Medicare actuary details threats over estimates

Medicare chief actuary Richard Foster told lawmakers Wednesday he had shared his higher estimate of the cost of the Medicare prescription drug bill with White House, Health and Human Services and Office of Management and Budget officials, but Democrats angered by the administration's suppression of that higher price tag did not find the "smoking gun" they were seeking in the controversy.

In testimony before the House Ways and Means Committee, Foster for the first time discussed publicly how Thomas Scully, the former director of the Centers for Medicare and Medicaid Services (CMS), threatened to fire him if he responded to requests by members of Congress seeking cost estimates of the Medicare bill that Congress passed last year.

The Congressional Budget Office had estimated the new law would cost $395 billion, while Foster's tally was $534 billion. Many conservatives resisted the bill, and others were only convinced to support it by promises that it would not top $400 billion.

House Ways and Means ranking member Charles Rangel, D-N.Y., said if Foster's estimate had been made public, the bill would have died. "You would not have had the votes to pass this if the cost of the bill was known," he said. As the bill was being crafted, Foster said his estimated price tag fluctuated but remained between $500 billion and $600 billion.

Foster said he reminded Scully of conference report language in the 1997 Budget Act that established the Medicare actuary as an independent office given the task of providing Congress with "prompt, impartial ... information."

But Scully dismissed that language in "unprintable" terms, Foster said. "The polite version was that the conference report meant nothing," he added.

After consulting an HHS lawyer who advised him that Scully did have the authority to prevent him from sharing his analyses, Foster said he determined to remain at the agency despite what he thought were Scully's "inappropriate ... unethical" demands.

HHS Secretary Tommy Thompson and incoming CMS Administrator Mark McClellan have told him he is now free to respond to requests from members of Congress, he added.

House Ways and Means Chairman Thomas downplayed the importance of the CMS estimates and defended Foster's role. Thomas said he had two telephone conversations with Foster, one last June and the other during the 1997 debates over the Budget Act.

In both cases, Thomas said he was responding to allegations that Foster's work was being suppressed. "I supported you then, and I support you now," he said. "It does not mean that I'm going to agree with your estimates."

Thomas said he believes the drug bill will cost much less than Foster's estimate, due to savings he thinks will result from preventive care measures included in the new law.

Under the new law, all new Medicare enrollees will get a physical exam aimed at identifying illnesses or conditions that may later prove more serious -- and more expensive. In the CMS estimate, "all they are, are costers," Thomas said. "No one believes that."

Meanwhile, a group of congressional Democrats wrote to Attorney General John Ashcroft suggesting that officials at OMB, the White House and HHS may have committed criminal violations by threatening Foster.

Naming Scully and other "officials who may have participated in the suppression" of Foster's estimates, the Democrats asked the Justice Department to consider whether they committed criminal obstruction or made fraudulent claims.

The letter was signed by Senate Health, Education, Labor and Pensions ranking member Edward Kennedy of Massachusetts and Sens. Frank Lautenberg of New Jersey, Hillary Rodham Clinton of New York and Debbie Stabenow of Michigan.

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