Obama health ‘czar’ worked at legally troubled health firms

Nancy-Ann DeParle, one of President Obama’s chief advocates for the health care reform bill wending its way through Congress, earned more than $6.6 million as a paid director for health care firms, some of which were targeted in government investigations or whistleblower lawsuits on suspicions of billing fraud and other legal problems.

Five of the companies faced allegations ranging from overcharging Medicare to failing to warn patients of the dangers of their products, according to a study by the Investigative Reporting Workshop at American University and a review by The Washington Times of U.S. Securities and Exchange Commission (SEC) records and Mrs. DeParle’s financial disclosure statement.

Mrs. DeParle, a former top administrator for the agency that runs Medicare and Medicaid, has resigned from her corporate directorships and said she will remove herself from any matters directly involving the companies. According to a handwritten note attached to her financial-disclosure form by an ethics official in June, she also has divested “all conflicting assets.”

But a Washington watchdog group said it plans to monitor the pending health care reform legislation to make sure her new job does not conflict with her prior industry ties.

“We want to look at it to be sure there was no conflict,” said Steve Ellis, vice president of Taxpayers for Common Sense. “We need to look at the end to see who wins and who loses.”

Mrs. DeParle, named in March as director of the White House Office of Health Reform, collected at least $6.6 million from the health care companies since 2001, including directors’ fees and the profits from selling stock that she acquired through options or awards as a director, according to American University’s July study and a subsequent review by The Times. Most of the companies are publicly traded.

Nearly all the companies, whether they had legal troubles or not, have a huge stake in the shape of the pending health care bill. Mrs. DeParle is one of the administration’s key officials helping to push through the legislation.

Her spokeswoman, Linda Douglass, said there was no conflict between Mrs. DeParle’s involvement in health care reform and her past work as a corporate director for the health care companies, where she was not involved in day-to-day operations.

Mrs. Douglass described her boss as a dedicated public servant who sold some of her stocks at a loss and took a pay cut to accept the $158,500-a-year “health czar” job. She said that as a corporate director, Mrs. DeParle pushed for the companies to comply with federal and state regulations and investigations.

“Throughout her professional life, Nancy-Ann DeParle has been known for her integrity, extraordinary hard work and meticulous adherence to ethical guidelines,” Mrs. Douglass said. “Now she is fighting to implement the president’s health insurance reform plan.”

David Axelrod, a senior Obama adviser, also praised what he called Mrs. DeParle’s “honesty and integrity,” saying that during health care reform meetings the two attended, he never saw her “advocate for industry at all” or “try to set policy.”

Before she went into the private sector, Mrs. DeParle was a key health care adviser to President Clinton, running Medicare and Medicaid as administrator of the Health Care Financing Administration (HCFA) from 1997 to 2000. HCFA is now known as the Centers for Medicare and Medicaid Services.

In March, Mr. Obama named Mrs. DeParle and Health and Human Services Secretary Kathleen Sebelius to push his health care plan through Congress after his original choice for both jobs, former Sen. Tom Daschle, South Dakota Democrat, withdrew over questions about his income taxes and his work for the health care industry.

Mrs. DeParle did not have to undergo the Senate confirmation process that Mr. Daschle faced because she is a White House staffer, not a Cabinet officer. She reported $2.3 million in income on her financial disclosure form covering 2008 and through her May 13, 2009, filing.

The companies for which she served as a director include:

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