This story also appeared in .

The CEOs of many key health care trade groups earned big bonuses in 2009, when the congressional debate over health legislation dominated their agendas.

While the bonuses suggest that member companies were pleased with the performance of their Washington advocates, the battle over the law isn’t over, and the well-rewarded CEOs and lobbyists face new challenges. There’s ferment in some groups: PhRMA replaced departed CEO Billy Tauzin in 2010 with former Business Roundtable CEO John Castellani and five of the largest members of America’s Health Insurance Plans are considering creating a separate coalition from the trade group, even as they remain members of the organization.

Chart: CEO Pay 2008-2009

Overall, the chief executives were paid well: Nine of 12 health care trade associations paid their CEOs compensation of $1 million or more, including bonuses, deferred compensation and other benefits, according to tax records for 2009. (Tax-exempt groups must file annually with the IRS on a form 990, which is available to the public. The data typically lags a year.) Lobbyists at the associations received compensation in the range of $250,000 to more than $1 million.

“This was an industry that was facing a bet-the-farm debate, so that is why you see these executives get paid the big money,” said Ivan Adler, a principal at the head-hunting firm  McCormick Group.

Chart: Lobbyist Pay 2009

Most of these compensation packages were approved by boards of the trade associations in 2008, before the big health care battle, and the pay levels for some executives were lower in 2009 than in 2008. It’s increasingly common that these packages include base pay, plus a bonus and deferred compensation as incentives to key association staff to meet financial, advocacy and other goals specific to associations.

“There is no one formula [for] association compensation,” said Nels Olson, managing director of at head hunting firm Korn/Ferry. “But one that is relevant here is advocacy, given the health care debate in Washington.”

Tauzin, the former CEO of PhRMA, is among those who received a bonus. On top of his base pay of $2.1 million, he was awarded a $2.3 million bonus. James Bryant Hall, PhRMA’s top federal lobbyist after Tauzin, received a bonus of $91,750 on top of his $371,182 base pay.  Another key health care player, Scott Serota, CEO of Blue Cross and Blue Shield Association, earned a bonus of $1.6 million on a base salary of $856,055, and BCBSA chief lobbyist Alissa Fox received a $130,000 bonus plus base pay of $278,760. Chip Kahn, CEO of the Federation of American Hospitals, received a base salary of $900,000 and a bonus of $315,000, while Jeff Cohen, one of the group’s top lobbyists, earned $325,000 in base pay and a bonus of $65,000.

PhRMA was among the advocacy winners when the law passed in 2010. The group agreed to discount the costs of brand-name prescription drugs for seniors hit by the “doughnut hole,” a compromise estimated to cost the industry about $80 billion. In turn, the industry received concessions from the White House that included a promise that the bill would not permit the reimportation of cheaper drugs from Canada. Hospitals were also winners. Even though they face cuts in Medicare reimbursements, the expansion of insurance coverage will reduce the number of uninsured seeking care in coming years.

Health insurers had a mixed record. They successfully beat back an effort to include a public health insurance option and stand to get millions of new customers from the requirement that nearly all Americans buy insurance. But the sector was demonized by the Democrats and the White House, and insurers fear the mandate isn’t strong enough to entice healthy people to buy insurance.

Now the groups’ leaders must wrestle with Republican vows to kill or change legislation, and the legal threat to the constitutionality of a critical provision requiring most Americans to carry insurance.

“Did they earn their pay?” said Adler of McCormick Group. “I think the question is still open because we don’t know what Congress and the courts are going to do next.”

To be fair to the executives and lobbyists in the accompanying graphic, there are some important caveats. They didn’t get all of that money in their paychecks. Deferred compensation programs are financial incentive packages that vest over time, but still must be reported to the IRS on an annual basis. For example, former AARP chief executive Bill Novelli’s 2009 compensation included a base salary of $345,243; a $1.2 million payment that included deferred compensation from his 8-year tenure at AARP and severance of $350,657; $35,362 in retirement and deferred compensation and $4,209 in nontaxable benefits. Novelli left AARP in April 2009 and was replaced by A. Barry Rand, whose total compensation was $648,640.

