Law Firm Quits Political Intelligence Work After Senator’s Query

The law firm being questioned by a U.S. senator over whether one of its lobbyists obtained and shared confidential government information on Medicare rates will no longer work with so-called political intelligence firms.

Greenberg Traurig LLP has “concluded that providing government relations services to an entity in the ‘political intelligence’ area may lead to misunderstanding and unintended use of those services, even when compliant with legal and ethical standards,” Jill Perry, a firm spokeswoman, wrote in an e-mail. “We will not represent such firms in the future.”

Mark Hayes, a Greenberg Traurig lobbyist, discussed the possibility of a rate change in an April 1 e-mail sent to Height Analytics LLC, a Washington-based investor firm that provides analysis and information about government decisions, a business known as political intelligence. In turn, Height advised its clients in a memo that helped boost insurer stocks 45 minutes prior to the official Medicare announcement.

Senator Charles Grassley, an Iowa Republican, is probing whether government information was leaked. Last week both the health insurer Humana Inc. and Height said they were cutting ties with Greenberg Traurig after Grassley announced he was reviewing the situation.

According to an e-mail review by Bloomberg, Hayes told Height that “very credible sources” had said the government would reduce a payment cut for Medicare Advantage plans like Humana’s. Grassley has pushed for a law that would require those who seek profitable tidbits of information to register with the government.

Height Response

Height has said it did nothing wrong. “Our report was based on careful and close analysis of the facts, and was solid, sound research in accordance with applicable laws and regulations,” Andrew Parmentier, Height’s managing partner, said in an April 17 statement to the firm’s clients. “Our analyst made an independent call based on multiple data points and he was correct on the big issue.”

Greenberg Traurig said it, too, hadn’t found evidence of any illegal activity.

“The firm and its shareholders had no financial connection with Height’s activities and Height has acknowledged using a variety of sources before issuing its alert,” Perry wrote. “We have found no information that any of our shareholders had access to any material confidential government information.”

Medicare Advantage Plans

Medicare Advantage plans are those offered by private insurers with different benefits and costs than the traditional Medicare health coverage for the elderly and disabled. The government sets the rates the insurers are paid.

WellCare Health Plans Inc., another Medicare insurer, also employs Greenberg Traurig. The Tampa, Florida-based carrier is “following Senator Grassley’s review of Greenberg Traurig closely, and we are evaluating potential next steps regarding our future relationship with the firm,” Jack Maurer, a spokesman, said in an e-mail last week.

The Centers for Medicare and Medicaid Services, which oversees the insurance program, has also said it’s reviewing the situation.

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