The nominee to lead the U.S. Health & Human Services Dept., Rep. Tom Price (R-Ga.), reportedly bought shares in Zimmer Biomet (NYSE:ZBH) just days before introducing a bill to delay a program designed to change the way large joint implants are paid for; after the vote, the orthopedics giant’s political action committee donated to Price’s re-election campaign.
Price, a physician who is chairman of the House budget committee and a member of the House ways & means panel, introduced the “Healthy Inpatient Procedures Act” March 23, 2016. The bill, HR 4848, would delay and suspend the Centers for Medicare & Medicaid Services program to shift the business model for hip and knee implants from fee-for-service to an outcomes-based model. The Comprehensive Care for Joint Replacement program bundles payments for the replacements to cover from hospital admission to 90 days after discharge. Price’s bill, which was sent to the health subcommittee March 30, 2016, would also reduce and rescind funding Congress appropriated for the Prevention & Public Health Trust Fund.
The problem is that Price acquired between $1,001 and $15,000 worth of ZBH shares a few days before filing the legislation, which would be a boon to Warsaw, Ind.-based Zimmer Biomet. Price is slated for a Senate confirmation hearing tomorrow.
“It clearly has the appearance of using your influence as a congressman to your financial benefit,” Larry Noble, general counsel at watchdog group the Campaign Legal Center, told CNN. “If he believed in the bill, he should not have purchased the stock.”
The Trump transition team said late yesterday that the stock purchases including the ZBH buy were made by a broker and that Price was unaware of them until April of last year. Price pledged last week to divest his shares in all healthcare-related stocks, including his stake in Zimmer Biomet, if he’s confirmed as HHS secretary.
“Any effort to connect the introduction of bipartisan legislation by Dr. Price to any campaign contribution is demonstrably false,” Trump spokesman Phil Blando said. “The only pattern we see emerging is that Senate Democrats and their liberal media allies cannot abide by the notion that Dr. Tom Price is uniquely qualified to lead HHS and will stop at nothing to smear his reputation.” he said.
Minority leader Sen. Chuck Schumer (D-N.Y.) called for a probe by Office of Congressional Ethics into whether Price violated the 2012 Stock Act, a law designed to combat insider trading in Congress.
“The President-elect claims he wants to drain the swamp, but Congressman Price has spent his career filling it up,” Schumer said in prepared remarks.
Material from Reuters was used in this report.