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Wednesday, August 4, 1999

Pressing for Cash

  • Main Series Page: Troubled Times in Nursing Homes

    By Thomas J. Cole
    Journal Investigative Reporter
    WASHINGTON -- As chairman of the Republican National Committee, Haley Barbour supported efforts to slow growth in Medicare spending. And Congress and the Clinton administration did just that in the Balanced Budget Act of 1997.
    Now, as a lobbyist for a consortium of nursing-home companies, Barbour advocates that billions of dollars more be pumped into Medicare reimbursements for the industry.
    "There is no contradiction," Barbour said when asked about his work for the nursing-home industry and his past support of efforts to stem the rise in Medicare expenditures.
    Congress and the Clinton administration have gone too far in cutting Medicare payments for nursing homes, threatening the industry's financial health, he said.
    "It's a level of spending that will not support what has to be done to provide appropriate and adequate care," Barbour said.
    The cut in Medicare payments to nursing homes followed several years of double-digit growth in such payments. The government hoped to make the industry more efficient and to reduce Medicare abuse.
    The hiring of Barbour is part of a massive lobbying and public-relations effort by the nursing-home industry to get more Medicare dollars -- an effort that also includes television and newspaper advertisements across the country.
    The nursing-home industry is no stranger to politics.
    The industry has spent millions of dollars on lobbyists and contributed millions more to President Clinton, members of Congress and the Democratic and Republican parties.
    Representatives of the nursing-home industry have attended White House coffees, and at least one nursing-home owner, Alan Solomont of Massachusetts, has been an overnight guest of the president.

    Complex law
    Barbour headed the Republican National Committee from 1993 to 1997.
    An affable, 50-something lawyer from Mississippi, he is a partner in Barbour, Griffith and Rogers, considered one of Washington's top lobbying firms.
    The firm reported to Congress earnings of $7.3 million last year. Other clients include BellSouth, Philip Morris and the Swiss government, according to a published report.
    Barbour, in an interview in his well-appointed office just a few blocks from the White House, said he was retained in April as a lobbyist by a consortium of about 10 to 12 nursing-home companies.
    Those companies include Sun Healthcare Group of Albuquerque; Beverly Enterprises of Fort Smith, Ark.; and HCR Manor Care of Toledo, Ohio.
    The lobbyist said his job is to work Republican members of Congress.
    Former House leader Vic Fazio, D-Calif., was hired by the same group to take the lead in lobbying Democrats, Barbour said.
    Fazio, while a member of Congress, voted for the Balanced Budget Act of 1997.
    Barbour said the nursing-home industry is in financial pain largely because of how the law has been implemented by the administration, through the Health Care Financing Administration.
    "In a law that's this complex, it's expected that there are going to be implementation problems," he said.
    The primary problem is that the new fixed rates for Medicare-covered stays in nursing homes were set too low by the Health Care Financing Administration, Barbour said.
    As a result, he said, payments to nursing homes are billions of dollars below what Congress intended in the Balanced Budget Act of 1997.
    Barbour and the industry want an immediate across-the-board increase that would be in effect until the new system of fixed rates is fully implemented by HCFA beginning July 1, 2001.
    The agency is expected to make refinements in the rates before full implementation.
    "My clients don't want to get rid of it (the new system of fix rates)," he said. "They just want it implemented in a way that results in the level of spending Congress intended and results in their being able to operate and spend that money where it produces the care."
    Barbour said lower-than-expected payments to nursing homes are part of a bigger problem: Overall Medicare spending was down in the first six months of the 1999 federal fiscal year.
    And the former GOP chairman hinted that could become a political liability for Democrats in 2000 elections if the Clinton administration doesn't act to put more money into the program.
    "From any standpoint, no member of Congress from either party wants to get blamed for shortchanging Medicare and causing a crisis for senior citizens," Barbour said.
    The administration says the lower-than-expected spending on Medicare might be due to several factors, including low inflation, efforts to reduce fraud and abuse, and delays in making payments to providers.

    'We have to make our case'
    The Wall Street Journal reported in May that the American Health Care Association -- a trade group that represents nursing-home companies and other long-term care providers -- was mapping out an extensive lobbying effort, including a possible $1.5 million advertising campaign.
    Linda Keegan, vice president of the association, said in an interview that she didn't know where The Wall Street Journal got the $1.5 million figure. But she added, "We have to make our case.
    "Our efforts are really focused right now on pulling all the lobbying efforts together, coordinating them," Keegan said. "We're thinking about how we communicate to the American public and policy-makers in particular that this issue is having a real impact on people."
    The American Health Care Association and the Alliance for Quality Nursing Home Care have jointly placed newspaper and television ads.
    A 30-second TV ad says Medicare payments for nursing homes have been cut billions of dollars more than called for in the Balanced Budget Act of 1997.
    The ad features a daughter talking about her father, who has suffered a stroke, and his need for nursing-home care.
    "My dad, his generation, did everything for us," the daughter says. "And this is their reward? This is the big payoff?"
    The TV ad asks viewers to call Congress and the White House and ask that Medicare funding be restored.
    An ad similar to that of the TV spot has been published in newspapers. Another newspaper ad urges health-care workers to call their representatives in Congress and the White House.
    Health-care workers are also asked to request that residents' families and others do the same.
    "Patients recuperating from strokes, amputation, head trauma and degenerative diseases may no longer have access to the vital services they need," the ad says.
    Keegan said members of the American Health Care Association, which includes Sun Healthcare Group, would pay the group's costs. The Alliance for Quality Nursing Home Care is the group of nursing-home companies, including Sun, that hired Barbour and Fazio.
    Mark Wimer, president and chief operating officer of Sun, said in an interview that he didn't know how much the company would spend on lobbying activities.
    But, he added, "We're spending more effort now trying to get our message across than we have ever done before because the circumstances are more dire than they've ever been."

    Lobbying effort
    Nursing-home companies have traditionally acted individually and through trade groups to try to influence policy-makers in Washington and at the state level.
    For example, the American Health Care Association gave nearly $725,000 to Democratic and Republican candidates for federal office in 1997 and 1998.
    The association has lobbyists on staff and spent at least $224,000 on outside lobbyists last year, according to lobbyist data collected by the Center for Responsive Politics and Public Disclosure Inc., both of Washington.
    The health-care professionals who work in nursing homes -- occupational therapists, dietitians and others -- also have trade groups that spend hundreds of thousands of dollars on campaign contributions and lobbyists.
    Like other nursing-home companies, Sun Healthcare Group has made campaign contributions and hired lobbyists on its own.
    Sun donated $15,000 to the National Republican Senatorial Committee in 1996, according to data from the Federal Elections Commission and made available by the Center for Responsive Politics.
    Reports filed with Congress show Sun spent about $150,000 on lobbyists in 1997 and 1998, according to data collected by the Center for Responsive Politics and Public Disclosure Inc.
    Employees of Sun, including chairman and chief executive officer Andrew Turner, also have made contributions to federal candidates.