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Who Do You Want to Oversee Medicare?

President Barack Obama talks on the phone while aboard Air Force One. (Photo: Pete Souza / White House)

Part of the Series

Within the past month, the Obama administration has heard from two very different groups. In mid-February, the lobbyist trade group, American League of Lobbyists (ALL), sent a letter to President Obama complaining that his rules for not hiring lobbyists for several years in his administration was too harsh.

They did make the point that these ethic rules preventing lobbyists from briefing or going to work for the administration were only aimed at registered lobbyists, not the thousands of self-dealers and influence peddlers who work as consultants and advisers for law firms and lobby shops, who don’t register as lobbyists but work for corporate clients’ money interests in the federal budget. Newt Gingrich’s inane statements that he wasn’t a lobbyist for Freddie Mac, but was a historian for them, brought the usual standard lobby dodge to absurd heights. This trade group is interested in bringing more people into the registered lobbyist realm to swell their membership, but also have the Obama administration lift the rules that prevent these lobbyists from routinely going through the revolving door to work for the government after serving as lobbyists for their mostly corporate clients.

The second group consisted of good-government nonprofit groups that are sponsoring Sunshine Week this week and are urging the Obama administration and others to make government more transparent, including having a more responsive Freedom of Information Act, and to cast more light and heat on the special interests and corporate entities that are pouring money into lobbying and campaign coffers to get their cut of federal money, favors, government jobs or subsidies.

These two groups illustrate the tug and pull in Washington to try to rein in political and corporate self-dealing after years of business as usual in the Capitol and the White House. The reformers, who are greatly out numbered and out financed, have struggled to get any semblance of control over who is throwing around money and who is spinning in and out of government work from corporations or their hired lobby shops.

SolutionsOne of the largest government entities in the executive branch is the Centers for Medicare and Medicaid Services (CMS), which is responsible for payments of Medicare and Medicaid. It has a budget of $820 billion and is involved with the drafting of the rules and regulations of Obama’s new health care law. It is also in charge of overseeing both Medicare and Medicaid and rooting out fraud in these programs. With this much money at stake, you would think that it was important to have steady and long-term leadership at the top of CMS, but instead, it hasn’t had a permanent director since 2006.

President Obama nominated a problem-solving, reform-leaning Director, Donald Berwick, a month after the health care reform passed. As stated in a Washington Post opinion piece, he seemed to be a well-qualified choice having founded a nonprofit organization dedicated to making health care work better for the patients and doctors, and should have been an easy choice for the Senate to confirm his nomination. When the Republicans in the Senate balked at appointing this reformer, Obama made him acting director during a recess appointment. From the article:

So why didn’t the Senate, which confirms CMS administrators, put someone in charge? Berwick, whose name surfaced as a potential leader shortly after Obama’s election, seemed a good choice. A pediatrician, he steered the nationally recognized Institute for Healthcare Improvement, a nonprofit near Boston. Obama waited to submit his name until April 2010, one month after passage of the health-care law. By then, Republicans were openly attacking the legislation, so the president appointed Berwick during the congressional recess that July.

This recess appointment avoided what many predicted would be a losing battle with Senate Republicans. Some in the GOP accused Berwick of promoting rationing after he made favorable comments about the British National Health Service. Sen. Pat Roberts (R-Kan.), for example, said Berwick’s focus on cutting costs would lead to a rural health system consisting of “a Band-Aid and a bedpan.” Berwick, meanwhile, said in an interview that Republicans “twisted and distorted” his words and used the agency as a political football.

“What happens, I think, when you have a lot of turnover is senior staff loses its confidence and is less willing to take risks,” Berwick said, adding that the churn in administrators “demoralizes and confuses” staff members. As for the GOP: “It’s a game to them,” he said.

Without a hearing, Berwick had little choice but to resign. His term as acting administrator expired at the end of 2011 and 42 Republican senators had announced their intention to block his confirmation. Within days, Obama nominated Berwick’s replacement as acting administrator, Marilyn Tavenner, a former Virginia health official and executive with the for-profit Hospital Corporation of America.

By nominating Tavenner, President Obama, perhaps thinking that he could appease the Senate by appointing someone from a health corporation, could get her confirmed. But this new nominee has a much different background on influencing health care with evidence of self-dealing going back to the Bush administration.

