Medicare Official Says He Reacted to Rate Leaks With ‘Extreme Anger’

The former head of the government agency that sets Medicare reimbursement rates told a jury he reacted with “extreme concern and extreme anger” when he learned about leaks of planned changes in payments for cancer radiation treatments in 2012.

“This is a criminal offense,” Jonathan Blum, the former director of the Center for Medicare said in an internal email in October 2012.

Blum testified Tuesday in the insider-trading case in New York against four people including David Blaszczak, a former government health agency official who’s charged with peddling details about government health-spending policy changes while working as a “political intelligence” consultant to hedge funds.

The defendants, including former Centers for Medicare & Medicaid Services employee Christopher Worrall, claim they did nothing wrong in using planned reimbursement-rate changes, citing a Washington culture of information-sharing.

Blum told jurors that government employees were frequently trained not to share confidential material that had the potential to move financial markets.

Prosecutors claim Blaszczak used information from Worrall about government plans to reduce reimbursement rates for a certain kind of cancer treatment and to increase payments for kidney dialysis to tip off partners at Deerfield Management, a New York hedge fund that allegedly used the leak to make $7 million in trading profits.