So is Sen. Chuck Grassley in bed with Sen.
Trent Lott and his brother-in-law, trial lawyer
par excellence Dickie Scruggs? It sure
looks that way, and Republicans should be getting nervous.
Scruggs has been waging a war across the country with nonprofit
hospital groups, filing suits against them in federal and lower
courts claiming that healthcare facilities that get tax breaks
should charge uninsured far less for services, and not berate those
low-income individuals who do not pay, and should stop cutting
exclusive deals with groups of doctors in which the physicians get
free use of the facilities, but other doctors are shut out.
Scruggs and his band of trial lawyer buddies have filed at least
30 such cases, the majority of which have been thrown out of
federal court. But the ambulance chasers have filed in lower state
courts, as well. At stake could be millions of dollars to line
attorney pockets if judges award attorney fees based on a portion
of the amount repaid by hospitals to plaintiffs.
The failure of the trial lawyers to get any traction on the
federal level has been frustrating, to be sure, and Grassley,
chairman of the Senate Finance Committee, has been looking at
nonprofit hospitals for a while. He has said that he will introduce
legislation that would draw nonprofit hospitals under tighter
federal regulations, particularly on the way they bill and collect
fees for services.
Various hospital groups had been in discussions with Finance
Committee staffers on the legislation, and things seemed to be
moving apace. While no one was happy with Grassley’s legislative
plans, there were expectations, according to sources on both sides
of the issue, that they would be able to work something out.
Then out of the blue, Grassley sent a letter to 10 hospitals and
hospital systems, requesting information on their charitable
activities, patient billing, and ventures with for-profit companies
and hospitals.
In a press release, Grassley noted that the inquiry is a
“continuation of his effort to review the nonprofit sector in
advance of legislation he will introduce to prevent abuse of the
federal tax laws that created nonprofit organizations and encourage
charitable donations.”
What he should have added was that his letter appeared to come
right of Scruggs’s lawsuit playbook. “The fact is these are the
exact kinds of documents and information that Dickie Scruggs has
been trying to get his hands on for his lawsuits,” says a
conservative Republican staffer on the Finance Committee. “We’re
essentially doing the heavy lifting in discovery for the trial
lawyers and Senator Lott’s brother-in-law.”
Lott has not been out front on this issue, and has found himself
in the middle of some ugly political battles because of his
relationship with Scruggs. This appears to be yet another such
instance.
Some Republican staffers, though, weren’t surprised to see
Lott’s name associated with this budding controversy: “Any chance
Lott gets to dance on an area that will annoy [Senate Majority
Leader Bill] Frist, is a chance
Lott will take,” says a Senate GOP staffer. “Some of these are
high-profile hospital groups, and I’m sure Frist has some ties to
them.”
Among the hospital groups that received the Grassley letter
were: The Cleveland Clinic; New York Presbyterian Hospital System;
Phoebe Putney Health Systems, Inc., Phoebe Putney Memorial
Hospital, Inc., Albany, Ga.; Sutter Health, Sacramento, Calif.;
Fairview Health Systems, Minneapolis; and Banner Health, Phoenix,
Ariz.
Hospital groups found the letter curious, since it appeared that
they were making reasonable headway with Grassley’s staff. Now all
bets are off.
“How a Republican chairman ends up essentially helping the trial
lawyers is beyond me,” says a healthcare lobbyist. “Healthcare is
an issue Grassley cares about, perhaps this is his staff’s doing,
but someone needs to step in and take care of this. It
stinks.”