An association can decide to rescind compensation. In 2006, Craig Fuller, the former CEO of the National Association of Chain Drug Stores, left the organization when it became clear he and the organization’s board wanted to pursue different strategies. He left before his deferred-compensation plan vested. As a result, $1.12 million that had been set aside for him was returned to the association.

This <a target="_blank" href="/news/health-care-executive-pay/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Howard Cohen, president of the health care lobbying firm HC Associates, is the latest from K Street who plans to return to Capitol Hill, according to several health care industry sources. Cohen is a former chief counsel to the House Energy and Commerce Committee when Republicans were in charge of the House and he will be returning to the committee to work on health care policy now that the GOP is back in power. He will also be working on the Energy and Commerce Oversight and Investigations Subcommittee. Rep. Fred Upton, R-Mich., will be the new chairman of the full committee; Rep. Cliff Stearns, R-Fla., .

Cohen has long been considered a go-to person on health care policy on K Street and has represented a number of clients that will have interests before the committee in 2011. This year he was registered to lobby for America’s Health Insurance Plans, Amgen, Federation of American Hospitals, Genzyme, Group Health Cooperative, Health Net and PhRMA, according to the Senate Office of Public Records. Cohen will likely be taking a big pay cut to return to the Hill. The first nine months of 2010, Cohen’s clients paid him $810,000, according to lobbying records.

Cohen will join lobbyist , who will become staff director of the energy and commerce panel. Andres most recently was vice chairman of one of D.C.’s largest lobbying firms, Dutko Worldwide. , most recently head of government affairs for the Advanced Medical Technology Association, is heading to Capitol Hill to become policy director to incoming House Speaker John Boehner, R-Ohio.

Cohen and the Energy and Commerce Committee spokesman couldn’t be reached for comment.

This <a target="_blank" href="/news/gop-lobbyist-return/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Five of the nation’s largest health insurance companies are taking a key step toward building their own inside-the-Beltway coalition to influence implementation of the new health law and congressional efforts to change it. The companies – Aetna, Cigna, Humana, UnitedHealthcare and Wellpoint – are shopping around Washington for a public relations firm to represent them, according to a source familiar with their work. Public Strategies and APCO are among PR firms that have spoken with the insurers, the source said.

“They plan to go public,” the person said. “They spent a ton of money [in 2009 on lobbying and the election] and liked being influential and they don’t want that to go away.”

For months there have been rumors the companies might abandon their trade group, . But industry sources say they aren’t. 

What exactly the group hopes to achieve isn’t entirely clear. Humana’s spokesman would only say that it doesn’t plan to leave AHIP. Officials with the other four companies could not be immediately reached. In November, Cigna CEO David Cordani and Aetna CEO Mark Bertolini both publicly stated at a that they are opposed to halting progress on implementing the health law, but thought the law could be improved.

Several industry observers said the companies want their own “subcommittee” within AHIP to influence the group’s political and policy choices in 2011. “I think some of the companies felt the small and non-profit company interests were getting more attention within AHIP and they wanted to make sure their interests were considered too,” said one health insurance executive whose company is a member of AHIP. “I think this is just about normal tensions within trade associations.”

Others speculated that the health insurers were seeking a way to reestablish ties with congressional Republicans, who were angered that the companies, via AHIP, worked with the Obama administration for much of 2009 on health care legislation. As recently disclosed 2009 tax documents show, AHIP quietly gave $86.2 million to the U.S. Chamber of Commerce, which became one of the of the Democrats’ health care plans.

AHIP’s CEO Karen Ignagni declined to comment on the five insurers forming their own coalition.

AHIP’s political action committee donations tilted heavily to Republicans in the 2010 election cycle, with 59 percent of its $201,000 in direct PAC contributions going to GOP congressional candidates and 40 percent to Democrats, according to a Center for Responsive Politics analysis of Federal Election Commission records, as of Dec. 8.

Even as the insurers work to build relationships with Republicans, they are in a delicate political situation. The Democrats still run the Senate and the White House and the health law is safe from repeal at least until after the next presidential election in 2012.

Chris Jennings, president of Jennings Policy Strategies, said insurers don’t want to act in a way that will make them political targets by congressional Democrats and the Obama administration and risk “more aggressive implementation [of the law] in ways they don’t want to see, so they have to be careful.”

This <a target="_blank" href="/insurance/big-health-insurers-seek-to-boost-dc-influence/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

This story also appeared in .

