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Foster: White house had role in withholding medicare data

Richard S. Foster, the government's chief analyst of Medicare costs who was threatened with firing last year if he disclosed too much information to Congress, said last night that he believes the White House participated in the decision to withhold analyses that Medicare legislation President Bush sought would be far more expensive than lawmakers knew.
Richard S. Foster, the government's chief analyst of Medicare costs who was threatened with firing last year if he disclosed too much information to Congress, said last night that he believes the White House participated in the decision to withhold analyses that Medicare legislation President Bush sought would be far more expensive than lawmakers knew.

Foster has said publicly in recent days that he was warned repeatedly by his former boss, Thomas A. Scully, the Medicare administrator for three years, that he would be dismissed if he replied directly to legislative requests for information about prescription drug bills pending in Congress. In an interview last night, Foster went further, saying that he understood Scully to be acting at times on White House instructions, probably coming from Bush's senior health policy adviser.

Foster said that he did not have concrete proof of a White House role, but that his inference was based on the nature of several conversations he had with Scully over data that Congress had asked for and that Foster wanted to release. "I just remember Tom being upset, saying he was caught in the middle. It was like he was getting dumped on," Foster said.

Foster added that he believed, but did not know for certain, that Scully had been referring to Doug Badger, the senior health policy analyst. He said that he concluded that Badger probably was involved because he was the White House official most steeped in the administration's negotiations with Congress over Medicare legislation enacted late last year and because Badger was intimately familiar with the analyses his office produced.

The account by Foster, a longtime civil servant who has been the Medicare program's chief actuary for nine years, diverges sharply from the explanations of why cost estimates were withheld that were given this week by White House spokesmen and Health and Human Services Secretary Tommy G. Thompson. They suggested that Scully, who left for jobs with law and investment firms four months ago, had acted unilaterally and that he was chastised by his superiors when they learned of the blocked information and the threat.

Two days ago, Thompson told reporters: "Tom Scully was running this. Tom Scully was making those decisions." Thompson said the administration did not have final cost estimates until late December predicting that the law would cost $534 billion over 10 years, $139 billion more than the Congressional Budget Office's prediction. Foster has said his own analyses as early as last spring showed that the legislation's cost would exceed $500 billion.

Last night, White House deputy press secretary Trent Duffy said, "It is my understanding that Mr. Badger did not in any way ask anyone to withhold information from Congress or pressure anyone to do the same." Duffy said he asked Badger this week whether he had done so and that Badger replied he had not. Duffy said that Badger was traveling last night and was unreachable to comment. Calls to his home were not returned.

Foster suggested the White House had been involved as new details emerged of the manner in which he had been threatened. The actuary released an e-mail, dated last June 20, from Scully's top assistant at the time regarding one GOP request and two Democratic requests for information about the impact of provisions of the Medicare bill on which the House would vote a week later.

In a bold-faced section of the three-paragraph note -- reported in yesterday's Wall Street Journal -- Scully's assistant, Jeffrey Flick, instructed Foster to answer the Republican's question but warned him not to disclose answers to the Democratic queries "with anyone else until Tom Scully explicitly talks with you -- authorizing release of information. The consequences for insubordination are extremely severe."

The warning came in response to an e-mail Foster had sent to Scully that same Friday afternoon, 22 minutes earlier, in which he said the three questions "strike me as straightforward requests for technical information that would be useful in assessing drug and competition provisions in the House reform package." Foster offered in that e-mail to show Scully his proposed replies in advance.

Flick, who now oversees the Medicare agency's regional office in San Francisco, did not return several phone calls.

Scully was out of town and did not respond to efforts to reach him via e-mail last night. He said in an interview this week that he and Foster had disagreed over how helpful an executive branch employee needed to be to Congress. He called it "a separation of powers issue."

In 1997 budget legislation, Congress sought unsuccessfully to require the Medicare actuary to respond to all of its requests. Such language was included in a conference report on the bill but does not carry the force of law.

Foster said that the e-mail was the only instance in which he had been explicitly threatened in writing, but that "there were other instances in which Tom in an e-mail or just over the phone would clearly be unhappy and would say less formally something to the effect, 'If you want to work for the Ways and Means Committee, I can arrange that.' "

The actuary said that in June 2001, shortly after Scully arrived, he directed Foster to send weekly reports of any requests for information he had received from Capitol Hill or elsewhere in the administration.

