SUBCOMMITTEE OF THE GOVERNMENT OPERATIONS HOUSE OF REPRESENTATIVES ONE HUNDREDTH CONGRESS FIRST SESSION DECEMBER 15, 1987 Printed for the use of the Committee on Government Operations For sale by the Superintendent of Documents, Congressional Sales Office COMMITTEE ON GOVERNMENT OPERATIONS JACK BROOKS, Texas, Chairman JOHN CONYERS, JR., Michigan STEPHEN L. NEAL, North Carolina ROBERT E. WISE, JR., West Virginia BEN ERDREICH, Alabama GERALD D. KLECZKA, Wisconsin MATTHEW G. MARTINEZ, California LOUISE M. SLAUGHTER, New York BILL GRANT, Florida NANCY PELOSI, California FRANK HORTON, New York HOWARD C. NIELSON, Utah JOSEPH J. DIOGUARDI, New York JIM LIGHTFOOT, Iowa BEAU BOULTER, Texas DONALD E. “BUZ” LUKENS, Ohio JAMES M. INHOFE, Oklahoma CONTENTS Hearing held on December 15, 1987.............. Fowler, Wayne A., former Director, Office of Health Maintenance Organi- zations, Department of Health and Human Services, and former vice president, International Medical Centers..... Goulet, Arthur W., former qualifications officer, Office of Health Mainte- nance Organizations, U.S. Public Health Service, Department of Health and Human Services, and former associate executive director, Interna- Haddow, C. McClain, former Chief of Staff, Department of Health and Kusserow, Richard P., inspector general, Department of Health and Human Services, accompanied by George Reeb, Director, Health Care Audits, and Michael Cesario, senior inspector for HCFA programs Moley, Kevin E., Director, Office of Prepaid Health Care, Health Care Williams, David C., Director, Office of Special Investigations, U.S. Gener- al Accounting Office, accompanied by Alex Falcon, supervisory special agent, and Dana Bedwell, special agent... Letters, statements, etc., submitted for the record by: Fowler, Wayne A., former Director, Office of Health Maintenance Organi- zations, Department of Health and Human Services, and former vice president, International Medical Centers: December 16, 1985, letter to Mr. Miguel Recarey, Jr., president, IMC Page 116 145 1 Goulet, Arthur W., former qualifications officer, Office of Health Mainte- 180-198 The Recarey Organization (mid-1986). 28 Moley, Kevin E., Director, Office of Prepaid Health Care, Health Care Financing Administration, Department of Health and Human Services: Prussin, Jeffrey A., president, Health Systems Development Corp., Coral Gables, FL., former staff, Department of Health and Human Services, and former executive, International Medical Centers: Prepared state- (III) MEDICARE HEALTH MAINTENANCE TUESDAY, DECEMBER 15, 1987 HOUSE OF REPRESENTATIVES, HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS, Washington, DC. The subcommittee met, pursuant to notice, at 9:30 a.m., in room 2247, Rayburn House Office Building, Hon. Ted Weiss (chairman of the subcommittee) presiding. Present: Representatives Ted Weiss, Thomas C. Sawyer, Nancy Pelosi, Jim Lightfoot, and Christopher Shays. Also present: James R. Gottlieb, staff director; Marc Smolonsky, professional staff member; Pamela H. Welch, clerk; and Mary Vihstadt, minority professional staff, Committee on Government Operations. OPENING STATEMENT OF CHAIRMAN WEISS Mr. WEISS. Good morning. The Subcommittee on Human Resources and Intergovernmental Relations is now in session. We will have other members of the subcommittee joining us as the day goes along, and then some will be leaving us as business on the floor becomes activated. Mr. Lightfoot, the ranking member, will be here with us shortly. We are pleased to note the presence of Ms. Pelosi. Before we go on to the business of the day, let me just update the record on some recent and current business of the subcommittee. On November 18, the subcommittee voted the issuance of two subpoenas, one to the Office of Management and Budget and the other to the Department of Health and Human Services. I am pleased to note that the subpoena to OMB did not have to be served and that in fact the records were delivered before service was necessitated. The subpoena to the Secretary of the Department of Health and Human Services was served on December 8, and this morning we received the material that was subpoenaed. We should note for the record that the Secretary, as well as a number of other important people in the administration, yesterday issued a statement indicating their objection to the subpoena and the issuance of the subpoena and the delivery of the records pursuant thereto. But they said that they feel they have to abide by the law, and I respect their commitment to that. Congress clearly has |