The CEOs of many key health care trade groups earned big bonuses in 2009, when the congressional debate over health legislation dominated their agendas.

While the bonuses suggest that member companies were pleased with the performance of their Washington advocates, the battle over the law isn’t over, and the well-rewarded CEOs and lobbyists face new challenges. There’s ferment in some groups: PhRMA replaced departed CEO Billy Tauzin in 2010 with former Business Roundtable CEO John Castellani and five of the largest members of America’s Health Insurance Plans are considering creating a separate coalition from the trade group, even as they remain members of the organization.

Chart: CEO Pay 2008-2009

Overall, the chief executives were paid well: Nine of 12 health care trade associations paid their CEOs compensation of $1 million or more, including bonuses, deferred compensation and other benefits, according to tax records for 2009. (Tax-exempt groups must file annually with the IRS on a form 990, which is available to the public. The data typically lags a year.) Lobbyists at the associations received compensation in the range of $250,000 to more than $1 million.

“This was an industry that was facing a bet-the-farm debate, so that is why you see these executives get paid the big money,” said Ivan Adler, a principal at the head-hunting firm  McCormick Group.

Chart: Lobbyist Pay 2009

Most of these compensation packages were approved by boards of the trade associations in 2008, before the big health care battle, and the pay levels for some executives were lower in 2009 than in 2008. It’s increasingly common that these packages include base pay, plus a bonus and deferred compensation as incentives to key association staff to meet financial, advocacy and other goals specific to associations.

“There is no one formula [for] association compensation,” said Nels Olson, managing director of at head hunting firm Korn/Ferry. “But one that is relevant here is advocacy, given the health care debate in Washington.”

Tauzin, the former CEO of PhRMA, is among those who received a bonus. On top of his base pay of $2.1 million, he was awarded a $2.3 million bonus. James Bryant Hall, PhRMA’s top federal lobbyist after Tauzin, received a bonus of $91,750 on top of his $371,182 base pay.  Another key health care player, Scott Serota, CEO of Blue Cross and Blue Shield Association, earned a bonus of $1.6 million on a base salary of $856,055, and BCBSA chief lobbyist Alissa Fox received a $130,000 bonus plus base pay of $278,760. Chip Kahn, CEO of the Federation of American Hospitals, received a base salary of $900,000 and a bonus of $315,000, while Jeff Cohen, one of the group’s top lobbyists, earned $325,000 in base pay and a bonus of $65,000.

PhRMA was among the advocacy winners when the law passed in 2010. The group agreed to discount the costs of brand-name prescription drugs for seniors hit by the “doughnut hole,” a compromise estimated to cost the industry about $80 billion. In turn, the industry received concessions from the White House that included a promise that the bill would not permit the reimportation of cheaper drugs from Canada. Hospitals were also winners. Even though they face cuts in Medicare reimbursements, the expansion of insurance coverage will reduce the number of uninsured seeking care in coming years.

Health insurers had a mixed record. They successfully beat back an effort to include a public health insurance option and stand to get millions of new customers from the requirement that nearly all Americans buy insurance. But the sector was demonized by the Democrats and the White House, and insurers fear the mandate isn’t strong enough to entice healthy people to buy insurance.

Now the groups’ leaders must wrestle with Republican vows to kill or change legislation, and the legal threat to the constitutionality of a critical provision requiring most Americans to carry insurance.

“Did they earn their pay?” said Adler of McCormick Group. “I think the question is still open because we don’t know what Congress and the courts are going to do next.”

To be fair to the executives and lobbyists in the accompanying graphic, there are some important caveats. They didn’t get all of that money in their paychecks. Deferred compensation programs are financial incentive packages that vest over time, but still must be reported to the IRS on an annual basis. For example, former AARP chief executive Bill Novelli’s 2009 compensation included a base salary of $345,243; a $1.2 million payment that included deferred compensation from his 8-year tenure at AARP and severance of $350,657; $35,362 in retirement and deferred compensation and $4,209 in nontaxable benefits. Novelli left AARP in April 2009 and was replaced by A. Barry Rand, whose total compensation was $648,640.

