The U.S. House of Representatives Committee on Energy and Commerce this week said it is "in the process of reviewing and receiving" executive compensation and business practice data, including details on conferences, retreats and other events held since 2007, that it requested last month from the largest health insurance companies in the United States.
As "part of an ongoing look at insurance practices and how they use these premium dollars," committee chairman Rep. Henry Waxman, D-Calif., and Subcommittee on Oversight and Investigations chairman Rep. Bart Stupak, D-Mich., asked chief executives of 52 health insurance companies for detailed data on all "conferences, retreats or other events" held since 2007, in addition to compensation and revenue information for the years 2003 through 2008. The committee asked for compensation details on all employees making more than $500,000 annually, as well as for all board members, along with aggregated and market segmented sales, general or administrative expenses, and profits for each company's health insurance products. Some of the data was due by Sept. 4 with the rest by Sept. 14. Targets of the probe include Aetna, Aflac, Amerigroup Group, more than a dozen Blue Cross Blue Shield affiliates, Centene Corporation Group, Coventry Health Care, Cigna Corp., Highmark, Humana, Kaiser Foundation Health Plan, MetLife, United Health Group and WellPoint.
The committee in late August excluded 10 recipients after it determined that the companies sold limited amounts of health insurance. The probe is aimed at health insurance companies with annual premium revenues greater than $2 billion, a committee spokeswoman confirmed. No penalty was cited for failure to comply with the request, but the committee holds subpoena power.
Request For Meeting Data
Specifically, the committee asked for "a table listing all conferences, retreats or other events held outside company facilities from Jan. 1, 2007, to the present that were paid for, reimbursed or subsidized in whole or in part by your company, as well as the purpose of such events and documents sufficient to show the location, number of participants and all expenses incurred, including transportation, lodging, food, entertainment or gifts."
Given the nascent state of strategic meetings management within corporations, gathering such data could prove challenging. That was the case for one company, which asked not to be identified, which only this year began centralizing contracts. To gather its meeting spending since 2007, each business had to request it from "individual event managers and/or administrative assistants who had coordinated the meetings," said the source. Third-party event planners, travel management companies, budgets and purchase orders were also reviewed to compile the response.
PricewaterhouseCoopers assurance director Debi Scholar noted that "companies that have a comprehensive strategic meetings management program in place may be able to" meet the data requirements of the committee. "Meeting management technology is the enabler of the SMMP components and has the ability to capture all of the meeting data requirements," she said. "However, companies also would need to have a mandated policy implemented across all business units and meetings large and small."
Requests for comments to more than a dozen other probe targets and insurance associations went unanswered at press time.
Why Meetings?
Why did the House committee include meetings as part of its inquiry? The committee spokeswoman said the meeting expenditures were simply part of a "whole variety of pieces of information" about expenditures and how the health insurance companies use their premium revenues. Once all data is received, the committee is to review it and "attempt to strike a balance" on portions of responses to disclose, the spokeswoman said. For proprietary or competitive reasons, some of the data may not be publicly available, she noted.
Although the health insurance trade group America's Health Insurance Plans didn't respond to Management.travel's request for comment, spokesman Robert Zirkelbach last month told Politicothat the "investigations are nothing more than politically motivated, taxpayer-financed fishing expeditions designed to intimidate and silence health plans."
Fear Of 'Demonization'
The U.S. Travel Association and the American Hotel & Lodging Association expressed concern that "legitimate business travel throughout the country may suffer another blow due to misinformed demonization." Such concerns "arise from experience earlier this year, when legitimate congressional focus on excesses by companies benefiting from federal assistance used business travel as the face of irresponsible spending," stated a letter sent to the representatives Sept. 1, signed by USTA CEO Roger Dow and AHLA CEO Joseph McInerney.
"We understand today's policy considerations and the political dynamic, but just as there is no excuse for wasteful spending of public funds, there is also no justification for attacking productive business travel and a vital sector of the American economy," the letter stated. "We fully appreciate your responsibilities, but worry that many in Washington may read your recent letter to 52 health insurance companies as license to paralyze our industry."
The economic downturn, combined with the "fear of political and media criticism of legitimate business activities" has cost the industry millions in lost spending, jobs and meetings, USTA said, citing various studies. Several of those studies were commissioned after Congress and the White House called for closer scrutiny of meetings, some held at luxury resorts, by recipients of the Troubled Asset Relief Program.
Push For Model Corporate Code
In their letter, USTA and AHLA attached a slightly revised model corporate code of conduct for approval of meetings, events and incentive travel, as well as its comments on the interim final rule on the TARP Standards for Compensation and Corporate Governance, issued June 15 by the U.S. Department of Treasury.
Aimed at companies that have received federal bailout funds, the TARP Standardsrequire recipient companies by Sept. 14 to adopt, provide to Treasury and post an "excessive or luxury expenditures policy" that includes meetings. Treasury accepted comments on the interim final rules through Aug. 14, but has yet to reveal if it plans to modify or make final the rules. In its comments, USTA urged Treasury to modify and "provide more clarity in its final rule if the meetings marketplace is to be unlocked and the economy is to be strengthened. TARP companies, and their boards, must clearly understand what types of polices are acceptable so that legitimate business travel is encouraged and can again flourish as a crucial part of our nation's economic recovery.
"Encouraging 'normal' business travel is a core purpose of the underlying statute," USTA continued, and the final rule "must provide additional guidance to TARP companies as to how meetings and events are conducted within the normal course of the business operation," USTA stated. "The 'best practices' policy focuses all companies, including TARP companies, on the real purpose of travel expenditures: strengthening the competitive position of the company in the marketplace and positioning the company for the creation of long-term value and growth."
The National Business Travel Association also urged Treasury to adopt the model corporate code of conduct, or at least "comment favorably on the guidelines and type of travel and meetings that they are designed to encourage."