Tavenner did start out her career as a nurse, but joined the notorious Hospital Corporation of America (HCA), and for 25 years, worked her way up to top management. HCA, which was founded by the family of former Senate Majority Leader Bill Frist, was caught defrauding Medicare in fraudulent billings and doctor kickbacks. After many government raids and investigations, HCA ended up with 14 felonies and paying civil damages of over $2 billion, one of the largest health care frauds in history. The chairman and CEO of HCA at the time of the first government raids was forced to resign, but kept hundreds of millions of dollars of stock when he left. His name was Rick Scott, and he is now the Republican governor of Florida.

The Frist family, along with other investor capital firms, took the company private after the fraud, only to put it out for another public offering and made more money. One of the capital firms that made great returns from this deal was Bain Capital, the investment firm founded by now Republican presidential hopeful Mitt Romney.

While it appears that Ms. Tavenner did not directly get caught up in the fraud scandal, she stayed at the firm during the years of the government investigation. She also was working with Republicans in the decades before she was nominated and has won the praise of Rep. Eric Cantor (R-Virginia) even though he is dead set to repeal the president’s health care reform. According to Ezra Klein’s column in The Washington Post, their connections go way back:

The connection between Cantor and Tavenner is a personal one. The two have known each other since the mid-1990s, when he represented part of Richmond in the Virginia House of Delegates and she ran a major hospital in the city. Cantor estimates they’ve worked together for about 15 years now, most recently coordinating on Virginia-related issues, particularly Medicaid, as Cantor serves in the House and Tavenner oversaw Health and Human Resources for then Gov. Tim Kaine …

But what he likes about Tavenner is clear: A lengthy history as a private sector hospital administrator. “I’ve always found her to be a real professional who understands the head for patient quality,” Cantor says. “She gained a full background in patients’ perspective. Having worked in the private sector, she understands the need for a robust private sector health care system that can’t be managed by a bureaucrat in Washington.”

One might hope to see this a bipartisan effort on Ms. Tavenner’s part, but a look at her campaign contributions show a pandering to the Republicans until 2006 when she abruptly changed her campaign giving to the Democratic Party.

According to the Center for Responsive Politics’ Open Secrets databases, Ms. Tavenner, from 1998 to 2006, gave campaign contributions to President George W. Bush; the Federation of American Hospitals; the American Hospital Association; Eric Cantor; and the Committee for the Preservation of Capitalism, a PAC that backed right-wing candidates such as Alvin West and 13 other Republican candidates.

Starting in mid 2006, Ms. Tavenner drastically changed her political contributions away from hospital trade organizations and Republicans to Democrats. She started by giving money to the Democratic Party of Virginia and switched her PAC giving to Forward Together PAC run by former Virginia Gov. Mark Warner and backed Democratic candidates such as Rep. Jim Moran (D-Virginia), Sen. Mark Warner (D-Virginia), Gov. Tim Kaine, (D-Virginia) and President Obama.

According to the Open Secrets’ database, Mr. Berwick only political giving was a contribution to Democrat John Kerry’s presidential campaign in 2004.

Her change in political giving paid off. In 2006, then Democratic Gov. Tim Kaine appointed her head of Virginia’s Health and Human Services Department and she was appointed by the Obama administration as Berwick’s deputy principal administrator in April 2010.

Even though Ms. Tavenner won praise from Representative Cantor, there is no evidence that she will be able get confirmation through the Republicans in the Senate, who, despite her corporate background and Republican political contributions, don’t want a permanent director to help ease in the rules of the new health care law. But she will be there as the acting director with her 25-year corporate background and her flip-flop political giving while making decisions on the rules for the new health care law and running the vital Medicare and Medicaid programs.

Once again, like the Department of Defense and the Treasury Department, a major industry person from a company that massively defrauded the government has made their way into the oversight and reform of one of our most important government programs. Political expediency rather than good governance seems to be the winning rule in this current divided government. President Obama did try to put in a reformer, who had spent his life in the nonprofit world studying ways to make our health care work for the public, but Obama was forced to go with a corporate employee of one of our worst health care companies. And she still may not even have the power to get out of her acting director role, even if she wants to do the right thing.

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