CMS Did Not Violate Law by Barring Medicare Cost Estimates, HHS OIG Report Finds

[CAL/AAEM News Service]

CMS Did Not Violate Law by Barring Medicare Cost Estimates, HHS OIG Report Finds
 
July 7, 2004 

 
The HHS Office of Inspector General on Tuesday concluded that former CMS Administrator
Tom Scully "broke no law" when he "repeatedly" ordered Medicare chief actuary Richard
Foster to withhold from Congress information about the cost of the Medicare legislation,
the Philadelphia Inquirer reports (Pugh, Philadelphia Inquirer, 7/7). According to Office
of Management and Budget estimates released after Congress passed the legislation, the
Medicare law is projected to cost $534 billion over the next 10 years -- $134 billion
more than estimated by the Congressional Budget Office. Foster has said that the higher
cost projection was known before the final House and Senate votes on the legislation in
November but that Scully told him, "We can't let that get out." In an e-mail to
colleagues at CMS, Foster indicated he believed he might lose his job if he revealed his
cost estimates for the Medicare legislation. Scully has said that he did not threaten to
fire Foster if the higher estimates were released. Scully also said that he "curbed
Foster on only one specific request" made by Democrats at the time of the first House
vote on the Medicare bill (California Healthline, 5/4). 
 
Report Details
The OIG report by Dara Corrigan, acting principal deputy inspector general, says, "Our
investigation revealed that CMS did not provide information requested by congressional
members and staff, and that Scully threatened to sanction Foster if he disclosed
unauthorized information" (Pear, New York Times, 7/7). The report lists eight instances
in which lawmakers requested but did not receive from Foster information about the
legislation, including its cost (Lueck, Wall Street Journal, 7/7). In five of the
instances, Scully "blocked the efforts" of Foster to comply with the congressional
requests about cost, the report says. However, the report states, "Our investigation
failed to produce evidence that criminal statutes were violated in connection with the
failure to respond to congressional requests" (Philadelphia Inquirer, 7/7). The report
adds, "The administrator of CMS has the final authority to determine the flow of
information to Congress" (Heil, CongressDaily, 7/7). However, the report says that if
Scully was still CMS administrator "he might be subject to disciplinary action for
possible violation of the department's standards of ethical conduct" (New York Times,
7/7). 
 
Opposes CRS' Prior Report
OIG's finding that Scully's actions did not violate any laws seems to oppose findings in
an April report by the Congressional Research Service, the Inquirer reports (Philadelphia
Inquirer, 7/7). CRS is a branch of the Library of Congress that provides nonpartisan
analysis and research to lawmakers. In a nine-page April memo to Rep. Charles Rangel
(D-N.Y.), ranking member of the House Ways and Means Committee, CRS said that federal
officials "do not have the right to prevent or prohibit" employees from sharing
information concerning "relevant public policy issues" to members of Congress. Further,
Congress' "right to receive truthful information from federal agencies to assist in its
legislative functions is clear and unassailable," the analysis states. 

According to CRS, since 1912, federal laws have protected federal employees' rights to
communicate with lawmakers, and more recent laws have "reaffirmed and strengthened" those
rights. Jack Maskell, a legislative lawyer at CRS, said that in 1997, when some
legislators felt that the Clinton administration threatened the candor of federal health
experts, House and Senate appropriations conferees wrote into health care legislation
that the CMS Office of the Actuary serves both the administration and Congress. In
addition, the legislation states that the actuary's independence to provide data to
Congress is vital. Thus, Scully's order "would appear to violate a specific and express
prohibition of federal law," according to CRS. However, CRS said that such an act "may
not rise to [the] level of a criminal violation" (California Healthline, 5/4). 
 
DOJ's Attached Opinion
In an opinion attached to the OIG report, the Department of Justice wrote that "CRS was
wrong," the AP/Las Vegas Sun reports (Sherman, AP/Las Vegas Sun, 7/7). Katherine Drews,
associate general counsel at DOJ, wrote that Scully had the right to order Foster to
withhold information -- as long as his directive was "not based upon an invalid or
unlawful reason." According to the Inquirer, the "question Drews weighed was a narrow
one: whether Foster could speak independently of his boss or needed to obey him." She
concluded that Foster's position gave him "freedom from supervision in performing
actuarial duties, not supervision of disclosure of department records or information to
the Congress" (Philadelphia Inquirer, 7/7). 

The OIG report took "no policy position on withholding information from Congress or the
importance of any information that may have been withheld," according to CongressDaily
(CongressDaily, 7/7). To resolve the issue, Corrigan said that she sent her findings to
the General Accounting Office to determine if CMS officials violated the law protecting
federal employees' right to communicate with Congress (New York Times, 7/7). GAO "will be
the final arbitrators of the conflicting opinions," the Inquirer reports. GAO's report is
expected to be released in a few weeks (Philadelphia Inquirer, 7/7). 
 
Responses From HHS, Foster, Scully
HHS spokesperson Bill Pierce said, "The allegation that Scully acted outside of his
authority is, according to the [OIG], not true" (Wall Street Journal, 7/7). Pierce added,
"We hope that with the release of this report we can put behind us the political
squabbling and move on to the important work of implementing the new law" (AP/Las Vegas
Sun, 7/7). Foster said, "My perception remains that Scully withheld that information for
political purposes," adding, "regardless of [Scully's] legal right to withhold it, I
continue to believe that it's wrong and unethical to withhold technical information from
Congress" (Philadelphia Inquirer, 7/7). Scully said, "The tension was and still remains
-- is the CMS actuary part of the executive branch or the legislative branch? My strong
feeling is the actuary works for the executive branch" (Wall Street Journal, 7/7). 
 
Democrats' Reaction
According to CongressDaily, "Democrats greeted the report with outrage, claiming the
[Bush] administration could not fairly investigate the politicized issue" (CongressDaily,
7/7). Rangel said, "The Congress did not have the best information available to make a
judgment on vital legislation. The law is clear we were entitled to this information. We
asked for it. We were not given it" (Kemper, Los Angeles Times, 7/7). Rep. Pete Stark
(D-Calif.) said, "It sounds as though the Bush administration examined itself and found
it did nothing wrong" (CongressDaily, 7/7). Sen. Edward Kennedy (D-Mass.) said, "The
[OIG] report describes the extraordinary deception of Bush administration officials to
cover up the true costs of the Medicare bill. What they did was clearly wrong by any
definition" (AP/Las Vegas Sun, 7/7). Sen. Max Baucus (D-Mont.) said that with the limited
scope of the investigation, "we cannot know about the involvement or knowledge of White
House officials" in suppressing the information (New York Times, 7/7). 
 
Republicans' Responses
Sen. Chuck Grassley (R-Iowa) and some other Republican legislators on Tuesday "repeated
their contention that Congress is bound to consider only" figures prepared by CBO, the
Times reports (Los Angeles Times, 7/7). House Ways and Means Health Subcommittee Chair
Nancy Johnson (R-Conn.) said that the report is a "major embarrassment to Democrats
because it exposes and rejects their partisan motives" (CongressDaily, 7/7). NPR's
"Morning Edition" on Wednesday reported on the OIG report. The segment includes comments
from Robert Blendon, a professor of health policy and political analysis at the Harvard
School of Public Health; Pierce; and Stark (Rovner, "Morning Edition," NPR, 7/7). The
complete segment is available online in RealPlayer at www.npr.org. 


Source: California Healthline (www.californiahealthline.org) 


=====
Cyrus Shahpar & Brian Potts 
Managing Editors, CAL/AAEM News Service 
UC-Irvine



		
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