Medicare Revolving Door Fuels Congress Debate Over Ethics Rules By Jonathan D. Salant
Jan. 30 (Bloomberg) -- Fifteen lawmakers, congressional aides and Bush administration officials who pushed through the costliest Medicare overhaul in history began working for the health-care industry within a year of the measure's passage.
As Congress considers new rules to restrict lobbying because of the Jack Abramoff scandal, some lawmakers are citing that parade of public officials into the health-care industry as a case study for why the laws need to be tightened.
``That is a scandal, no question about it,'' Senator Richard Durbin, an Illinois Democrat, said in an interview. ``It says they were very closely connected with an industry they rewarded very handsomely.'' Durbin raised the issue at a Jan. 25 Senate hearing on lobbying.
Among the measures lawmakers have proposed is a rule that would double to two years the amount of time former public officials must wait before lobbying their old colleagues.
Congress voted in November 2003 to provide prescription-drug benefits to the 43 million elderly and disabled Americans eligible for the Medicare federal insurance program. In addition, 6.4 million low-income elderly who have received prescription medication under the state-run Medicaid program are to be shifted to the new drug plan, which will cost more than $1 trillion over the first 10 years.
The new drug program is administered by private insurance companies, and the government is prohibited from seeking lower prices through volume discounts, a potential boon for drugmakers.
Democrats Outraged
The prescription-drug law was born in controversy. House Republican leaders kept the roll call open almost three hours to insure passage of the legislation, outraging many Democrats. The next year, then-Majority Leader Tom DeLay was rebuked by the House ethics committee for offering to endorse the candidacy of Michigan Representative Nick Smith's son, who was running for his father's seat, if Smith voted for the measure.
A review of lobbying records and company Web sites shows that nine of the 15 lawmakers, aides and administration officials who left the government to work in health care registered to lobby on the implementation of the law. These include former Medicare administrator Thomas Scully.
Scully's law firm, Atlanta-based Alston & Bird LLP -- which also employs former Senate majority leaders Robert Dole and Tom Daschle -- received $1 million between January 2004 and June 2005 from clients to lobby on the implementation of the plan.
More Lobbyists
Besides Scully, Alston & Bird brought in Timothy Trysla, a former senior policy adviser at the Centers for Medicare and Medicaid Services; and two former Senate Finance Committee aides, counsel Colin Roskey and health-policy adviser Jennifer Bell. Trysla, Roskey and Bell are also registered to lobby on the Medicare bill, disclosure reports show.
Scully, who received a waiver from Health and Human Services Secretary Tommy Thompson to look for private employment while working on the Medicare legislation, said he doesn't lobby on the new law and spends most of his time working for the New York private-equity firm of Welsh, Carson, Anderson & Stowe.
He said he was listed as a lobbyist on the disclosure forms ``to make sure we're complying with the law.''
Frank Conner III, a partner in the Washington office of Alston & Bird, said the officials and congressional staff members were ready to move on after the drug law was enacted. ``We wanted to build a big health-care policy practice,'' said Conner. ``We were able to attract some very talented folks upon the conclusion of the Medicare prescription-drug legislation.''
Tauzin
Former House Energy and Commerce Committee Chairman Billy Tauzin, a Louisiana Republican, became president of the Pharmaceutical Research and Manufacturers of America, the drug industry's Washington-based trade group known as PhRMA. Tauzin's chief spokesman, Ken Johnson, joined him there.
Tauzin's deputy staff director and chief health counsel, Patrick Morrisey, went to work for Sidley Austin LLP as a lawyer and a partner. He helped negotiate the legislation, according to the Chicago-based law firm's Web site.
One of PhRMA's lobbyists on the drug law is the McManus Group. It was formed by John McManus, former staff director of the House Ways & Means health subcommittee and the lead staff negotiator for the House Republicans on the Medicare law.
PhRMA also hired Michelle Easton, legislative director to former Senator John Breaux of Louisiana, one of two Democrats who were part of the final negotiations on the prescription-drug legislation. Last month, she returned to the Senate to head the Democratic health team on the Finance Committee under Senator Max Baucus of Montana, the other Democratic negotiator.
Family Time
McManus said he didn't negotiate job offers while working in Congress. ``The major reason I left was because I was never seeing my family,'' he said. ``I had helped Congress conclude what we had been working on for six years.''
PhRMA spokesman Johnson said Tauzin, was also not in contact with the industry group about any possible jobs during the discussions over the Medicare legislation.
``There were never any overtures while the bill was being negotiated,'' Johnson said. ``It wasn't until Billy survived cancer thanks to a miracle drug that he decided to become a patient-advocate as head of the Pharmaceutical Research and Manufacturers of America. No amount of spin from the critics can change the facts.''
Morrisey, Tauzin's former chief health counsel, said lawmakers need to interact with all kinds of groups, from industries to patient advocates, in formulating policy.
``The best way to develop thoughtful legislation is to listen to experts' perspectives from a variety of different backgrounds and always take patients' and taxpayers' interests into account,'' Morrisey said.
Rough Start
So far, the prescription-drug plan, which began Jan. 1, hasn't gone smoothly. To date, 24 million people have signed up for the program, according to the Department of Health and Human Services. Many states have agreed to pay for the drugs for now because low-income seniors said they are unable to get coverage.
Though the Bush administration estimated the plan would cost $400 billion over 10 years, Medicare's chief actuary, Richard Foster, later said he was threatened with dismissal if he told lawmakers of his own estimate: that the program would cost $600 billion over the first 10 years.
In 2005, the administration released a new 10-year estimate for the program, putting the cost at $1.2 trillion.