Healthcare providers and lawyers were disappointed but not surprised by last week's resignation of embattled HHS Inspector General Janet Rehnquist. Members of Congress applauded the announcement.
Rehnquist, facing a potentially embarrassing report from the General Accounting Office and an ethics review from the President's Council on Integrity and Efficiency, as well as pressure from the current and former chairmen of the Senate Finance Committee, Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.), submitted a one-page resignation letter to President Bush on March 4. The resignation is effective June 1.
In the letter, Rehnquist said she was stepping down from the position she's held since August 2001 to "spend more time with my teenage daughters and pursue other professional opportunities."
Chip Kahn, president of the Federation of American Hospitals, lauded Rehnquist for trying to improve relations with providers in areas such as compliance and corporate integrity agreements. Kahn said Rehnquist had extended a hand, stressing a spirit of collaboration over confrontation. "I'm interested in seeing whom they pick and which approach they'll take," Kahn said.
Spokesmen for the American Hospital Association declined to comment on Rehnquist's resignation.
Michael Hemsley, vice president of legal services and corporate compliance for Newtown Square, Pa.-based Catholic Health East, said Rehnquist did not occupy the post long enough to leave a strong legacy.
"I'm not surprised that she left, given the controversy surrounding her. But everyone welcomed the less-adversarial approach," Hemsley said.
Last month in the midst of the attacks on her, Rehnquist gave Modern Healthcare her first print interview in her spacious office in the Cohen Building. In that interview, she defended herself and her office from the attacks and pointed to a solid record of achievements. But early last week, only hours after assuring Modern Healthcare and senior agency staffers that she would not step down, the 45-year-old divorced mother of two submitted her resignation.
Rehnquist's appointment was controversial almost from the start. The middle child of U.S. Supreme Court Chief Justice William Rehnquist and his late wife, Natalie, Rehnquist was appointed only months after a Supreme Court majority led by her father delivered the disputed 2000 Florida election and the presidency to George W. Bush. Although she is generally considered to be a talented and savvy healthcare lawyer who previously worked on the Permanent Senate Subcommittee on Investigations, the White House Office of Counsel and as an assistant U.S. attorney in Alexandria, Va., she had never managed a federal agency before.
She faced investigations for a number of incidents of alleged misconduct, including carrying a 9 mm gun into her office; possessing and flashing a law-enforcement badge to which she was not entitled; overseeing or causing at least 15 major personnel changes among senior staffers; delaying a potentially politically damaging audit of Florida's pension fund until after the re-election of Gov. Jeb Bush, the president's brother; reducing the amount of a False Claims Act hospital settlement after lobbying from two Pennsylvania Republican senators and a Republican congressman; and promoting and rewarding favored Republican staffers with bonuses and perks.
Government sources who asked to remain anonymous varied in their theories about why Rehnquist resigned. Senate Finance Committee aides said Grassley and Baucus had been briefed on the preliminary findings of the GAO report and weren't pleased by the findings. Baucus allegedly pressured the administration for Rehnquist's resignation. But White House spokesman Taylor Griffin denied that was the case, saying the idea came from Rehnquist herself.
Sources said she met with HHS Secretary Tommy Thompson. Spokesmen for Thompson denied that she was pressured to depart, saying they urged her to fight on. The day before the announcement, Centers for Medicare and Medicaid Services Administrator Tom Scully, who had recommended Rehnquist for the position, said he would "personally throw myself in front of a train to stop anyone from suggesting she resign." He declined comment after Rehnquist announced her resignation.
Sources in the administration said Rehnquist's alleged misdeeds amounted to small lapses in judgment. They blamed disgruntled current and former employees in the inspector general's office for fomenting her troubles and sharing their concerns with Grassley's office. But even her supporters agreed that she should have confronted the mounting accusations when they first aired. She did not respond, and her troubles increased.
Sources said Dennis Duquette, deputy inspector general for audits, has the inside track as interim inspector general when Rehnquist departs.
Career experience: Confirmed as inspector general, August 2001; assistant U.S. attorney, Alexandria, Va.; counsel to the Permanent Senate Subcommittee on Investigations; associate counsel to the president, White House Office of Counsel; Washington law firm Baker & Hostetler
Education: Undergraduate degree in French and law degree, University of Virginia, Charlottesville
Personal: Born in Phoenix. Divorced mother of two teenage daughters. Enjoys yoga, Pilates, tennis and reading.