Legislative Minions

IRC 501(h) and 4911 were enacted in 1976 in effort to provide working details to the prohibition against substantial lobbying in IRC 501(c)(3).  I bet the folks at Mayo Clinic know all about it because they are currently engaged in some high stakes direct and maybe grassroots  lobbying in an effort to kill a couple of bills floating around in the Minnesota Legislature.  The Minnesota Reformer broke the story:

Mayo Clinic has given Gov. Tim Walz and state lawmakers an ultimatum over two bills that aim to increase nurse staffing levels and rein in health care costs: Gut the bills or the nonprofit hospital will pull billions in planned investments out of the state.  In an email to DFL legislative leaders and Walz’s office on Wednesday, a Mayo Clinic executive said the non-profit is reconsidering its plans for new facilities and infrastructure that are “four times the size of the investment in U.S. Bank Stadium” — a $1.1 billion project. And their decision is “time sensitive” and will be made in a matter of days.

I can’t find the email anywhere, but the Minnesota media is reporting lots of snippets that make it entirely clear Mayo ain’t just playing the radio.  Mayo Clinic has an exciting project called “Destination Medical Center” that promises to pump billions into the local and state economy in an effort to make the Twin Cities area the Silicon Valley of health care:

Destination Medical Center

Destination Medical Center (DMC) is a unique 20-year economic development initiative. The $5.6 billion plan is the largest in Minnesota’s history. With the expansion of Mayo Clinic and DMC growth, Rochester is a global destination for health and wellness and so much more.

In 2013, state officials determined there was a compelling interest to authorize public investments in Rochester to help support Mayo Clinic in Rochester as a global medical destination center. These leaders worked together to develop DMC and create in statute the financing tools and public governance structure necessary to carry out the global destination vision.

With more than $5 billion in projected private investments over the next 20 years, DMC will provide the public financing necessary to build the public infrastructure and other projects needed to support the vision.

But then Mayo got wind of the hardly related or even consistent bills [one bill is about cost containment, the other about hiring more nurses, I’m just sayin] and spoke up, according to Minnesota Public Radio, in no uncertain terms:

According to emails obtained by MPR News, and first reported by the Minnesota Reformer, the health care organization told DFL leaders, as well as the governor’s office on Wednesday that unless there are major changes to the Keeping Nurses at the Bedside Act and the Health Care Affordability Board, it will move its investments — which could total billions — elsewhere.

Mayo Clinic is currently pursuing several investments in the state, including the development of a “Destination Medical Center” — a multi-billion-dollar project aimed at revamping the city of Rochester, where the health giant is located.

“Our Board was set to move forward to consider this investment next week. Because these bills continue to proceed without meaningful and necessary changes to avert their harms to Minnesotans, we cannot proceed with seeking approval to make this investment in Minnesota. We will need to direct this enormous investment to other states,” said Kate Johansen, vice chair of external engagement at Mayo, in the email.

DFL stands for “Democratic-Farm-Labor” party, I’m told, and apparently the state’s version of center left has such a hold on the Minnesota legislative body that Mayo didn’t even bother to copy the Republicans.  But Mayo ain’t mincing words.  Exempt us now, minions!  

The Keeping Nurses by the Bedside Act would require hospitals to create committees made up of nurses and other staff to determine staffing plans and workload requirements. In the email, Mayo proposed a significant amendment to the bill that would make it exempt from those requirements.  “For Mayo to move forward with the investment above, the bill must include a path to full exemption from the bill’s requirements for systems, including Mayo’s full system in Minnesota, that meet high standards as demonstrated by use of a software-based acuity tool incorporating nurse input, achievement of Magnet designation and/or critical access hospital designation,” the email said.  The bill has been a major focus for the Minnesota Nurses Association, which called Mayo’s email “blackmail tactics.”  “This desperate move by executives at Mayo Clinic Health System makes clear exactly why this bill is needed at Mayo facilities, and at every hospital in the state,” said MNA President Mary Turner.  Meanwhile, Mayo said the Health Care Affordability Board bill should be removed in its entirety, calling it “extremely problematic.”

The Health Care Affordability Board, and an accompanying advisory council, would monitor health care market trends and provide recommendations and oversight. The legislation says the board would aim “to protect consumers, state and local governments, health plan companies, providers, and other health care system stakeholders from unaffordable health care costs.” “It must be removed from the HHS omnibus bill and consideration for Mayo to move forward with the previously stated investment,” per the Mayo email.

You can pretty much find anything on the internet, these days, but I can’t find the email the media has apparently seen and confirmed.  That suggests Mayo wasn’t trying to be loud, exactly, but also didn’t mind if the email became public.  It needed to be heard.  Or maybe Mayo leaked it to one source extracting a promise not to publish the email itself.  It seems like a shrewd, if not last ditch effort at direct and indeed grass roots lobbying to stop the bills.  I mean, come on, is Mayo really gonna “unass the area” if the bills pass?  Seems pretty stupid.  Mayo’s heft is so substantial, by the way, that state legislators hardly reacted with even sheepish indignation in defense:

The bill’s author, Rep. Liz Reyer, DFL-Eagan, said she’s making revisions to the bill but hasn’t received much feedback from any hospital representatives.  “It would have been nice to hear concerns after the bill was introduced in February. It’s not like it’s not been public,” Reyer said. “We could’ve had a lot of productive conversations.”  Reyer said a number of other states have created similar boards and pointed to Massachusetts, which has reported lower-than-average growth in commercial health care costs.

Of course, there is no substantial lobbying foul if the cost of the email — if that be the proper measure — does not exceed the nontaxable lobbying or grassroots nontaxable amounts.  And I am not sure that the email would be within the “self-defense” exception.  Here is 56.4911-2(c)(4):

[Not a lobbying communication if] The communication is an appearance before, or communication with, any legislative body with respect to a possible action by the body that might affect the existence of the electing public charity, its powers and duties, its tax-exempt status, or the deductibility of contributions to the organization, as set forth in §53.4945-(2)(d)(3): 

If every law regulating the number of nurses at patient’s bedsides is covered than nonprofit hospitals might never be engaged in lobbying.  The second bill might portend pricing pressure on nonprofit hospitals but at this point all it does is establish an advisory board.  Hardly life-threatening to a hospital.  The absence of a board might be life-threatening to patients but shut up, we aren’t concerned with patient care right now. 

I’d say the Mayo folks should try decaffeinated.  But then, negative changes can be creeping and incremental so maybe its appropriate Mayo should respond by throwing down gauntlets.    There were probably all sorts of private conversations for months and years about the legislation (something the cost of which can’t be measured objectively enough to ever really enforce) and Mayo is tired of pussyfooting around.  I would also say don’t expect to see more nurses in Mayo hospitals or a cost containment advisory panel in Minnesota any time soon.  

darryll jones