HHS chief requests probe of Medicare employee's allegations

Health and Human Services Secretary Tommy Thompson, noting "there seems to be a cloud over our department" in light of recent reports and allegations concerning its handling of the new Medicare law, moved Tuesday to answer at least some of the complaints and requests aimed at him from Capitol Hill.

In a hastily scheduled, hour-long briefing with reporters, Thompson said he has asked the HHS inspector general to investigate allegations made late last week by Chief Medicare Actuary Richard Foster that former Medicare Administrator Thomas Scully threatened to fire him if he shared the administration's higher estimates for the Medicare bill with members of Congress.

Thompson also said he is planning to release those estimates to the numerous Congress members who have been asking for them. "They are being accumulated now," he said.

But he also defended his department's actions as completely proper and lashed out at Democrats who are suggesting otherwise. "I think [the new Medicare law] is going to be very well received, but right now it's being demagogued by everyone who can," Thompson said.

Thompson also took the offensive in regard to a "video news release" sent out by the department as part of its effort to educate the public about the new law. The VNR includes a fully produced segment narrated by Karen Ryan, who HHS officials called "a freelance journalist, not an actor," as was suggested in a story Monday in the New York Times. The VNR's production company, Home Front Communications, said it had hired her to read a script prepared by the government.

The General Accounting Office announced Monday night it is examining the videos to determine if they violate a federal ban on the use of taxpayer funds for propaganda. An earlier GAO examination of HHS television ads and a flier for beneficiaries found they contained "omissions" but were not so political as to be illegal.

At the briefing, HHS Assistant Secretary for Public Affairs Kevin Keane showed a strikingly similar video produced in 1999 by the Clinton administration on its plan "to strengthen and modernize Medicare," which also included a fully narrated segment. "It's much more overt than anything we have done," said Thompson.

Keane said with regard to the GAO inquiry, "We have a box of tapes from the previous administration we'll be submitting."

Thompson took pains to distance himself from the colorful and often outspoken Scully, who has left the department to take a job in the private sector.

As to Scully's refusal to let Foster share his estimates with Congress, Thompson said, "I have no restrictions on his dealing with members of Congress. Tom Scully did, but Tom Scully is no longer here."

When asked if he should have supervised Scully more closely, Thompson replied: "You all know Tom Scully. Do you think that would have been possible?"