Issa formally notifies Sebelius of intent to issue subpoena for ObamaCare documents

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Issa threatens to subpoena HHS for Medicare Advantage docs

Doug McKelway reports from Washington, D.C.

Republican Rep. Darrell Issa on Friday formally notified Health Secretary Kathleen Sebelius that he intends to issue a subpoena for health department documents on a program he claims is being used to "buy" the election by hiding the effects of ObamaCare.

The Department of Health and Human Services handed over reams of material just minutes before a 5 p.m. ET deadline Thursday in response to Issa's demand 24 hours earlier. However, Issa's office called the cache "embarrassing," insufficient and not responsive to the congressman's request.

"Basically somebody hit a button and said print out a bunch of spreadsheets in an illegible format," Issa told Fox News. "So we will be issuing the subpoena."

In a letter Friday to Sebelius, he said the material was "not organized in any discernible fashion" and did not include "a single document" in response to several of his panel's specific requests. Issa reiterated that he wants the documentation "because of the highly unusual nature" of the program.

The chairman of the House Oversight and Government Reform Committee effectively is accusing the department of stringing them along for months in their request for documents about an $8 billion program that pays bonuses to Medicare Advantage plans.

Issa claims the bonus program is being used to mask the first round of Medicare Advantage cuts in connection with the health care overhaul -- in order to win favor with seniors.

"It's an unbelievable abuse of power," he said Thursday. Issa said the program basically funds "what ObamaCare took away."

The program in question is called a "demonstration" project. But Issa complains the project is far more sweeping than a run-of-the-mill test program, and conveniently lasts until 2014.

"This is larger than every test they've ever done at HHS combined," Issa said. Issa's committee put out a video Thursday explaining its allegations.

The congressman further says the effects of ObamaCare's $200 billion in Medicare Advantage cuts over the next decade would have been felt starting this week -- if not for the bonus payments. Thanks to them, he wrote in an August letter, the project offsets 71 percent of the cuts this year.

But the department portrayed the program differently.

"The quality bonus payment demo is providing incentives to more (Medicare Advantage) plans to improve care, giving more patients high-quality choices in the program," the department said in a written response to FoxNews.com. "It is consistent with previous demos."

Earlier this year, the Government Accountability Office recommended that the Obama administration kill the bonus payment program -- questioning the legal authority behind the system.

A top official with the GAO also testified in July that he has "never encountered" a demonstration project of this size.

FoxNews.com's Judson Berger and Fox News' Chad Pergram contributed to this report.