez – at the end of that day; that Democrat would be holding court in Congressional Hall; in front of Media camera; explaining to ‘public’; now; twitter; et al; the criminal MO’s of Repub President’s rotten Gov. cronyism, etc. that he had just addressed, by letter to President.

    Obama, Inc. fully aware of advantages of ‘overwhelming the system’. . .this MO; is simply overwhelming the system with criminality; until; like a sieve; it is impossible to address coherently or meaningfully; much less; ‘at all’ by their own; like-minded Leftist; lamestream Media.

  • Randy Townsend

    Nothing will come of this. A President more than willing to break the law, an administration staffed by amoral parasites, coupled with a press that intentionally looks the other way, good luck with anything remotely resembling justice. The next time the MSM criticizes a Republican for doing anything, the Obama experience should be shoved in their faces.

  • Brucew56

    The country is getting what it is allowing to happen. Lies from the Liar in Chief and the MSM and low information voters are killing America.

  • barry soetoro

    What’s the big deal?

    As Communist takeovers go, this one’s a real party.

  • Aaron Tardibouno

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  • carlyle_ny

    It’s exactly what Americans deserve. Just sit home and keep watching TV while your government grows more and corrupt. And now that the Super Bore is coming up—make sure you cheer for your favorite team!