When hospitals want favors in Washington, they don't always look to the American Hospital Association or the Federation of American Health Systems to get the job done.
In fact, 10 hospitals paid a combined $1.3 million in the first six months of 1999 alone to one of the biggest lobbying firms inside the Beltway to help them obtain millions of dollars from federal agencies, according to congressional records compiled by FECInfo, an Internet site that tracks lobbying expenses and political contributions.
The firm is Cassidy & Associates, the biggest-grossing lobbying firm in Washington in 1998, when it billed clients $19.8 million, according to a ranking in the magazine National Journal.
Cassidy & Associates' other clients include universities, military contractors, major league baseball and the Professional Golfers' Association tour.
Cassidy & Associates' chief operating officer is Marty Russo. The former Democratic U.S. representative from Chicago's south suburbs was vice chairman of the House Ways and Means health subcommittee, which has jurisdiction over numerous healthcare issues and programs, including Medicare.
As a member of that committee, Russo introduced legislation to create a national health insurance system. He was defeated in 1992.
Russo referred telephone calls to firm spokesman Mark Day, who would not comment on clients' specific goals.
According to lobbyists familiar with the firm, Cassidy & Associates' expertise is in securing pork for its clients through the 13 annual spending bills that fund federal government operations.
For providers, that funding often comes through healthcare facility construction grants issued by HHS' Health Resources and Services Administration.
For instance, Condell Medical Center, a 175-bed hospital in Libertyville, Ill., hired Cassidy & Associates to help it obtain a $2 million grant from HRSA to fund the construction of a new open-heart surgery center, an intensive-care unit and operating rooms, which will open later this year.
Total cost of the construction is $90 million, some of which will be financed through hospital debt, said Van Hanover, the hospital's executive vice president.
The hospital paid Cassidy & Associates $100,000 in the first six months of 1999. It received certificate-of-need authorization in November 1999 to build the open-heart surgery center, one of the first two to open in Lake County, in Chicago's northern suburbs.
Hospital for Special Surgery, a 138-bed facility in New York, paid Cassidy &|Associates $140,000 during the first six months of 1999. It obtained a $1 million grant from HRSA to renovate laboratories, said Deborah Sale, the hospital's executive vice president.
No one from Cassidy & Associates' other hospital clients returned telephone calls last week seeking comment on their hospitals' goals in hiring the firm (See chart).
The final HHS spending bill for fiscal 2000 listed many of those clients as recipients of a total $122.2 million in HRSA healthcare facility construction grants. Among them were Englewood (N.J.) Hospital and Medical Center and Memorial Hermann Healthcare System, Houston.
The bill noted that the House's original version of the legislation didn't authorize any healthcare facility construction grants, and the Senate's version authorized just $10 million. The $122.2 million was included in the final spending bill that was a compromise between House and Senate versions of the measure.
In a separate HRSA appropriation of $35 million in rural health research grants, Santa Rosa (Calif.) Memorial Hospital received $300,000 for a telemedicine project. It paid Cassidy & Associates $100,000 during the first six months of 1999.
While Cassidy & Associates worked to get pork for its hospital clients in the first half of 1999, the AHA increased its lobbying expenditures by 5.8% over the previous year. It spent more than $4 million on lobbying in the first half of 1999 compared with $3.8 million in the year-ago period. It finished 1998 spending a total of $9.3 million.
The AHA was pushing for a rollback to payment restraints enacted under the Balanced Budget Act of 1997. That lobbying effort yielded $16 billion in increased payments over the next five years.
According to FECInfo, hospitals, including the major industry groups, spent $12.8 million on lobbying in the first half of 1999.
Lobbying groups and firms had a deadline last week to file their year-end reports for 1999 with the clerk of the House and the secretary of the Senate.