Big health bucks roll in for K St.

K Street expects to reap a new bonanza from the healthcare law even as House Republicans move to repeal the measure on Wednesday. 

Lobbying firms are adding healthcare specialists and new boutique firms are opening to court clients interested in influencing the shape of regulations implementing the law.

ADVERTISEMENT
Nearly a year after healthcare’s passage, there’s little sign of business slowing down. 

“Passing the law is just the beginning of the story in this case. The development of the regulations are hugely important,” said Megan Hauck, a former senior policy adviser to Senate GOP Leader Mitch McConnell (Ky.). 

Hauck is opening her own lobby shop to work on healthcare issues with Melanie Nathanson, a former healthcare adviser to ex-Sen. Bob Graham (D-Fla.), who went on to lead the Glover Park Group’s healthcare practice.  

“This is becoming the Regulatory Lawyer Employment Act of 2011,” said Ivan Adler, a principal at the McCormick Group who recruits lobbyists for firms and trade groups. 

He said lobby shops are looking more and more for those skilled in drafting rules and understanding how federal agencies work to advise clients on the healthcare law.

Those with experience in the regulation-writing process are in particularly high demand, and lawyers and lobbyists who understand the intricacies of the new law will be sought after, Adler said.  

“Whenever you get into the details of the law, those folks who can cross the T’s and dot the I’s will be that much more valuable,” Adler said. 

It’s a gravy train that many expect will continue to boost K Street’s revenue for years because regulators will be weighing new regulations for the mammoth law over the next decade. 

Since Jan. 1, close to a dozen firms and healthcare companies have hired new lobbyists and lawyers or have been formed to lobby on the new law’s regulations, according to a review by The Hill.

The Center for Responsive Politics, a campaign finance watchdog, says the healthcare sector spent more than $391 million on lobbying in 2010. That figure does not include last year’s fourth quarter, which will be reported later this week.

Public advocacy campaigns will be down this year, but K Street lobbyists expect the interest from various healthcare industries in regulations will lead to a busy and lucrative year. 

“We are every bit as active as we were last year for our health-sector clients,” said Andrew Rosenberg, a partner at Thorn Run Partners. “Whether it is pharmaceutical companies, medical device manufacturers or insurers, they are going to have to be just as engaged.”

Several major rules stemming from the healthcare reform law will be proposed by the Obama administration this year.

For example, the law requires the Centers for Medicare and Medicaid Services (CMS) to establish an “accountable care organization” (ACO) program by Jan. 1, 2012. An ACO is a group of healthcare providers that provides care to a group of patients and receives incentives for bringing down costs and providing quality care.

Lobbyists will be keeping an eye on a proposed Health and Human Services Department rule allowing the administration to review “unreasonable” increases in insurance premiums on an annual basis. 

Lobby firms are also staffing up to deal with the new regulations. 

Alston & Bird has hired former Rep. Earl Pomeroy (D-N.D.) and his longtime chief of staff, Bob Siggins, to work in its healthcare practice. 

Ogilvy Government Relations added Mike Hogan, former deputy chief of staff to Sen. Ben Nelson (D-Neb.), and Steve Tilton, a former lobbyist for the Pharmaceutical Research and Manufacturers of America (PhRMA), to its healthcare team. 

Bryant Hall, PhRMA’s former chief lobbyist, has started his own healthcare lobby shop. He’ll be working closely with Andrew McKechnie, a former healthcare policy adviser to Sen. Chuck Grassley (R-Iowa) who was recently hired by Peck, Madigan, Jones & Stewart.

“There are literally going to be years of work on the implementation of the law, whether it takes the form of regulations or changes to the legislation,” said Jeff Peck, a partner at the firm. 

While much of K Street’s healthcare work will be in regulations, lobbyists expect there will be action in Congress to change parts of the law. For example, lawmakers in both parties want to change a provision requiring businesses that buy more than $600 of goods or services annually to file 1099 paperwork with the IRS.

“You might find enough Senate Democrats and even the Obama administration, which has signaled a greater flexibility as of late, to revisit some provisions of the law,” Rosenberg said.

Washington firms will also make money litigating the new law. Several states’ attorneys general have filed lawsuits, and as new requirements come into effect, insurers will likely need legal help to comply with the law or turn to the courts to overturn its statutes.

Mike Cox, the former Republican attorney general for Michigan, said legal battles over the healthcare reform law will be bigger than the settlement the federal government reached with the tobacco industry. 

“As each phase of this law kicks in, assuming it doesn’t get repealed, new things will pop up,” said Cox, now a senior counsel with Dykema, a law firm.

Cox said $250 million in federal funds will be given to state authorities this year to review premium hikes by insurance companies.



“That is going to generate a huge amount of litigation. I expect you are going to see insurance companies go and say, ‘Hey, wait a minute. Why don’t we go lobby to amend the legislation?’ ” Cox said. 

“Clients are looking for a firm that can provide a one-two punch of legislative capabilities and regulatory expertise,” said Rosenberg.