An association can decide to rescind compensation. In 2006, Craig Fuller, the former CEO of the National Association of Chain Drug Stores, left the organization when it became clear he and the organization’s board wanted to pursue different strategies. He left before his deferred-compensation plan vested. As a result, $1.12 million that had been set aside for him was returned to the association.

This <a target="_blank" href="/news/health-care-executive-pay/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Howard Cohen, president of the health care lobbying firm HC Associates, is the latest from K Street who plans to return to Capitol Hill, according to several health care industry sources. Cohen is a former chief counsel to the House Energy and Commerce Committee when Republicans were in charge of the House and he will be returning to the committee to work on health care policy now that the GOP is back in power. He will also be working on the Energy and Commerce Oversight and Investigations Subcommittee. Rep. Fred Upton, R-Mich., will be the new chairman of the full committee; Rep. Cliff Stearns, R-Fla., .

Cohen has long been considered a go-to person on health care policy on K Street and has represented a number of clients that will have interests before the committee in 2011. This year he was registered to lobby for America’s Health Insurance Plans, Amgen, Federation of American Hospitals, Genzyme, Group Health Cooperative, Health Net and PhRMA, according to the Senate Office of Public Records. Cohen will likely be taking a big pay cut to return to the Hill. The first nine months of 2010, Cohen’s clients paid him $810,000, according to lobbying records.

Cohen will join lobbyist , who will become staff director of the energy and commerce panel. Andres most recently was vice chairman of one of D.C.’s largest lobbying firms, Dutko Worldwide. , most recently head of government affairs for the Advanced Medical Technology Association, is heading to Capitol Hill to become policy director to incoming House Speaker John Boehner, R-Ohio.

Cohen and the Energy and Commerce Committee spokesman couldn’t be reached for comment.

This <a target="_blank" href="/news/gop-lobbyist-return/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Five of the nation’s largest health insurance companies are taking a key step toward building their own inside-the-Beltway coalition to influence implementation of the new health law and congressional efforts to change it. The companies – Aetna, Cigna, Humana, UnitedHealthcare and Wellpoint – are shopping around Washington for a public relations firm to represent them, according to a source familiar with their work. Public Strategies and APCO are among PR firms that have spoken with the insurers, the source said.

“They plan to go public,” the person said. “They spent a ton of money [in 2009 on lobbying and the election] and liked being influential and they don’t want that to go away.”

For months there have been rumors the companies might abandon their trade group, . But industry sources say they aren’t. 

What exactly the group hopes to achieve isn’t entirely clear. Humana’s spokesman would only say that it doesn’t plan to leave AHIP. Officials with the other four companies could not be immediately reached. In November, Cigna CEO David Cordani and Aetna CEO Mark Bertolini both publicly stated at a that they are opposed to halting progress on implementing the health law, but thought the law could be improved.

Several industry observers said the companies want their own “subcommittee” within AHIP to influence the group’s political and policy choices in 2011. “I think some of the companies felt the small and non-profit company interests were getting more attention within AHIP and they wanted to make sure their interests were considered too,” said one health insurance executive whose company is a member of AHIP. “I think this is just about normal tensions within trade associations.”

Others speculated that the health insurers were seeking a way to reestablish ties with congressional Republicans, who were angered that the companies, via AHIP, worked with the Obama administration for much of 2009 on health care legislation. As recently disclosed 2009 tax documents show, AHIP quietly gave $86.2 million to the U.S. Chamber of Commerce, which became one of the of the Democrats’ health care plans.

AHIP’s CEO Karen Ignagni declined to comment on the five insurers forming their own coalition.

AHIP’s political action committee donations tilted heavily to Republicans in the 2010 election cycle, with 59 percent of its $201,000 in direct PAC contributions going to GOP congressional candidates and 40 percent to Democrats, according to a Center for Responsive Politics analysis of Federal Election Commission records, as of Dec. 8.

Even as the insurers work to build relationships with Republicans, they are in a delicate political situation. The Democrats still run the Senate and the White House and the health law is safe from repeal at least until after the next presidential election in 2012.

Chris Jennings, president of Jennings Policy Strategies, said insurers don’t want to act in a way that will make them political targets by congressional Democrats and the Obama administration and risk “more aggressive implementation [of the law] in ways they don’t want to see, so they have to be careful.”

This <a target="_blank" href="/insurance/big-health-insurers-seek-to-boost-dc-influence/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">