Ted Kennedy Jr.’s health care advisory firm could damage Senate chances

Patrick Howley Political Reporter
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A health care advisory firm run by potential Democratic Massachusetts Senate candidate Ted Kennedy Jr. was the subject of a federal ethics complaint filed by a senior government official who accused the firm of providing its clients insider access to federal government information, according to a report by the Project on Government Oversight. The firm’s conduct may prove a liability for Kennedy in a possible Senate campaign.

Kennedy is considering running in a potential 2013 special election for the Massachusetts U.S. Senate seat currently held by by Secretary of State nominee John Kerry, a friend of the Kennedy family informed Politico Thursday.

“It’s no secret that Ted is interested in entering politics after a long and successful career as a disability-rights advocate and businessman … and it’s fair to say that he will be giving this very serious consideration,” according to the family friend.

But Kennedy’s present career in the private sector might raise concerns during the race.

Kennedy is co-founder and president of the Marwood Group, a “healthcare advisory and financial services firm” with headquarters in New York City and a satellite office in Washington, D.C.

The asset management firm obtains highly exclusive information from inside the federal government for use by its health care investor clients.

According to a May 9 powerpoint presentation delivered by Marwood senior managing director John Kelliher, the company’s corporate clients include “60 healthcare providers, payors, and other healthcare focused corporations,” while its investor clients include “135 private equity firms, lenders, and venture capital firms.”

Marwood now employs Dr. Barry Straube, who left the Obama administration in January 2011 after serving as the chief medical officer for the Centers for Medicare and Medicaid Services (CMS). Straube’s office oversaw “Medicare coverage decision-making” in the United States, and was integral in the implementation of Obamacare.

He now uses his clout and insider information in his new role at the Marwood Group.

A Marwood Group representative, identified as a former CMS employee, arranged a private meeting between CMS senior staffers and five “Wall Street professionals,” according to a 2011 report by the Project on Government Oversight.

The Wall Street executives “probed” the CMS staffers for information as to whether CMS would allow Medicare reimbursement for specific medical devices.

“They got to probe us for hours in private about what we planned to do and how we approached procedures for reimbursing medical devices, the mechanics and psychology of CMS decision-making, in general and with respect to these specific devices,” a CMS “whistleblower” told the Project on Government Oversight in 2011.

A senior CMS analyst was so concerned about the meeting that he or she filed an ethics complaint about the Marwood Group to the Office of Inspector General at the Department of Health and Human Services. It is unclear whether Kennedy was named in the complaint.

Nevertheless, Kennedy’s firm continues to generate concerns.

Straube spoke on behalf of the Marwood Group at the ACG New York Healthcare Conference in 2012, where he shared insider information and revealed some of the Marwood Group’s tactics. (Watch the video here)

ACG New York is described as “the premier association in New York City for middle market dealmaking professionals,” sponsoring 60 events per year that allow its members to network with high-ranking executives like Straube.

“I was at CMS at the time the Affordable Care Act passed and we started working on implementation of that immediately, and the ACO program was one of those,” Straube told the audience.

ACOs, or “accountable care organizations,” are networks of doctors and hospitals that “share responsibility” for providing good health care to Medicare beneficiaries. If they succeed, they also share in financial incentives from the federal government. ACOs were created by a provision in the Obamacare law.

Straube told the private-sector audience that “we’ll have to flip” the evidence base on studies involving medical devices — similar to how the evidence base also needs to be “flipped” on ACOs — in order to convince decision-makers of their worthiness.

“On pharmacy and medical device arenas, I think that there are great opportunities in these areas, but like the hospitals and other people and ACOs we’ll have to flip the salesmanship, I think, and/or the evidence base for medical devices and pharmacology interventions to show how they not only make a person get better quickly on an acute care episode but how they can keep people well for a long period of time, avoid further medical care, and keep them out of high-cost acute care settings,” Straube said.

The Marwood Group did not immediately respond to a request for comment.

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