Closed-Door Deal Makes $22 Billion Difference

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By Jonathan Weisman
Washington Post Staff Writer
Tuesday, January 24, 2006

House and Senate GOP negotiators, meeting behind closed doors last month to complete a major budget-cutting bill, agreed on a change to Senate-passed Medicare legislation that would save the health insurance industry $22 billion over the next decade, according to the nonpartisan Congressional Budget Office.

The Senate version would have targeted private HMOs participating in Medicare by changing the formula that governs their reimbursement, lowering payments $26 billion over the next decade. But after lobbying by the health insurance industry, the final version made a critical change that had the effect of eliminating all but $4 billion of the projected savings, according to CBO and other health policy experts.

That change was made in mid-December during private negotiations involving House Ways and Means Chairman Bill Thomas (R-Calif.), Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and the staffs of those committees as well as the House Energy and Commerce Committee. House and Senate Democrats were excluded from the meeting. The Senate gave final approval to the budget-cutting measure on Dec. 21, but the House must give it final consideration early next month.

The change in the Medicare provision underscores a practice that growing numbers of lawmakers from both parties want addressed. More than ever, Republican congressional lawmakers and leaders are making vital decisions, involving far-reaching policies and billions of dollars, without the public -- or even congressional Democrats -- present.

The corruption scandal involving Republican former lobbyist Jack Abramoff and the bribery plea of former congressman Randy "Duke" Cunningham (R-Calif.) have prompted calls for a restructuring of lobbying rules and congressional practices that make lobbying easier.

A prime target for changes are the closed-door negotiations known as conference committees, where members of the House and Senate hash out their differences over competing versions of legislation. House and Senate Democrats last week proposed that all such conference committees meet in the open and that any changes be made by a vote of all conferees.

"It happens in the dead of night when lobbyists get a [Republican lawmaker] in the corner and say, 'We've got to have this,' " said Rep. Fortney "Pete" Stark (Calif.), the Democrats' point man on Medicare issues. "It's a pattern that just goes on and on, and at some point the public's going to rise up."

Grassley disputed the CBO's interpretation of the change as "ridiculous," dismissing what appears to be a major insurance industry victory as merely a mistake in CBO calculations, not a substantive policy change. He said he accepted the policy change because he "didn't see a big difference from the Senate position and the conference position."

But other lobbyists and aides said too much important work is being done in these closed-door conclaves. That is especially true with the budget-cutting bill containing the change in the Medicare reimbursement formula that is nearing final passage.

"I have worked many [budget] bills, and this was the most closed that I've ever seen," said one prominent Republican health care lobbyist, who spoke on the condition of anonymity for fear of jeopardizing his access to Congress.

Another health care lobbyist, not involved with the issue, said the result was a major victory for health insurers: "That's a $22 billion difference; $22 billion is a lot of money."

If no one can say which lawmakers made the change, there is no doubt who instigated it. Last month, as House and Senate negotiators sat down to finalize the budget-cutting bill, the insurance industry moved to thwart the Senate's "risk adjustment" provision.


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