IG: Medicare officials withheld costs but didn't break law

Medicare officials withheld information requested by members of Congress about the cost of the Medicare prescription drug bill and threatened to fire the chief Medicare actuary if he disclosed those figures, according to an internal Health and Human Services Department probe, but the investigation determined Medicare officials broke no laws.

The report by the HHS inspector general is the latest chapter in an ongoing controversy over the Medicare bill and the tactics the administration used to build support for it in Congress. The issue came to a boil when the administration revealed its $535 billion estimate of the bill only after Congress -- whose own number-crunchers estimated it would cost $385 billion -- passed it narrowly last year.

The report concluded Thomas Scully, then-administrator of the Centers for Medicare and Medicaid Services, threatened to fire chief CMS actuary Richard Foster if he shared cost estimates for the Medicare bill with members of Congress. But Scully or other officials did not break any laws in doing so, the report found.

"The administrator of CMS has the final authority to determine the flow of information to Congress," the report stated. And since Scully has left the administration, no further action is needed, the report concluded.

Democrats greeted the report with outrage, claiming the administration could not fairly investigate the politicized issue. "It sounds as though the Bush administration examined itself and found it did nothing wrong," said House Ways and Means Health Subcommittee ranking member Fortney (Pete) Stark, D-Calif.

House Ways and Means Health Subcommittee Chairwoman Nancy Johnson, R-Conn., called the report "a major embarrassment to Democrats because it exposes and rejects their partisan motives."

The report cited six separate requests by members of Congress or their staffs that Medicare officials did not meet. The Balanced Budget Act of 1997 requires congressional access to Medicare's actuarial staff, a provision Republicans included to gain better access to the actuary's data. But the inspector general report stated HHS officials have the right to ban their employees from divulging information to lawmakers, citing a Justice Department opinion on the matter.

That conclusion refutes a Congressional Research Service memo issued in April, contending Scully likely broke the law in blocking Foster from sharing information with Congress. The matter also is being investigated by GAO.

Johnson noted the CRS report was written before either of the two Ways and Means Committee hearings held on the issue.

The IG report stated it took "no policy position on withholding information from Congress or on the importance of any information that may have been withheld."

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