Medicare Law Prompts a Rush for Lobbyists
(New York
Times)
Almost every week the federal government issues new rules
or guidelines to carry out the 2003 law, which provides a drug benefit starting
in January. To keep track of the new rules and to decipher their meaning is a
full-time job for hundreds of lawyers and lobbyists, who regularly seek changes
advantageous to their clients.
With hundreds of billions of dollars at stake, health care
providers, insurers, drug makers and pharmacies are continually trying to
influence rules for the drug benefit and other initiatives authorized by the
law.
"You see a real surge in health care lobbying because
that's where the money is," said Frederick H. Graefe,
a lobbyist for hospitals and makers of medical equipment. "Twenty years
ago the defense industry was dominant and had the most lobbyists, the big
players. Now it's health care."
Last year alone, the health care industry spent $325
million - more than any other sector - in its efforts to influence Congress and
federal agencies, according to Political Money Line, a nonpartisan group that
studies reports filed with Congress by lobbyists and their clients.
Drug companies led the way. They reported spending $86.9
million on lobbying last year, followed by hospitals with $55 million and
doctors with $35.4 million.
Lobbying Congress nowadays often means persuading lawmakers
to make telephone calls to Bush administration officials on behalf of clients
concerned about specific issues, like the Medicare payment for a drug or a
medical device.
The pinpoint focus of much lobbying is illustrated by the
case of Lexapro, an antidepressant made by Forest
Laboratories. The Bush administration has said that Medicare drug plans must
cover "substantially all" antidepressants, but not necessarily Lexapro, a drug widely prescribed for depression and
anxiety among older adults. Claudia Schlosberg, a lawyer with Blank Rome who
represents Forest Laboratories, has been pressing Medicare officials to reverse
that decision and has obtained letters from several members of Congress
supporting the company's position in favor of covering Lexapro.
"Every health care interest has a voice on Capitol
Hill," said Elizabeth J. Fowler, a lawyer who recently left the Democratic
staff of the Senate Finance Committee to join a consulting firm. "What you
lose in the process is consumer and beneficiary voices. We heard a lot more
from industry interests than from beneficiaries."
Chris Jennings, who became a lobbyist after serving as
health policy coordinator for President Bill Clinton, said: "The
proliferation of health care lobbyists produces specialization. The broader
good is often lost as people focus on next year's Medicare reimbursement rate
for a specific group of health care providers, or a regulation to be issued
next month."
The health care industry is subject to pervasive federal
regulation, and the government sets prices for many goods and services provided
to the elderly under Medicare. But the Bush administration and the Republican
majority in Congress are receptive to advice from the industry, including
private insurers who will deliver the drug benefit.
"The success of the new Medicare law depends on a
robust partnership between government and the private sector," said Stacey
Hughes, a partner in the lobbying firm established by former Senator Don Nickles, Republican of Oklahoma.
Health policy experts and officials said the growth of
health care lobbying reflected several trends:
¶Congress earmarks more and more money each year for
specific hospitals, medical schools and health care projects. Health care
providers and local officials have a better chance to obtain such largess if
they retain lobbyists to plump for their projects on Capitol Hill.
¶Lobbying has become more substantive. To buttress their
arguments, lobbyists need data, cost estimates and economic analyses of health
policy proposals. They retain expert consultants to prepare such reports.
¶Lobbyists have adopted many techniques of political
campaigns. They hire pollsters and buy advertising to sway public opinion and
pressure Congress.
¶Many lobbyists have carved a niche for themselves by
focusing on one party, one house of Congress, one Congressional committee or a
handful of influential lawmakers.
Carol A. McDaid, a health care
lobbyist at Capitol Decisions, a subsidiary of the Van Scoyoc
Companies, said, "It's become so sophisticated that, in preparation for a
critical vote, a big health care or pharmaceutical company will hire a
different firm to lobby each key member of an important committee, like the
Ways and Means Committee."
The Pharmaceutical Research and Manufacturers of America
reported spending $15.5 million on lobbying last year, while two of its
members, Pfizer and Bristol-Myers Squibb, spent $5.6 million apiece and Johnson
& Johnson spent $4.5 million.
