SCOOP: Hospitals Bankroll The Democrat Who Lets Them Send Patients Surprise Bills

Editor’s note: TMI is co-publishing this report by Donald Shaw of Sludge, a nonprofit campaign finance reporting outlet. Sludge is one of the most important journalism outlets focusing on corruption and money in politics. Check out Sludge’s website at www.readsludge.com and consider supporting their crucial work.

One of the most powerful health care industry lobbying groups has poured hundreds of thousands of dollars into the campaign to reelect Democratic Rep. Richard Neal as he blocks legislation to crack down on “surprise medical bills” and thwarts the push for Medicare for All.

The American Hospital Association’s (AHA) political action committee has spent more than $200,000 on digital ads to boost Neal’s reelection campaign as he faces a spirited primary challenge, according to campaign finance records.

AHA is one of the most powerful forces in Washington D.C. working to keep health care costs outrageously high. The trade group, which represents more than 5,000 hospitals and brings in more than $130 million annually, has lobbied against reforms to end surprise medical billing, against plans requiring hospitals to make their prices public, and against the single-payer Medicare for All proposal to eliminate for-profit health insurance.

AHA’s political action committee, AHAPAC, spends millions each election cycle to support federal candidates, but this cycle it has shelled out far more to support Neal than it has spent in any other race. The $200,000 worth of pro-Neal ads the group has sponsored are the only independent expenditures AHAPAC has made in the 2019-20 election cycle.

Huge Money Boosts An Embattled Committee Chairman

As chair of the Ways and Means Committee, Neal controls all legislation that has a tax component, including most major health care bills. Neal has used his chairmanship in the current congressional session to block a deal to end surprise medical bills at the end of 2019 and to prevent his committee from debating a public health care option or so much as utter the words “Medicare for All.”

AHA’s first round of spending for Neal, totaling $69,000, came shortly after the congressman effectively blew up a measure opposed by AHA that would have eliminated surprise medical bills -- a euphemism for the costly charges that occur when patients visit a hospital within their insurance network but are unknowingly treated by a provider who is not part of their network. The proposal in Congress would have capped out-of-network charges at a benchmark rate based on the cost of equivalent in-network care.

Democrats and Republicans in both chambers of Congress had coalesced around the legislation, and it was set to pass as part of a year-end appropriations bill in December. Neal announced at the last minute that he was working on a counterproposal, fracturing the deal and causing it to be left out of the final package.

AHA bought the pro-Neal ads on Jan. 27, according to FEC records. On Feb. 7, Neal announced the details of his own surprise billing proposal, written with Ways and Means Ranking Member Rep. Kevin Brady (R-Texas). Their plan swapped out the cost control measure in the original bill with voluntary negotiations backed up by arbitration, and closely mirrored what AHA wanted. AHA issued a letter on Feb. 10 saying it supported the bill.

The AHA ads, which were targeted to internet users in Western Massachusetts, said that Neal is “protecting health care” for his constituents, according to Google’s political ad archive.

Hospitals Banking on Surprise Billing

Some hospitals have profit-sharing agreements with the physician staffing firms they contract with, allowing them to retain a portion of what the firms earn by springing surprise bills on out-of-network patients. One AHA member, hospital giant HCA Healthcare, launched a joint venture in 2012 with Envision Healthcare, a physician staffing company owned by private equity firm KKR that has been a top source of surprise medical bills.

Last year, Envision and TeamHealth, a hospital staffing company owned by private equity titan Blackstone Group, joined forces to bankroll a $54 million dark money advertising campaign against surprise billing reform. Blackstone has been Neal’s top source of cash ($48,600) this election cycle, according to the Center for Responsive Politics.

AHA’s second expenditure for Neal, also for internet ads, was made on August 5 and totaled $133,000, according to FEC records, as all signs suggested he was in a close primary race against his progressive challenger, Holyoke Mayor Alex Morse.

Internal polling from the Morse campaign, reported by HuffPost this week, found him gaining ground against Neal, with the incumbent’s support below 50 percent. (The polling was conducted before the College Democrats of Massachusetts publicly accused Morse, 31, of having sexual relationships with college students.)

Morse’s fundraising this cycle has been strong and he’s been endorsed by many of the grassroots groups that supported the campaigns of insurgent progressives like Jamaal Bowman and Rep. Alexandria Ocasio-Cortez (D-N.Y.).

"Richie Neal profits from special interests because he’s been doing their bidding for decades,” Morse told Sludge and TMI. “His decision to tank legislation that would protect patients from surprise medical billing is just one example of how he’s thrown working families under the bus to protect his corporate donors.”

Neal did not respond to a request for comment on the AHA ads and the surprise medical billing issue.

‘Access to Health Care’

In an August 2019 article, the American Prospect’s executive editor, David Dayen, described how the hospital industry drives up health care costs across the board.

“Hospital administration has swelled, and administrators earn more in America than any other country,” Dayen wrote. “Much of the windfall in health care goes into the waiting arms of middleman executives at large hospital networks. And these networks have consolidated, with 1,667 hospital mergers from 1998 to 2018, over 540 of them just since 2013.”

Neal was a featured speaker at AHA’s 2019 annual membership meeting, held last spring in Washington D.C. Introduced by AHA president and CEO Rick Pollack as their “friend in Washington,” according to audio obtained by TMI and Sludge, Neal went on to recite one of the hospital industry’s main talking points against a single-payer health care system, calling for people to have access to care, rather than guaranteed coverage.

“We should be working together to make sure that we all buy into the idea of universal access to health care. That ought to be the standard that we embrace, to make sure that everyone has the chance to receive the kind of health care we desire for ourselves,” Neal told the AHA summit audience.

Neal then spoke about opposing Republican cuts to the Affordable Care Act, but said nothing about supporting a mainstream Democratic proposal to strengthen the existing law by adding a public option to compete with the private insurance plans on the exchanges. AHA has opposed public option proposals and last year promoted a study suggesting that such a plan could “reduce hospital payments by nearly $800 billion over 10 years.” Private insurers typically pay hospitals about twice as much as Medicare does for the same services.

At least four bills to establish a public option have been proposed in the House this session, and Neal has not co-sponsored any of them. In 2018, Neal told the editorial board of the Daily Hampshire Gazette that he opposed Medicare for All and favored “an approach that is a little more incremental in nature,” and said he would prioritize bringing back the tax penalty for people who do not buy private insurance or otherwise obtain qualifying coverage.

Three of the public option bills introduced this Congress were referred to both Neal’s Ways and Means Committee and the Energy and Commerce Committee, chaired by Rep. Frank Pallone (D-N.J.). The Energy and Commerce’s health subcommittee held hearings on all three, while the Ways and Means health subcommittee did not hear any of them.

Neal, the top House recipient of corporate PAC money in 2019, has received many contributions from the health industry. According to the Center for Responsive Politics, his top donors this cycle include insurance giants Blue Cross Blue Shield ($47,500) and UnitedHealth Group ($21,500), as well as pharmaceutical manufacturers like Eli Lilly ($10,000), Genentech ($10,000) and Regeneron Pharmaceuticals ($10,000).

This report is being published in partnership with Sludge, a nonprofit campaign finance reporting outlet. Check out Sludge’s website at www.readsludge.com and consider supporting their work.