Timing of political intelligence probed A small Washington-based firm called Height Securities alerted its clients on April 1 that the government would soon make a decision favoring private health insurers that participate in a Medicare program. The alert went out just before the trading day ended, sparking a surge of trading in shares of Humana, Aetna and other major health-care firms. The Obama administration made its decision public after the markets closed that day, and federal investigators along with Sen. Charles E. Grassley (R-Iowa) are looking into whether there was a leak. Grassley is also examining the activities of another Washington firm, Capitol Street, that sent out a bulletin to its clients in late March about a government report that suggested that private insurers participating in Medicare could soon see good news. Capitol Street, which describes itself as a health-care policy consulting firm, hosted a March 18 investor conference call with Stephanie Carlton, who was a point person on Medicare issues for Republicans on the Senate Finance Committee at the time. In a recording obtained by The Washington Post, Carlton shared her views with an unknown number of participants in the conference call. She used technical terms to describe a range of possible responses by the administration. But her views on some topics that came up in the 30-minute call did not accurately predict the decision unveiled by the administration April 1. Carlton said on the call she was "hopeful" that the administration would reach a decision favorable to the industry, "but I would put that as the lowest on my optimism score," she said. Later in the month, Carlton was involved in e-mail exchanges with Justin Simon, the analyst at Height Securities who sent out the April 1 alert. In a March 27 e-mail, Simon congratulates Carlton for a "good job" on a key report requested by her boss at the time, Sen. Orrin G. Hatch (R-Utah). The report helped make the case for a Medicare rate increase for private insurers. "Shorts getting squeezed," Simon wrote, referring to traders who were betting against a rise in the rates. In another e-mail later that day, Simon bets Carlton coffee on what the direction the rates will ultimately go and the magnitude. But she declines the bet. "Ha, I can't do that," she responds two minutes later. Carlton, who left for a private-sector job this week, could not be reached for comment. Senate and "stakeholders" Antonia Ferrier, a spokeswoman for Hatch, said the senator is aware that his staff participates in such events and that communicating with these types of groups is not unusual given the technical nature of the issues the committee handles.