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Political Insider's Lobbying Arrangement Questioned

Jon Lender

Government Watch

3:34 PM EDT, April 20, 2013

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Gray areas and blurry distinctions are so common for the political insiders who lobby state officials and legislators that they often don't even come up for discussion.

Not so with former state Rep. Gardner Wright of Bristol, once a powerful appropriations committee chairman in the state House of Representatives and later chairman of the state's hospital commission in the 1980s under Democratic Gov. William A. O'Neill.

Since February, Wright has had a contract to lobby Connecticut legislators and other officials for a Texas-based company called Fairpay Solutions Inc., which is hired by employers and their insurers to review hospitals' bills to assure they are only paid for actual costs of services they provide to injured employees under the state workers' compensation program. "Fairpay produces 'hard dollar' savings" for icustomers, the company's website says.

Under the lobbying contract, Fairpay agrees to pay a total of $1,500 a month — from February through December — to Wright and another lobbyist, Jim O'Brien.

Now Wright is under attack by lawyers for two hospitals involved in four contested workers' compensation cases — cases in which Fairpay has played a role in trying to limit what employers or insurance companies have paid hospitals.

The details of the contested cases charges are complicated, but the attack on Wright is quite direct: The hospital lawyers point out that Wright is not only the lobbyist for Fairpay, but he's also chairman of the state's Workers' Compensation Advisory Board. It's an unpaid, non-voting position with no binding authority — but, in the hospital lawyers' opinion, it puts him too close to government decision-makers whose actions may affect Fairpay's fortunes.

"Chairman Wright, who is required by statute to be impartial, is in fact the opposite of that: He is being paid to lobby and advise privately his client, Fairpay, about matters relating to the very issue being litigated in this case in front of a panel of [workers' compensation] commissioners who are subject to the Advisory Board's … oversight. It is nothing short of astounding that [lawyers for the four employers and insurers] seek to defend this state of affairs," said legal papers filed last week by lawyers for Lawrence & Memorial Hospital in New London, and William W. Backus Hospital in Norwich.

The hospitals' lawyers aren't alleging any misconduct by Wright, but say in their legal filings that even the "appearance" of impropriety must be avoided.

Those arguments were filed in an effort by the hospitals to remove the four contested compensation cases from a three-member Compensation Review Board that's now considering the matters. The hospitals are asking the review board to hand over the cases directly to the state Appellate Court. Representing the hospitals are the firms of Cowdery, Ecker & Murphy in Hartford, and Tobin, Carberry, O'Malley, Riley & Selinger in New London.

Their opponents – the employers and insurers – are represented by the firm of Wesley W. Horton of Hartford. Horton, in an April 11 legal filing of his own, argued to the review board that Fairpay is a "non-party" in the contested cases, even though it has worked for the parties. "Mr. Wright has only been engaged [by Fairpay to lobby] on matters regarding pending legislation and having no involvement with this [contested] case."

The job of Wright's advisory board, under state law, is to offer a broad range of advice to the Workers' Compensation Commission and its chairman, John Mastropietro. But Horton said Mastropietro "is not adjudicating these cases" (he has "recused" himself from his role as one of the three review board members) and whatever advice the advisory panel has given "is not relevant to this Review Board's role."

Horton added, "Mr. Wright did have conversations with appropriate parties prior to undertaking the [lobbying contract representing Fairpay] and it was properly disclosed under the law."

"This argument appears simply to be motivated by a desire to move the cases to what the [hospitals] perceive to be a better forum" — that is, the appellate court, Horton wrote in an April 11 filing.

Wright, himself, said in an interview last week that there's nothing wrong with what he's doing, adding that when he mentioned his new lobbying contract for Fairpay to Mastropietro, "he didn't object."

Wright said he's been lobbying legislators on the General Assembly's labor committee in favor of a new bill supported by Fairpay. The bill would modify the formula under which hospitals are paid for workers' compensation claims. For decades, the law has called for hospitals to be paid according to the "actual costs" of services they provide, but recent workers'-comp cases have cast doubt on that legal standard.

Now, lawmakers are trying to come up with a consistent way of figuring out hospitals' "actual costs," versus their billed amounts. Over the years, those billings have risen much higher than actual costs, because of the widespread practice in the health care system of discounting and negotiating with insurers.

Wright said that according to public reports that hospitals are required to file, their billings can be three times their actual costs. He said Fairpay has hired him for the expertise he gained in public service that includes his former leadership of the hospital cost commission.

Impartial?

Wright added that when the law mentions "impartial," it applies to the composition of the advisory board, which has four members affiliated with labor and four with management. Those eight choose the "impartial" chairman, he said — and that's been him for more than a decade. "I don't believe that hospital charges are an issue that divide labor and management," Wright said. "Both are interested in keeping costs low" — management, to control their own costs, and labor, to avoid seeing the legislature cut workers' comp rates, as it has in the past.

The ongoing dispute over payments to hospitals by insurers does not affect the injured workers; they don't pay for medical services they receive through workers' comp. In most cases, the hospitals and companies (and/or their insurers) agree on payments. The Workers' Compensation Commission comes into play when they can't agree.

Fairpay has entered the workers' comp arena in recent years by calculating what a hospital's actual costs are and telling them what they'll be paid in behalf of an employer — an alternative to long-term negotiating arrangements that hospitals have had with major insurers. Often Fairpay says an insurer should pay less than half what the hospital wants.

Lawyers for the hospitals note that the lobbying registration forms that were filed with the Office of State Ethics say that Wright could lobby the Workers' Compensation Commission, and executive-branch offices including that of the governor.

But Wright said he's only talked to legislators to provide suggested language for the bill.

The hospitals' lawyers still object. "The … situation is clearly improper," said Mark A. Dubois, an attorney who once served as chief disciplinary counsel for lawyers. "The idea that a litigant or interested party, with matters pending before the Workers' Compensation Review Board and at the legislature, could pay money to the Chairman of the Advisory Board of the Workers' Compensation Commission to lobby the Commission, the Governor and the Lieutenant Governor — individuals and entities which … have the power to affect public policy relating to the very issues in dispute — is so beyond the pale as to hardly bear commenting upon."

Dubois made the comments in an April 15 letter he was retained to write to Robert Tobin, a partner at the New London firm representing the hospitals.

So far the issue has not appeared to hit the Office of State Ethics' radar screen.

In 2000, Mastropietro asked the ethics office whether it would be OK for Wright, already chairman of the advisory board at that time, to also serve as a paid consultant to the Workers' Compensation agency. The answer was yes, according to documents provided to The Courant last week by the state's current ethics director, Carol Carson.

According to a 2000 legal opinion from the ethics office — which then had a different leadership structure — the consulting arrangement was all right because "Mr. Wright is not a public official" subject to the state's ethics code; advisory board members are "specifically exempt" from being considered public officials, the opinion said.

Carson said there's no record that Wright asked her office's advice about his current lobbying arrangement. Wright, himself, told The Courant he did not believe he needed to seek such advice — after disclosing it to Mastropietro and advisory board members, and hearing no objection.

Wright is the father of current Rep. Chris Wright, D-Bristol.

Jon Lender is a reporter on The Courant's investigative desk, with a focus on government and politics. Contact him at jlender@courant.com, 860-241-6524, or c/o The Hartford Courant, 285 Broad St., Hartford, CT 06115 and find him on Twitter@jonlender.