Last-Minute Inserts Offer Benefits in Medicare Bill
By Robert Pear New
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
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
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
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
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
“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.”