Congressional Democrats yesterday called for the General Accounting Office to investigate the episode. Thompson announced Tuesday he had ordered HHS's inspector general to conduct an inquiry.
Bush takes offensive on Foster 31.Mar.2004 22:06


Rattled that the controversy over Medicare scoring shows no signs of waning, the Bush administration has shifted strategies and now is going after the actuary at the center of what some have called "Scoregate."

After playing defense on the issue, the administration is firing back and criticizing comments made by Richard Foster, Medicare's top actuary.

Foster recently made headlines by suggesting that the White House may have been involved in keeping his estimates of the new Medicare law under wraps.

A Bush administration official suggested this week that it was irresponsible for Foster to make such assertions without proof. The official added that actuaries must support their cost estimates with a clear rationale, but maintained that Foster's claims about the White House were based on sheer speculation.

In what some are predicting will be great political theater, Foster is scheduled to testify today before the House Ways and Means Committee on his new long-range projections for the Medicare system. Democrats are expected to grill him about the administration's role in suppressing cost estimates.

As Democrats won political points by charging that the administration had concealed Medicare estimates, the administration initially adopted a defensive strategy by calling for an inspector general's investigation and disavowing actions by Tom Scully, then chief of the Centers for Medicare and Medicaid Services (CMS).

But the strategy failed to douse the controversy, and some say it gave the administration's political opponents more material to work with. Some GOP lobbyists have urged the administration to stop retreating and go on the attack.

Meanwhile, Health and Human Services (HHS) Secretary Tommy Thompson said this week that he does not believe the White House interfered, and that he didn't see Foster's score of the drug bill until Dec. 24, 2003.

HHS officials also maintain that Democrats are revising history by saying that they asked for Foster's estimate of the entire legislation. They do acknowledge that scoring requests were made for certain parts of the bill but not for the entire measure.

Democrats strongly deny this claim, maintaining that they asked repeatedly for Foster's score of the entire bill. After the bill passed, Foster's estimate of $534 billion over 10 years was leaked to the press. The Congressional Budget Office publicly had projected the bill's cost at $395 billion.

Democrats and some Republicans contend that the Medicare bill would not have passed if Foster's estimates had been made public. It is not clear exactly when Foster made his estimate.

After distancing themselves from Scully, HHS officials are using some of his arguments. Scully recently said that he had the right to keep Foster's numbers from Congress because he had direct authority over Foster, a CMS employee.

Democrats point to a 1997 law that seeks to make the Office of the Actuary independent, but HHS officials like Scully note that Foster is part of the executive branch and that he reports to the CMS chief.

At today's hearing, House Ways and Means Committee Chairman Bill Thomas (R-Calif.) is unlikely to let Democrats' claims about the numbers go unanswered.
"Thomas is certainly not going to roll over," a healthcare expert said.

Administration officials and some Capitol Hill aides say they are surprised that the Scully-Foster controversy which began earlier this month has continued to escalate.

At a press conference last week, HHS aides attempted to downplay the story. They mentioned allegations dating back to last June that Scully threatened to fire Foster if he disclosed his scoring estimates to Congress. Several aides said that despite various recent articles in the media relating to Scully's alleged threat, "there was no new news."

While there were media reports in June about these allegations, Foster was not talking to the press at that time, and politically damaging e-mails on the issue had not yet surfaced.

Many healthcare lobbyists say the administration's first attempt at damage control badly missed its mark. At the outset of a March 16 briefing with reporters,

Thompson said there was a dark cloud over the department because of the Scully-Foster flap. When asked to elaborate on the remark near the end of the press conference, Thompson denied having made the statement.

Editorials and articles in various newspapers and magazines have lambasted the Bush administration's handling of the Medicare estimates. Newsweek said it represents a clear example of "dishonesty and corruption." The Salt Lake Tribune said Medicare has transformed from a plus in the president's reelection campaign into a liability. The Miami Herald reported that "the bill has become a nightmare for [the] GOP."

It is unclear whether the Medicare scoring controversy will be an issue in this fall's presidential election, but lobbyists say administration officials are nervous. HHS officials have expressed optimism that when they unveil their new drug discount card program this summer, seniors will be less skeptical of the bill.

The scoring estimate controversy comes in the wake of allegations that Rep. Nick Smith (R-Mich.) was offered a bribe to vote for the bill, triggering congressional and federal investigations. In the last couple of weeks, new CMS head Mark McClellan's confirmation was held up as lawmakers demanded more information from the administration on the reimportation of drugs. Meanwhile, conservative Republicans such as Rep. Dan Burton (R-Ind.) continue to criticize the new Medicare drug law publicly.