Employees of the federal agency that oversees Medicare and the federal health exchange website are the focus of three Securities and Exchange Commission (SEC) investigations to determine whether they leaked news about pending health policy decisions that would up in the hands of Wall Street traders.

According to The Wall Street Journal, nearly a dozen officials at the Centers for Medicare and Medicaid Services (CMS) have spoken to investigators, with some receiving immunity in exchange for their information. 

The Jounal reported that one of the probes is centered on a CMS decision in June 2010 to set coverage limits on a prostate cancer drug made by Dendreon Corp. Official documents and people close to the investigation say that the official in charge of making the decision emailed three colleagues telling them to keep the news secret until a formal announcement could be made. However, investigators say Dendreon shares had dropped 10 percent by the end of the day when the decision was made. By the end of that June, Dendreon's stock price had dropped 26 percent from the start of the month. 

The investigation is also focusing on at least three policy and research firms that may have acted as middlemen for the inside information. The Journal reports that a second investigation, which involves the FBI in addition to the SEC, is focused on whether a firm called Height Securities LLC was informed ahead of schedule about a pending increase in funding for health insurance firms in April 2013. 

One of the firms in question, and the focus of the third investigation, is run by a former CMS employee, David Blaszczak, who has denied using any inside information in preparing reports about what medical products will be paid for under Medicare. 

Late Tuesday, CMS released a statement saying, "[E]mployees undergo regular training on how to appropriately handle this type of sensitive information. We have and will continue to cooperate fully with law enforcement."

The Journal reports that to prove insider trading, prosecutors will have to show that CMS officials relayed non-public, market-moving information to a Wall Street representative in violation of a duty to confidentiality. 

CMS officials have gone on the record to defend the importance of keeping the public informed about medical decisions, which may make it difficult to pursue a federal case. The Journal cites a letter written by current CMS administrator Marilyn Tavenner to Sen. Charles Grassley, R-Iowa, defending a meeting between agency officials and Wall Street-based clients to discuss reimbursement for a company that makes medical devices.

"We believe that CMS has an obligation to provide information to the public about the programs that the agency administers and to answer questions about our policies and the impact of our policies on beneficiaries, providers and stakeholders," Tavenner wrote, according to the Journal. 

Fox News' Jim Angle contributed to this report. 

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