Hospital’s owners paid lobbyists as tax bill rose
The parent company of United Medical Center, which has received about $100 million from D.C. taxpayers in recent years, continued paying big fees to its cadre of lobbyists last year even as millions of dollars in local and federal taxes went unpaid at the Southeast Washington hospital.
Specialty Hospitals of America, a for-profit company based in New Hampshire, paid at least $300,000 to the lobbying firm Carmen Group, according to local and federal lobbying disclosure reports. The expenditures came at a time when the finances of United Medical Center were becoming increasingly dire, public records show.
Last year, for instance, the Internal Revenue Service placed a lien for more than $3.8 million for unpaid payroll taxes against Capitol Medical Group, which is owned by Specialty Hospitals. Those weren’t the only unpaid bills.
Other bills included about $160,000 in water and sewer charges and separate liens by contractors Dominion Mechanical Contractors and Hitt Contracting Inc., which said they hadn’t been paid hundreds of thousands of dollars each for construction and other work at the hospital.
The financial problems have D.C. officials considering auctioning off the hospital as early as next month, just a few years after it emerged from bankruptcy under previous owners.
Vanessa Dixon, a local health care organizer at the D.C. Health Care Coalition who has long favored having a public hospital in Washington, said the lobbying expenditures don’t make sense to her when so many other bills are piling up.
“It’s a case of misplaced priorities,” Ms. Dixon said. “Lobbying is a luxury. It’s not clear to me what they’re doing with their money.”
According to disclosure reports, the lobbyists for the company petitioned Congress as well as officials in the U.S. Centers for Medicare & Medicaid Services, and the D.C. government on reimbursement issues.
Executives at Specialty Hospitals say the money spent was well worth it. The cost of retaining the Carmen Group, at $25,000 per month, ultimately helped to ensure millions of dollars of increased funding for the hospital, officials said.
Jim Rappaport, chairman of Specialty Hospitals, said one example of the firm’s work came after the previous hospital owner, Envision Hospital Corp. in Arizona, failed to provide federal regulators with required surveys, prompting the Centers for Medicare & Medicaid Services to reduce federal funding to the hospital.
“Carmen Group was able to convince CMS that [the hospital] should not be punished for Envision’s failure and was able to overturn the decision,” Mr. Rappaport said. “This effort means an additional $3-4 million revenue over five to six years to the hospital.”
In addition, he said, the lobbying firm helped in a separate issue to increase funding from $4.8 million to $12 million in connection with uncompensated care services. The Carmen Group declined to comment on its work for the company.
“They had the contacts and the professional expertise to handle it in a much more expedited manner than we did at the time,” Mr. Rappaport said of the lobbyists’ hiring.
Still, financial problems loom.
Citing tax and other unpaid bills, the D.C. government filed court papers in April in a move to take over United Medical Center, which was formerly known as Greater Southeast Community Hospital, and is the only hospital east of the Anacostia River.
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