To take the $140,000-a-year job as HCFA administrator, Thomas Scully will have to unload as much as $1.6 million worth of assets in publicly traded healthcare companies, including hospital giants Tenet Healthcare Corp. and the former Quorum Health Group, to comply with federal ethics rules.
Scully's financial disclosure report with the federal Office of Government Ethics, obtained last week by Modern Healthcare, shows his biggest healthcare holding as Oxford Health Plans, Trumbull, Conn., valued at $500,001 to $1 million.
Scully, who faces a confirmation hearing in the Senate Finance Committee this week, sits on the board of Oxford, for which he received compensation of $70,000 between January 2000 and May 2001.
Now president of the Federation of American Hospitals, Scully also owns stock in several other hospital companies, including Health Management Associates and HealthSouth Corp.
The value of Scully's HMA and HealthSouth stock is between $15,001 and $50,000 at each firm; his stock value in Tenet and in Quorum, now owned by Triad Hospitals, is less than $1,001 in each.
Scully also sits on the board of dialysis provider DaVita, Torrance, Calif., and listed holdings worth as much as $300,000 in the firm. According to DaVita's 2001 proxy statement, the company gave Scully the option to buy 21,000 shares in 2000. Scully's ethics report said DaVita paid him $17,000 for sitting on its board.
The report also lists holdings in pharmaceutical manufacturers Johnson & Johnson and Pfizer, as well as General Electric, which owns a medical products division.
In an interview, Scully said he intends to comply with federal ethics rules by selling all his health-related assets, or giving up options he considers worthless, in the 90 days after he is confirmed.
"I'm in a hurry to sell them, but I'm not in a hurry to get crushed in the market," he said. He plans to stay on the Oxford and DaVita boards until confirmed.