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Last-Minute Inserts Offer Benefits in Medicare Bill
By Robert Pear New York Times
Friday, December 15, 2006


WASHINGTON — By slipping four sentences into a big bill (HR 6408) passed last week, Speaker J. Dennis Hastert secured a major change in Medicare policy avidly sought by a few health insurers, in particular a multinational company with headquarters in his home state, Illinois.

In the final hours of the 109th Congress, the Senate Democratic leader, Harry Reid of Nevada, also got special treatment for a hospice in his state. The bill did not name the hospice, but specified the Medicare provider number for the intended beneficiary, the Nathan Adelson Hospice in rural Pahrump, Nev.

Representative Bill Thomas, Republican of California, inserted a provision earmarking $40 million for a valley fever vaccine sought by his constituents, while the Senate Republican leader, Bill Frist of Tennessee, obtained tens of millions of dollars for hospitals in his state.

These examples illustrate how power is exercised in the final, chaotic hours before Congress adjourns. Obscure provisions of interest to just a few lawmakers were quietly stuffed into a grab bag of legislation, with no indication of their parentage or purpose.

The White House has indicated that President Bush will sign the bill, which deals not only with health care but also with a variety of tax and trade issues. The bill, for example, creates a special tax depreciation allowance for property used to produce ethanol from corn stalks, regulates the use of wine names like Champagne and Chablis, and suspends the tariff on imported rayon fibers used in making certain tampons.

Mr. Hastert’s provision showed up mysteriously after House and Senate negotiators had finished writing the bill. The provision was added by the House Rules Committee, just a few hours before the bill went to the House floor last week.

Congressional aides, Medicare officials and insurance lobbyists said the main proponent of the measure was the Aon Corporation and its subsidiary, Sterling Life Insurance Company. Aon, a Fortune 500 company, is based in Chicago and does business in more than 120 countries.

Under current law, Medicare beneficiaries can sign up for a prescription drug plan or a private Medicare Advantage plan from Nov. 15 to Dec. 31 each year. They have a limited ability to make changes through March 31 and are generally locked in for the remainder of the year.

Mr. Hastert’s amendment permits certain Medicare Advantage plans, like Aon’s, to enroll people throughout the year. Ron Bonjean, a spokesman for Mr. Hastert, said the purpose was “to get more people enrolled in Medicare Advantage plans.” Al Orendorff, a spokesman for Aon, said, “We are not going to comment.”

The provision could benefit several other insurers, but Larry Oday, a lawyer and lobbyist for Aon, said the company was “actively involved in consideration of this piece of legislation” and had led opposition to the lock-in requirement.

The addition of the provision infuriated Senate negotiators from both parties.

Senator Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee, said the provision did not go through the regular legislative process.

“It disturbs me that this major policy change — one that treats some plans unfairly — was included at the last minute by the House Rules Committee,” Mr. Grassley said.

The senior Democrat on the Finance Committee, Senator Max Baucus of Montana, said: “I soundly rejected this proposal during negotiations with our House colleagues. They were clearly informed of my position. Our final agreement did not include this provision.”

Mr. Reid’s amendment provided $3.8 million in relief to the Nathan Adelson Hospice. Medicare officials said they had overpaid the hospice and were trying to recover that amount.

Mr. Reid said the legislation would overturn “a flawed administrative ruling” by the federal Centers for Medicare and Medicaid Services. The legislation retroactively designates the Adelson hospice in Pahrump as a branch of one in Las Vegas, making more money available.

Hospice trustees used their influence with the state’s Congressional delegation, and the hospice retained a Washington law firm, Hogan & Hartson. But Carole A. Fisher, president of the hospice, said Mr. Reid and Nevada’s Republican senator, John Ensign, “were the real champions of our cause, who ensured that we got relief from our Medicare debt.”

In Tennessee, hospitals estimate that they will get at least $131 million because of the provision added by Mr. Frist, who is retiring from the Senate next month. The money will go to about 90 hospitals serving disproportionate numbers of low-income Medicaid patients and people without insurance.

Craig A. Becker, president of the Tennessee Hospital Association, said his organization had received help from an influential Washington lobbyist: Thomas A. Scully, former administrator of the Centers for Medicare and Medicaid Services, who is now a lawyer at Alston & Bird.

The same section of the bill provides $10 million for hospitals in Hawaii. That state’s senators, Daniel K. Akaka and Daniel K. Inouye, both Democrats, have been trying to get such an allotment for years.

Hawaii, like Tennessee, is exempted from many requirements of the federal Medicaid law because of a waiver granted by federal officials. The waivers give the states a great deal of freedom in setting eligibility and benefits, but do not provide the extra money available to other states for hospitals serving large numbers of poor people.

In seeking money for a vaccine against valley fever, Mr. Thomas said he was addressing a serious health problem caused by inhalation of a soil-borne fungus in southwestern states.

“The disease is especially prevalent in Kern County, Calif., which I represent,” Mr. Thomas said. “Unfortunately, there is no vaccine for valley fever, and there is no private industry interest in making the investment, estimated at $40 million, needed for development of the vaccine.”

Among those seeking the legislation was Sandra P. Larson, executive director of the Valley Fever Americas Foundation in Bakersfield, Calif. “Thomas is the guy who got this done for us,” Ms. Larson said. “We are so appreciative.”

http://www.nytimes.com/2006/12/15/washington/15medicare.html?_r=1&oref=slogin