House continues secretive earmarks

Youth health bill sends millions to pet projects

August 12, 2007|By New York Times News Service.

WASHINGTON -- Despite promises by Congress to end the secrecy of earmarks and other pet projects, the House of Representatives has quietly funneled hundreds of millions of dollars to specific hospitals and health care providers under a bill passed this month to help low-income children.

Instead of naming the hospitals, the bill describes them in cryptic terms, so that identifying a beneficiary is like solving a riddle. Most of the provisions were added to the bill at the request of Democratic lawmakers.

One hospital, Bay Area Medical Center, sits on Green Bay, straddling the border between Wisconsin and the Upper Peninsula of Michigan, more than 200 miles north of Chicago. The bill would increase Medicare payments to the hospital by instructing federal officials to assume that it was in Chicago, where Medicare rates are set to cover substantially higher wages for hospital workers.

Lawmakers did not identify the hospital by name. For the purpose of Medicare, the bill said, "any hospital that is co-located in Marinette, Wis., and Menominee, Mich., is deemed to be located in Chicago." Bay Area Medical Center is the only hospital fitting that description.

The primary purpose of the bill is to expand the Children's Health Insurance Program while enhancing benefits for older people in traditional Medicare. But a review of the bill by The New York Times found that it would also direct millions of dollars a year to about 40 favored hospitals by increasing their Medicare payments.

The bill would give special treatment to two hospitals in Kingston, N.Y., stipulating that Medicare should pay them as if they were in New York City, 80 miles away. Rep. Maurice D. Hinchey, a New York Democrat who worked to get this provision into the bill, said it would allow the hospitals to pay competitive wages so they could keep top health care professionals.

Some Republicans have complained about what they call "hospital pork." Rep. Pete Sessions, a Texas Republican, said the bill was "littered with earmarks for hospital-specific projects."

Republicans sometimes did the same thing when they controlled Congress. Under a 1999 law, for example, a small hospital in rural Dixon, Ill., was deemed to be in the Chicago area - 95 miles away - at the behest of its congressman, J. Dennis Hastert, who was then speaker.

When Democrats took control of Congress, they promised to be more open and accountable, saying they would disclose the purpose of each earmark, the name of the lawmaker requesting it and the name and address of the intended recipient.

But Democrats said they had no list of the projects in the recently passed bill and no explicit criteria or standards for judging which hospitals should be reassigned to an area with higher Medicare payments.

Nadeam Elshami, a spokesman for Speaker Nancy Pelosi, said people should keep the big picture in mind.

"It's easy to criticize individual provisions of large, complex bills," Elshami said, but "the focus should be on the huge number of uninsured children who will be eligible for life-saving health care under our bill."

Rep. Bart Stupak, the Michigan Democrat who championed the provision for Bay Area Medical Center, lives in Menominee. Alex Haurek, a spokesman for Stupak, said, "The congressman will not be available for comment."

The formula for paying hospitals under Medicare is complicated, but the basic idea is to adjust payments for differences in wage rates in different geographic areas. For each Medicare beneficiary admitted to a hospital, the government typically pays a fixed amount, depending on the person's illness. About 70 percent of the payment is meant to cover labor costs, which vary widely. The standard payment ranges from $4,100 a case in low-wage areas to more than $6,500 in some high-wage counties.

Nancy A. Douglas, executive director of Bay Area Medical Center Foundation, a fundraiser for the hospital, defended the change. "We compete nationwide and have to offer competitive salaries for nurses, pharmacists and other health care professionals," Douglas said.

But Rep. Dave Camp of Michigan, the senior Republican on the Ways and Means Subcommittee on Health, said treating the hospital as if it were in Chicago was "absurd on its face."

"Every hospital in America would like to be reclassified" into a labor market with higher wages because it would then receive more money from Medicare, Camp said in an interview.

Rep. Pete Stark, the California Democrat who is chairman of the subcommittee, acknowledged that "it's hard to decipher" the cryptic language used in the bill to identify specific hospitals. "It's always been thus," Stark said in an interview. "I am at a loss to explain why."

Under the bill, hospitals in three counties of upstate New York - Albany, Schenectady and Rensselaer - are deemed to be in "the large urban area of Hartford, Conn." Rep. Michael R. McNulty, a New York Democrat, said this provision would bring $28 million to "underpaid hospitals" in his district.

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