Bush Administration Officials Testify Regarding Foster’s Medicare Claims
Bush administration officials on Thursday told members of the House Ways and Means Committee "they had acted legally" in ordering CMS chief actuary Richard Foster to withhold from Congress his analysis that the Medicare legislation would exceed its target spending goal, the Philadelphia Inquirer reports (Pugh, Philadelphia Inquirer, 4/2). Earlier in the week, committee Democrats used a little-known rule that allows the minority party to request more witnesses to be called to force committee Chair Bill Thomas (R-Calif.) to schedule a follow-up to last week's hearing in which Foster testified. Foster told committee members that as early as June, he shared with Doug Badger, President Bush's health policy adviser, and James Capretta, associate director of the Office of Management and Budget, his higher cost estimates for the Medicare legislation. According to OMB estimates released after Congress passed the legislation, the Medicare law will 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 former CMS Administrator Tom 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. HHS Secretary Tommy Thompson has requested that the department's Office of Inspector General look into the issue, and 18 Senate Democrats have asked the General Accounting Office to look into Foster's allegations. Further, Democrats on the Senate Finance Committee have sent committee Chair Chuck Grassley (R-Iowa) a letter requesting that the committee hold a hearing on the reasons that Congress did not receive OMB's estimates. In addition, Sens. Hillary Rodham Clinton (D-N.Y.), Edward Kennedy (D-Mass.), Frank Lautenberg (D-N.J.) and Debbie Stabenow (D-Mich.) have sent Attorney General John Ashcroft a letter requesting a Department of Justice investigation into whether Bush administration officials violated two federal criminal laws prohibiting the withholding of certain information from Congress (California Healthline, 3/31). GAO will conduct a joint investigation with the HHS OIG, GAO spokesperson Jeff Nelligan said (Philadelphia Inquirer, 4/2).
During Thursday's hearing, Leslie Norwalk, CMS acting deputy administrator, and Jeff Flick, a former aide to Scully and the San Francisco regional director of CMS, "largely confirmed earlier reports" regarding their interactions with Foster, CongressDaily reports (Rovner, CongressDaily, 4/2). According to the Los Angeles Times, Norwalk said that after Foster consulted her for advice, she told him that "while his office was not legally required to share information with Congress, the office was subject to Scully's authority" (Kemper, Los Angeles Times, 4/2). Norwalk, who is an attorney, said that HHS lawyers agreed with the advice she gave Foster (Philadelphia Inquirer, 4/2). Flick told the panel that he sent Foster an e-mail "on Mr. Scully's orders ... warning him not to release his figures without Mr. Scully's authorization and saying that 'the consequences of insubordination are very severe,'" the New York Times reports (Stolberg, New York Times, 4/2). Flick said that Scully "emphasized that if Rick does not adhere to these instructions, it is outright insubordination and insubordination carries serious consequences." He added that Scully's "actual language may have been more colorful" (Los Angeles Times, 4/2). While Flick said during the hearing that "there was a good bit of e-mail traffic" and "some faxes back and forth" between Congress and CMS regarding the Medicare estimates, he could not name any member of Congress who was privy to those documents (New York Times, 4/2). Flick told committee members that Scully ordered Foster to withhold one cost estimate on a part of the bill requested by Democrats, saying that Scully "was concerned that some of the information requested had to do with provisions no longer in the bill," the Washington Times reports (Fagan, Washington Times, 4/2).
Scully and Badger, "the two key personalities in the scandal," declined to appear before the House panel, CongressDaily reports (CongressDaily, 4/2). White House Counsel Alberto Gonzales sent a letter Wednesday to Thomas saying that on Badger's behalf, he would "respectfully decline the invitation." Gonzales, citing "a long-standing White House policy," said that "aides who are exempt from Senate confirmation are also exempt from being required to testify before Congress, so that they may feel free to give the president unfettered advice," the Times reports (New York Times, 4/2). Scully also sent Thomas a letter declining to appear before the panel, saying, "[U]nfortunately, for the past 10 days I have been traveling" (Los Angeles Times, 4/2). In the letter, Scully said that he dealt with Foster "openly and fairly during my entire tenure" (New York Times, 4/2). Scully wrote that he thought Foster felt "he was free to make decisions about when or how to respond to congressional inquiries relating to cost estimates generally, and in particular, the Medicare reform bill," and "[s]imply put, I disagreed." Scully said, "[T]here is no question whatsoever that I made it very clear to Mr. Foster, both directly and indirectly, that I, as his supervisor, would decide when he would communicate with Congress" (Philadelphia Inquirer, 4/2). Scully's letter notes that Foster in his testimony to the committee last week "admitted that my position was accurate as a matter of law" (CongressDaily, 4/2). Scully did not address the allegation that he threatened to fire Foster if the actuary shared his analysis with legislators (Philadelphia Inquirer, 4/2).
Rep. Charles Rangel (D-N.Y.) on Thursday offered motions to subpoena Badger and Scully to testify in front of the panel. However, Republicans "immediately moved to table" the motions in a vote along party lines of 23-16, CQ Today reports. Thomas said that there was no legal necessity for subpoenas, adding, "Compelling them to appear when what they did was legal ... would verge on abuse of power" (Schuler, CQ Today, 4/1). Thomas added that he would not consider seeking a subpoena "to get information that members wanted only out of curiosity," the Inquirer reports. Rep. Sander Levin (D-Mich.) said, "There was a cover-up of this information and we want to know how high up the cover-up went" (Philadelphia Inquirer, 4/2). A suggestion by Rep. Lloyd Doggett (D-Texas), who called the hearing a "sham," to move the hearing to a time when Scully could attend, was also shut down by Republicans. According to CQ Today, Rep. Jim McCrery (R-La.) "expressed frustration with Democrats' questions." He said, "This is a lot about politics. We have spent enough time on it" (CQ Today, 4/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.