Four House members got Countrywide VIP loans, lawmaker says

Posted Dec. 19, 2011, at 8:41 p.m.

WASHINGTON — Four current members of the House of Representatives received special VIP loans from Countrywide Financial Corp., according to the chairman of a congressional committee, raising new questions about the extent of the company’s attempts to win favor with Washington policymakers as it built its subprime mortgage business.

The disclosure came in a letter last week from Rep. Darrell Issa, R-Calif., who chairs the House Oversight and Government Reform Committee, informing leaders of the House Ethics Committee about “possible wrongdoing” by lawmakers. Issa did not name the House members who purportedly received the discounted loans. The information surfaced as part of his committee’s ongoing investigation of the Countrywide VIP program.

“Testimony and documents show that Countrywide used the VIP program to build relationships with government officials and others positioned to advance Countrywide’s business interests,” Issa wrote to the Ethics Committee’s chairman, Jo Bonner, R-Ala., and top Democrat, Linda T. Sanchez of California. The VIP loans often had lower interest rates and fees than those available to the public.

A spokesman for the Ethics Committee would not comment on the letter Monday. The committee usually does not talk about specific allegations or referrals until it reaches a finding.

Study: Problems with Medicare contractors persist

MIAMI — Private contractors that are supposed to guard against Medicare fraud paid claims submitted in the names of dead providers or for unnecessary medical treatments, which were among problems estimated to cost more than $1 billion in 2009, according to an inspector general report released Friday.

Federal health officials contract with private companies to process and pay Medicare claims and investigate fraud. The U.S. Department of Health and Human Services inspector general examined how effectively several types of fraud contractors are investigating an estimated annual $60 billion in Medicare fraud.

The report found 62 areas vulnerable to fraud during a 2009 investigation. The most common were related to billing and coding, such as paying a claim even though it had an incorrect code or a provider who billed for an excessive number of services. Another common issue included bills that used the identification numbers of dead providers.

The contractors were asked to estimate how much the problems might cost, but they only accounted for one-third of the issues, which alone were estimated at $1.2 billion, the report showed. It’s unclear why contractors didn’t estimate the full amount.

Federal health officials were notified of the problems, but 77 percent of them remained unresolved nearly two years later, according the U.S. Department of Health and Services inspector general report.

The Centers for Medicare and Medicaid Services stressed that it’s addressing all the issues raised in the report, but said resolving them is complicated. Changes in one part of the system may create problems for other parts of the system that could affect providers. Some problems may also require statutory changes.

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