Trump’s Health Secretary Nom Sought Special Treatment for Industry Donors

Elizabeth Lucas contributed to this report.

Rep. Tom Price, the physician and Georgia Republican tapped for the nation’s leading health care job, has long criticized federal spending as excessive. Yet during his years in Congress, he’s worked hard to keep federal dollars flowing to his most generous campaign donors.

Price has been a go-to congressman, a review of his records show, for medical special interests hotly sparring with regulators or facing budget cuts. Over the past decade, he has waded into issues related to specific drugs and medical devices, making 38 inquiries with the federal Food and Drug Administration, according to federal records obtained through the Freedom of Information Act. He questioned the FDA on his constituents’ behalf about matters as minute as a device for fertility treatment and an ingredient in pain creams.

In other cases, he has gone to bat for companies whose executives and employees have generously contributed to his campaigns and political action committees.

“It looks like he’s somebody who could throw the store open to a lot of niche special interests,” said Ross Baker, a political science professor at Rutgers University who specializes in Congress. “These are things that fly under the radar. If you take a meat ax to Medicare, for example, everybody would know about it. But this kind of stuff is done in the dark of night.”

Just a few weeks before Trump tapped Price to lead the Department of Health & Human Services in November, the congressman took the stage at an Atlanta conference for vendors who sell canes, hospital beds and power wheelchairs. Price was the star of the show — a conference with 5,000 attendees. He spoke to the gathered crowd about the Medicare cuts plaguing the industry and pledged to fight them. The leaders of the Medtrade conference honored Price with an award for his stalwart advocacy and convened a $100-per-person fundraiser in his honor.

Price, 62, a tea party Republican and orthopedic surgeon from the northern Atlanta suburbs, was elected to Congress in 2004 after four terms in the Georgia state Legislature. A third-generation physician, he has said he entered politics on a quest to limit government meddling in health care. He has won significant campaign support over the years from drug firms and physician groups.

Records obtained through a public records request show that Price has taken an interest in his constituents’ struggles with the FDA. He hand-signed a letter of concern over the availability of heart valves used in pediatric surgeries in 2005. Four years later, he urged review of a local company’s sperm-analysis device. He dubbed the company a “pillar of the community” and said it should be exempted from a clinical trial that would be “impossible to pass.” Earlier this year, his staffer pressed the FDA on behalf of a constituent trying to get capsaicin palmitate, a hot-pepper ingredient similar to one available over the counter — on a list of approved products for specialized pain creams.

A staunch opponent to President Barack Obama’s Affordable Care Act, or Obamacare, which he says destroys “the sacred doctor-patient relationship,” Price has offered several plans, including the Empowering Patients First Act, to repeal and replace the president’s health reforms. He favors instead offering patients health savings accounts which they may tap to pay for coverage and care, and tax credits to help people buy health insurance on their own.

Price’s office did not respond to interview requests or to detailed written questions about his relationships with contributors or his legislative record. His confirmation hearing could come before President-elect Trump’s inauguration on Jan. 20, and Senate Minority Leader Chuck Schumer has said Price is among the top targets for Democrats — and whose nomination they are trying to derail. The Office of Government Ethics will review Price’s financial disclosure report, which contains information about his assets, income and other personal financial information and then advise the Senate Finance Committee on whether Price needs to take steps to avoid conflicts of interest.

In recent weeks, Price has come under criticism for his stock trading in drug companies, including an Australian firm that plans to seek U.S. approval for a promising drug.

Phil Blando, a Trump transition spokesman, said Price has complied with the law and ethics rules. Blando said that Price “takes his obligation to uphold the public trust very seriously” and, if confirmed by the Senate, will work with ethics officials to “ensure his continued compliance and transparency.”

Champion of Medical Equipment

When thousands gathered at the Medtrade meeting to learn about the latest home medical equipment in the fall, Price pledged to help them.

The industry has battled widespread changes in government payment mandated by Congress in 2003 and implemented by the Obama administration. The reforms came after a decade of Justice Department prosecutions that targeted fraudsters who bought wheelchairs at wholesale prices, allegedly gave them to seniors who didn’t need or want them and billed Medicare at a premium.

The most recent reforms have included budget cuts and a competitive bidding program meant to limit medical supply profitability, including the wheelchairs. Providers of home medical equipment have ranked as key Price backers, contributing $52,600 to his campaign since 2013, according to a Kaiser Health News analysis of federal contributions.

Despite his longtime stance as a budget hawk, Price has sided with industry leaders who say the cuts harm rural medical suppliers who face higher costs delivering equipment. Price said in a press release that the cuts jeopardize seniors’ access to life-saving medical equipment, including scooters and oxygen tanks. “Georgia’s seniors ought to have access to quality health care,” Price said in a statement in May.

