Saturday, March 13, 2004

Cost analyst: Ordered to skew Medicare figures

The nation's top Medicare cost analyst confirmed Friday that his former boss, Thomas Scully, ordered him to withhold from lawmakers unfavorable cost estimates about the Medicare prescription drug bill. He said the estimates exceeded what Congress seemed willing to accept by more than $100 billion.

Richard Foster, the chief actuary at the Centers for Medicare and Medicaid Services, said Friday night that he received a handwritten note from Scully, then the centers' administrator, in early June ordering him to ignore information requests from members of Congress who were drafting the drug bill.

Mr Foster apparently was threatened by the loss of his job if he responded to requests by members of congress:

Foster said Scully insisted upon a pattern of withholding of information.

"Estimates that were supportive of the legislation were generally released and estimates that could be used to criticize the legislation were generally not released," Foster said.

Give the figures that have come out since the bills passage, Mr. Foster's cost estimates were accurate:

Knight Ridder reported Friday that Foster's Office of the Actuary suggested that the drug benefit would cost at least $100 billion more than the $395 billion estimated by the Congressional Budget Office, whose job it is to project costs of legislation. One projection prepared in early June by Foster's office and obtained by Knight Ridder concluded that a Senate version of the bill might cost as much as $551 billion.......When Bush signed the bill in December the drug benefit bore a $395 billion price tag. In January, the president's budget director, Joshua Bolten, upped the estimate by $139 billion.

Congress now seems ready to leap into action:

In a grim-faced floor speech Friday, Daschle called for reopening the vote on the drug benefit. He also called for an investigation into the firing threat and assertions that the administration had withheld its cost estimates from Congress.

"Whether this is criminal or not is a matter we will certainly want to clarify," Daschle said. "But if not criminal, it was certainly unethical. And I think we need to know the facts."

A group of House Democrats concurred, asking that the Health and Human Services Department's inspector general investigate the matter.

I don't think that Congress would take the drug benefit away during an election year. It will be interesting to see how this plays out. Some, myself included, want to know "What did the President know, and when did he know it?"

Foster said he believed higher-ranking members of the administration than Scully knew of the higher cost estimates that his office had computed.

"Did the president know? Did (Health and Human Services) Secretary Tommy Thompson know? I don't know," Foster said.
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