Other heavyweight lobbies included the American Medical
Association, which spent $18.5 million last year, and America's Health
Insurance Plans, which spent $5.6 million, about the same amount as the Blue
Cross and Blue Shield Association.
By contrast, AARP, the lobby for older Americans, spent $8
million. The American Cancer Society spent $2.6 million, the American Heart
Association spent $1 million and Families USA, the liberal group that calls
itself a voice for health care consumers, reported spending $40,000.
Alan B. Mertz, president of the American Clinical
Laboratory Association, said the advocacy budget for his group had more than
tripled, to $2.5 million this year from $750,000 in 2002. "We had to beef
up our advocacy to deal with threats to our Medicare reimbursement," Mr.
Mertz said, noting that Medicare payments for laboratory tests had been frozen
through 2008.
Lobbyists said it made sense for their clients to pour
money into lobbying because so much money was at stake. Health care accounts
for more than 15 percent of the nation's economy, and private insurers often
look to Medicare as a guide in deciding what services to cover and how much to
pay.
Moreover, the federal role is growing. Medicare and
Medicaid will account for 37 percent of all spending on prescription drugs next
year, up from 20 percent this year, said Stephen Heffler,
an economist at the federal Centers for Medicare and Medicaid Services.
The Bush administration and the Congressional Budget Office
say Medicare will spend more than $1 trillion on prescription drugs in the next
10 years, with outlays topping $100 billion a year after 2009.
Two linguistic changes show how health care lobbyists have
emerged as a potent force. Lobbyists and trade associations, once seen as
special interests, are now called "stakeholders," with a legitimate
claim to be heard in the policy-making process.
"Expanding coverage" used to mean providing
health insurance to people who had none. But lobbyists now use the term in a
different sense. When they speak of "coverage expansions," they mean
that Medicare should cover, or pay for, new technology like PET scans,
implantable defibrillators and drug-coated stents to
treat clogged arteries.
Political campaign contributions are frequently coordinated
with lobbying campaigns. Lobbyists often hold fund-raisers at the request of
members of Congress, as allowed by campaign finance laws. They are expected to
contribute money from their own pockets and to raise money from clients.
"You increase your influence and access by doing
fund-raisers," said James C. Pyles, a lawyer and
lobbyist for psychoanalysts and home care agencies. "If you're not on the
donor list, you don't have much access."
Ms. McDaid, who lobbies for
hospitals and ambulance companies, said: "In the old days, the requests
for political giving went mainly to your clients' political action committees.
Now health care lobbyists have to tithe personally. The bigger your client
base, the more pressure there is to give. It's not unusual for a lobbyist at a
big firm to give $25,000 to $50,000 in personal contributions to Congressional
candidates in a two-year election cycle."
The growing prominence of health care issues on the
national agenda has created an unquenchable demand for lobbyists. New issues
include bioterrorism, stem cells, health information technology, the privacy of medical records, television advertising of
prescription drugs and the importing of drugs from
Republicans are in demand at lobbying firms and trade
associations, but so are knowledgeable Democrats.
John E. McManus, who formed his own lobbying firm after
working for Republican members of the
On the other side of the political spectrum, David H. Nexon, a health policy adviser to Senator Edward M. Kennedy
for more than two decades, stepped down in February to become senior executive
vice president of the Advanced Medical Technology Association, the lobby for
makers of medical devices like Medtronic and Guidant.
Charles M. Brain, director of legislative affairs for
President Clinton, reported that he got $240,000 last year for representing the
Pharmaceutical Research and Manufacturers of America. Stephen J. Ricchetti, deputy chief of staff in the Clinton White
House, lobbies for Eli Lilly & Company, Novartis
and Pfizer.
Richard J. Pollack, executive vice president of the
American Hospital Association, said health lobbying had become more partisan.
"We hire Republicans to lobby Republican members of
Congress and Democrats to work Democratic offices," Mr. Pollack said.
The Generic Pharmaceutical Association has retained Mr.
Jennings and Mark W. Isakowitz to lobby for
legislation to increase the use of generic drugs. As a White House aide, Mr.
Jennings helped devise the
As the costs of Medicare and Medicaid soar, federal
prosecutors and members of Congress are investigating fraud and abuse with new
zeal. Many health care companies find they need more lawyers and lobbyists to
cope.
In a recent advertisement recruiting lawyers for its
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