Price introduced a bill that month to delay cuts in Medicare spending for durable medical equipment, like hospital beds and motorized wheelchairs. The bill passed the House in July but died in the Senate.

Medical equipment industry leaders credit Price with helping reverse or delay some cuts through the recently signed 21st Century Cures Act, according to the blog of the Iowa-based VGM Group, which describes itself as “the nation’s premier purchasing organization” and a “silent partner” to thousands of independent providers of home medical equipment. The company and its executives have contributed more than $17,000 to Price. One leader aired his gratitude to the congressman in another blog post calling the delay of the cuts a “red letter day” for durable medical equipment suppliers.

Price has also helped protect companies that provide home health aides and nursing care to homebound seniors — a lucrative industry that prosecutors have identified as prone to fraud. Alarmed by a Medicare plan to review such claims prior to payment, industry leaders turned to Price and another congressman for help, according to the Partnership for Quality Home Healthcare, which lauded both men for listening to their concerns.

Home health companies also contributed more than $24,000 to Price from 2013 to earlier this year.

Criticizing the cost-saving plan as overly broad and impeding patients’ access to care, in September, Price introduced a bill that would delay the claim-review project a year. The bill, cosponsored by Rep. Jim McGovern (D-Mass.), stalled in a subcommittee in October.

Support for Traveling Doctors

In Congress, Price has been a vocal critic of America’s medical malpractice system — a bugaboo for many surgeons but also for a company based in his district that has provided reliable campaign donations. That firm, Jackson Healthcare, staffs hospitals and practices with temporary doctors, called locum tenens.

One of Price’s largest PAC contributors is Richard L. Jackson, the company’s chairman and CEO. The two spoke together in 2009 at a forum aimed at limiting malpractice lawsuits. Both men have asserted doctors’ attempts to avoid such lawsuits have led to costly and excessive medical care. In a 2010 interview, Jackson mentioned that he had discussed “defensive medicine” with Price, and other Congress members. Price, for his part, has referenced Jackson Healthcare’s study on the high cost of such health care.

The malpractice issue has had particular relevance to the locum tenens industry and to Jackson’s company in particular. It has faced multiple lawsuits over the alleged misdeeds of temporary doctors, including care of patients in Veterans Affairs and Indian Health Service hospitals.

Price has repeatedly introduced legislation to curtail malpractice cases and, on another front, to protect the tax status of traveling doctor companies. In September he introduced the House version of a bill that would help change the IRS code to classify travelling doctors as contractors, not employees, so that the company providing them wouldn’t be legally vulnerable for taxes in distant states. A Senate version was introduced earlier by Georgia Republican Sen. Johnny Isakson. The bills died in committee last year.

Jackson and his son, Shane, the company’s president, have supported Price with donations to his campaign and joint fundraising committee, which contributes to Republican campaigns. Since 2011, Jackson and his son, have contributed at least $43,000 to Price’s campaign or a joint fundraising committee with $35,000 arriving last January.

A spokeswoman for Jackson said Price’s bill would not have affected his company since, in practice, it already regarded its doctors as contractors, as did the government.

But Sean Ebner, president of another major traveling doctor company, said the measure would have eliminated the possibility of a surprise tax bill.

“The designation of who’s an independent contractor can change state by state,” Ebner, who heads Staff Care, said in an interview. “[The bill] removes ambiguity, which would be positive.”

Influence with the FDA

If confirmed as HHS secretary, Price would oversee many of the rules and regulations and bottlenecks that regularly draw howls from the medical industry. He would also have authority over the FDA, which regulates pharmaceuticals. The agency may soon have purview over a company that Price has personally invested in.

The Australian firm Innate Immunotherapeutics reported in an annual report that it plans to bring its key Multiple Sclerosis drug to the FDA for approval. Several months ago, Price purchased between $50,000 and $100,000 worth of stock in the company, according to a routine financial disclosure required of Congress members.

The FDA is also currently mulling another regulatory issue that could make or break the company of a top contributor. Parker H. “Pete” Petit, along with his family has contributed $35,900 to Price’s campaign and leadership PAC since 2010. Petit also was finance chair for Trump in Georgia and, with his family, contributed $125,000 to the president-elect’s PAC.

Petit is the CEO of MiMedx, a Georgia biotech firm in Price’s district, which has contested a decision from the FDA on some products to aid wound healing.

In August 2013, the FDA concluded in a letter that the products, which consist of discarded placentas and amniotic fluid, should be regulated since their manufacturing constituted manipulating human tissue. The FDA letter sent MiMedx stock tumbling and spurred a securities lawsuit filed in federal court in Georgia. The case accused MiMedx of misleading investors by downplaying the gravity of the FDA’s scrutiny. A nearly $3 million settlement was reached in April.

Petit has acknowledged seeking congressional help on the issue, without being specific. The FDA said it couldn’t comment on the matter. MiMedx did not return calls.

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.