ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, January 29, 1996 TAG: 9601290105
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
For insurance giant Blue Cross Blue Shield, the government's budget crisis provided a golden opportunity.
Its lobbyists quietly attached something they wanted to the stopgap spending bill Congress approved Friday. The section they added would exempt the insurer from a ban on lobbying by nonprofit enterprises that do business with the federal government.
To get the change made, however, Blue Cross had to lobby for it, which it technically was prohibited from doing after Jan. 1, when the ban took effect.
So the unpublicized provision also retroactively absolves Blue Cross for the lobbying it did after the first of this year.
Rep. David Skaggs, D-Colo., complained that Blue Cross was getting special treatment because it has ``a lot of resources and a lot of wealth and influence around this place.'' The exemption should be extended to other nonprofit groups as well, he said.
Rep. David Obey, D-Wis., called it ``a case of the squeaky wheel getting the grease.''
A Blue Cross lobbyist, speaking only on condition of anonymity, said the insurer's position is that the bill simply fixed a legislative glitch that was never intended to penalize the insurer.
The scrambling began two months ago, after the House and Senate passed a law tightening up the disclosure of lobbying activities for the first time in nearly 50 years.
Tucked away in that law was a provision added by Sen. Alan Simpson, R-Wyo., providing that any tax-exempt group that engages in lobbying may not receive a federal ``award, grant, contract, loan'' or other money.
Simpson's target was the American Association of Retired Persons, which he contends lobbies for programs on Capitol Hill, then wins federal grants to carry out those programs - in effect using taxpayer dollars to get more taxpayer dollars.
What Simpson didn't realize was that state Blue Cross associations would also be caught by the provision, because they are organized as nonprofits and have contracts to process Medicare claims and to provide health insurance for federal workers. Many other health maintenance organizations also would be affected.
Simpson sought to fix the mistake, but was stopped in the House by Democrats who saw the Blues' plight as leverage to get other nonprofit groups from under the lobbying ban.
According to those involved in the campaign:
Blue Cross turned next to anyone who would listen in the House leadership, including Rep. Bill Thomas, R-Calif., with whom the insurer already had close ties because of their work together on Medicare. Thomas is a senior member of the Ways and Means Committee, which has jurisdiction over the federal health insurance program for the elderly.
Lobbyists hired by the insurer also contacted Speaker Newt Gingrich, R-Ga., and his staff; House Republican Conference Chairman John Boehner, R-Ohio; Skaggs; and Obey, the senior Democrat on the Appropriations Committee.
Blue Cross and its California affiliate have given Thomas $9,000 in campaign contributions over the past two years, according to figures from the Center for Responsive Politics, a campaign finance watchdog.
``I had told them, `You've got to prove to me that this is a real problem,''' Thomas said. That became clear when Blue Cross showed him a Jan. 16 letter from federal regulators notifying them they would come under the lobbying ban.
Early last week, Thomas approached Appropriations Committee Chairman Bob Livingston, R-La., to ask whether an exemption for Blue Cross could be attached to the stopgap spending bill.
The bill was an ideal vehicle for such a narrow ``rifle shot'' provision because it was regarded as must-pass legislation. The provision was added to the bill's language, but when Livingston's committee issued a three-page summary of the bill, it left out mention of the Blue Cross fix.
Thomas said it didn't make sense to place Blue Cross under the lobbying ban because the insurer is in a unique position. While the state Blue Cross associations have nonprofit classification, they are tax-paying businesses.
And any changes could threaten administration of health benefits for Medicare recipients and federal workers, he said.
``It's an arm's length business transaction,'' unlike federal grants to other nonprofits, Thomas said.
LENGTH: Medium: 83 linesby CNB