Medicare Compliance & Reimbursement

CMS actuary says he was threatened with firing if he released numbers.

Chief Medicare actuary Richard Foster says he believes the White House was involved in threats to fire him last year if he revealed analyses showing that Medicare legislation would cost substantially more than the $395 billion over 10 years projected by the Congressional Budget Office.
 
It was well known during last year's Medicare debate that Foster's shop at the Centers for Medicare and Medicaid Services thought the bills being debated by the House and Senate would be more expensive than CBO was indicating. However, had Foster's specific estimates -- including one that put the cost in the mid-500 billion dollar range over ten years -- been more widely circulated, it could have vastly complicated the task of holding onto enough cost-conscious House Republican conservatives to pass the legislation. As it was, the House passed its version of the bill by a single vote in the summer of  2003, and then passed the conference report only after furious lobbying by GOP leaders reversed apparent defeat in an unprecedented three-hour vote.

Foster's statements about White House involvement complicate the administration's apparent strategy of blaming former CMS Administrator Tom Scully, and Scully alone, for any inappropriate pressure on Foster and for withholding information from Congress.

"Tom Scully was running this, and Tom Scully was making those decisions," Department of Health and Human Services Secretary Tommy Thompson said at a March 16 briefing called by HHS to air its version of events. Thompson said that, with one exception, he never even saw any of the CMS actuaries' estimates until Dec. 23 or 24, weeks after President Bush had signed the Medicare bill into law.

HHS Chief of Staff Scott Whitaker added that he had reprimanded Scully, who as CMS administrator developed a reputation for being brilliant but also impulsive, after reading reports last summer that Scully had threatened to fire Foster. "I called Tom, as I had the job of doing from time to time, to remind him that those types of threats were not appropriate," Whitaker said.

Foster Suspects White House

Foster has alleged that Scully threatened him with dismissal on several occasions if he responded to congressional information requests. The chief actuary told the Washington Post in a March 18 interview that, while he could not prove the White House had a role in Scully's restrictions on him, several conversations led Foster to believe that the administrator was acting on instructions from above. "I just remember Tom being upset, saying he was caught in the middle. It was like he was getting dumped on," Foster said.

Foster said he believed Scully was referring to pressure from senior White House policy analyst Doug Badger, because Badger was the administration official most involved in negotiations with Congress over the Medicare bill and was extremely familiar with analyses produced by Foster's shop. White House spokesperson Trent Duffy told the Post that Badger said he did not "in any way ask anyone to withhold information from Congress or pressure anyone to do the same."

Scully has vehemently denied threatening to fire the actuary, but has acknowledged telling Foster not to respond to one request for information from Cybele Bjorklund, a senior aide to Rep. Pete Stark (CA).

The Wall Street Journal published a June 20, 2003, e-mail from Scully aide Jeffrey Flick warning Foster not to provide that information. "Tom [Scully] was very explicit -- do not share information ... with anyone else until Tom Scully explicitly talks with you," Flick warns Foster in bolded text, adding that "the consequences of insubordination are extremely severe."