A Senate panel looking into allegations of campaign finance abuses is investigating whether the long-term-care industry received improper preferential treatment from the Clinton administration in return for hefty political campaign contributions.
The Senate Committee on Governmental Affairs has subpoenaed Alan Solomont, finance chairman of the Democratic National Committee, demanding documents related in part to his connections with the long-term-care industry. Solomont also is the former chief executive officer of ADS Group, a nursing home chain, and president of the Massachusetts Federation of Nursing Homes.
The documents sought under the subpoena are due to the committee Aug. 22, a committee spokesman said last week.
Solomont did not return calls, but a spokesman for the DNC acknowledged that Solomont and ADS had been subpoenaed. He wouldn't say on what grounds.
The committee, chaired by Sen. Fred Thompson (R-Tenn.), is looking into allegations of illegal fund raising during the last presidential campaign.
According to several aides familiar with the inquiry, one angle investigators are pursuing is whether the Clinton administration purposely eased off on the enforcement of nursing home regulations after several nursing home executives made contributions to the Democratic Party.
"We're looking at whether certain individuals made contributions in return for policy decisions favorable to them," an aide said.
The aide added that while the committee was not "accusing anyone of any wrongdoing," there was evidence to "suggest that (Solomont) and the industry for which he was a major fund-raiser received favorable treatment, that there was a quid pro quo."
As first disclosed in MODERN HEALTHCARE, a number of nursing home executives and their representatives attended meetings at the White House in 1995 and 1996 (Feb. 24, 1997 p. 34). Those meetings were called "coffees" on official White House documents.
Federal laws prohibit solicitations at the White House, and DNC and Clinton administration officials have denied that the coffees were fund-raising events.
A number of the events were attended by both long-term-care executives and DNC fund-raisers and finance personnel.
For example, on four occasions, Integrated Health Services Chairman and CEO Robert Elkins, M.D., attended meetings with White House and DNC officials. Three of the meetings occurred in December 1995; the fourth was in January 1996.
From Dec. 20, 1995, to April 26, 1996, Elkins and IHS, a post-acute provider based in Owings Mills, Md., made four contributions to the DNC of $50,000, $500,000, $50,000 and $75,000. In total, Elkins and IHS contributed nearly $600,000 to the DNC during the 1995-96 election cycle.
In October 1996 the administration proposed scaling back safety and quality inspections at many nursing homes. But it reversed itself two months later in December after a firestorm of criticism from consumer groups. The administration also has made other, less public, changes to the enforcement regulations over the past several years that consumer groups say have weakened quality control at nursing homes.
"In our last meeting with (HCFA Administrator) Bruce Vladeck in June, he made it clear that they would only go after `bad apples,' using the term the (nursing home) industry likes to use," said Elma Holder, executive director of the National Citizens' Coalition for Nursing Home Reform. "That is exactly what the industry has been saying, that enforcement should only apply to repeat offenders."
Seniors' advocates point to a series of letters from Clinton administration officials to nursing home representatives as evidence that the contributions led to a cozy relationship between the two.
The nursing home industry won some battles but lost others in the recently passed federal balanced-budget bill.
The No. 1 priority for nursing homes was finding an acceptable alternative to the "Boren amendment," which requires states to compensate providers for all reasonable Medicaid-related costs. The balanced-budget law repeals the Boren amendment but does set up a system that requires states to publish their Medicaid reimbursement rates and justify them.
The law also sets up a Medicare prospective payment system for skilled-nursing facilities akin to the DRG system for acute-care hospital services. The long-term-care industry supported the change to a prospective payment system from a cost-based reimbursement system. Under the provision in the law, HHS has wide discretion to develop the new payment system for skilled-nursing facilities.
According to a memo from Bruce Yarwood, chief lobbyist for the American Health Care Association, "A good portion of the AHCA's legislative agenda has been addressed through the (budget) bill."
An AHCA spokesman said no one at the organization had been contacted by Senate investigators. Through a spokesman, Elkins said he had not been subpoenaed by the committee.