Room for Favors in 'Cliff' Deal - Company With Ties to Sen. Reid Saw Its Rival's Medicare Payments Slashed
The New Year's Day legislation that averted tax increases for millions of Americans brought an unwelcome surprise for Elekta AB, EKTA-B.SK +0.36%a Swedish maker of radiation tools designed to battle brain tumors.
A provision, inserted at the last minute, sharply cut Medicare payments for the company's product while leaving unchanged those of its direct competitor, Varian Medical Systems Inc., VAR -1.61%of Palo Alto, Calif.
Varian lobbyists pushed for the change, according to congressional staff and other lobbyists, which was put through by Senate Majority Leader Harry Reid (D., Nev.). Under the change, payments for hospital outpatient surgeries using Elekta's technology would drop by 58%, news that knocked the company's stock sharply through early January.