Former CMS Administrator Tom Scully Should Have To Return Half of Salary, GAO Says
Former CMS Administrator Thomas Scully should be required to repay about half of his $145,600 salary for last year because he "improperly" ordered Medicare's chief actuary to withhold from Congress information about the cost of the new Medicare law, according to a formal legal opinion issued Tuesday by the Government Accountability Office, the Philadelphia Inquirer reports (Pugh, Philadelphia Inquirer, 9/8). The GAO report was requested by Sen. Frank Lautenberg (D-N.J.) and 19 other Democrats (Schuler, CQ Today, 9/7). Earlier this year, chief Medicare actuary Richard Foster said that Scully prevented him from informing Congress of cost estimates for the Medicare legislation (Sherman, AP/Boston Globe, 9/8).
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 was 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 had 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 legislation.
The HHS Office of Inspector General in July concluded in part that Scully "broke no law" when he repeatedly ordered Foster to withhold the cost information (California Healthline, 7/7).
In May, a separate investigation by the Congressional Research Service concluded that Scully's actions "trampled on the intent of a 1912 statute that says a federal employee's right to communicate with Congress may not be impeded," the Inquirer reports. The CRS report also said that Scully's actions likely did not merit prosecution (Philadelphia Inquirer, 9/8). The investigations were launched at the request of congressional Democrats, who have said that Congress might not have approved the Medicare legislation if members had been aware of the higher cost estimates during negotiations over the legislation, according to CongressDaily (Heil, CongressDaily, 9/7).
According to the opinion, Scully blocked Foster from releasing the cost estimates on five occasions between June and December 2003. With Foster's estimates, "Congress would have had better information on the magnitude of the legislation it was considering and its possible effect on the nation's fiscal health," the opinion says (Philadelphia Inquirer, 9/8).
Lawyers for HHS and the Department of Justice have said that the 1912 law "violate[s] 'executive privilege,' the constitutional separation of powers and the president's right to control communications with Congress," the New York Times reports. However, GAO in its legal opinion, however, rejected that argument, calling Scully's actions "a prime example of what Congress was attempting to prohibit" when it outlawed "gag rules." Further, the information regarding the cost estimates was neither classified nor privileged, according to GAO (Pear, New York Times, 9/8).
In the opinion, based on previous investigations' conclusions, Anthony Gamboa, GAO's general counsel, says that a 1998 federal law prohibits government agencies from paying federal officials who prevent other employees from communicating with Congress. Gamboa adds that in writing the law, "Congress intended to advance two goals: to preserve the First Amendment rights of federal employees and to ensure that Congress had access to programmatic information from frontline employees" (Lee, Washington Post, 9/8).
The opinion recommends that HHS recover the salary paid to Scully after he first ordered Foster to withhold the estimates (New York Times, 9/8). However, GAO did not specify how HHS should recover the money (CQ Today, 9/7). Laura Kopelson, a GAO spokesperson, said, "This is the first time we have been asked to rule on this point of law" (New York Times, 9/8). Because it is a legislative agency, GAO cannot force HHS, an executive branch department, to comply with its recommendations, according to the Inquirer. The Inquirer reports that if Democrats do not call for further inquiries, GAO's legal opinion is "likely to end a messy episode that tainted one of President Bush's top domestic-policy accomplishments" (Philadelphia Inquirer, 9/8).
Lautenberg said that Foster "needs to pay back his salary, as [GAO] has ordered," adding, "He and others in the Bush administration must be held accountable" (CQ Today, 9/7). He said, "This was a corruption of the process at the highest levels. ... What is still unclear is who in the Bush White House ordered Mr. Scully not to reveal this information" (Washington Post, 9/8).
Democratic presidential nominee Sen. John Kerry (D-Mass.) said the GAO opinion is evidence that the "Bush administration broke the law by covering up the true cost of their phony Medicare bill" (New York Times, 9/8).
Rep. Pete Stark (D-Calif.) added, "The Bush administration illegally gagged the chief actuary and withheld legitimate information needed to inform last year's Medicare debate. An honest debate would have led to a very different law" (Philadelphia Inquirer, 9/8).
Sen. Edward Kennedy (D-Mass.) said that the GAO opinion "affirmed what should have been obvious all along," adding, "The Bush administration illegally withheld information about the true cost of the Medicare bill from Congress for political purposes" (Washington Post, 9/8).
Scully, who now works in the private sector, called the GAO report "a joke" and said it was motivated by "election-year politics" (CQ Today, 9/7). He said that his actions were motivated by a desire to help the public and Medicare beneficiaries. He added that he will not return the salary because he is "not required to." Scully said, "It's a matter of principle. I never did anything wrong, and I am proud of every minute of my three years" at CMS (New York Times, 9/8).
Foster said, "To me, the important thing is that Congress should be able to get technical information when they consider legislation. The GAO certainly seems to support that concept" (Philadelphia Inquirer, 9/8).
The Bush administration on Tuesday said that it is "unconstitutional for Congress to compel the disclosure of data over objections from the executive branch," the Times reports.
HHS spokesperson William Pierce said the department would not seek to recover the money, saying that Scully had "acted within his legal authority" (New York Times, 9/8). He added, "The facts are that the executive branch is responsible for the operation of the federal government. It's no surprise that GAO, which is an arm of Congress, would come down with a decision supporting the perspective of the legislative branch in this matter. ... This is all being pushed by what we think is pure political motivation, mostly by members of Congress who opposed the prescription drug bill" (Washington Post, 9/8). The GAO opinion is available online. Note: You must have Adobe Acrobat Reader to view the opinion.
NPR's "All Things Considered" on Tuesday reported on the GAO opinion. The segment includes comments from Lautenberg, Pierce, Scully and Stark (Rovner, "All Things Considered," NPR, 9/7). The complete segment is available online in RealPlayer. In addition, APM's "Marketplace" on Tuesday reported on the GAO opinion and increased Medicare premiums. The segment includes comments from Robert Hayes, president of the Medicare Rights Center, and John Palmer, a Medicare trustee and a professor at Syracuse University (Palmer, "Marketplace," APM, 9/7). The complete segment is available online in RealPlayer.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.