GAO Investigates Decision by CMS Administrator To End Contract With University of Wisconsin Center
Investigators from the General Accounting Office have concluded that CMS Administrator Tom Scully "undermined the integrity" of the Medicare contract process when he banned the administration of a $1.6 million contract with the Center for Health Systems Research & Analysis at the University of Wisconsin after center director David Zimmerman questioned an agency nursing home survey, the AP/Long Island Newsday reports. According to the GAO, Scully on Sept. 27, 2002, told officials at RAND, the prime contractor on a Medicare nursing home survey, that the company could not hire the Wisconsin center to work on the program, although aides to Scully had approved the move earlier in the day. The GAO also said that based on the e-mails of Medicare officials, aides to Scully also "were left with the impression that the research center should be denied additional government work," the AP/Newsday reports. The GAO said that Scully banned the Wisconsin center on Sept. 27 because several days earlier Zimmerman had recommended revisions in the standards used in the nursing home survey. Zimmerman sent the recommendations in a letter several weeks before Scully expanded the survey from a six-state pilot program to a nationwide program. Scully told the GAO that Zimmerman "had worked against consensus and was unwilling to compromise."
"I don't think it is too much to ask the participants in that process not to rip it apart when it is put in place," Scully wrote in an e-mail to Zimmerman, adding, "I am sure your work with us will continue. But the government has no requirement to contract with anyone." In a separate e-mail, Scully wrote, "There is no entitlement to government contracts -- especially when you try to sandbag the agency you contract with." Scully also wrote, "If you want to continue to yank my chain, I will continue to disconnect you from this agency." Although the Scully e-mails do not indicate that the center would not receive future government work, the GAO found evidence in other e-mails that "senior (Medicare) officials intended to exclude the center from other ... contracting opportunities based on their understanding of the administrator's direction." The GAO recommended that HHS Secretary Tommy Thompson, who oversees Scully and CMS, restore work on the nursing home survey to the center and review contract decisions that have affected the center since September 2002 to ensure their validity.
Sen. Charles Grassley (R-Iowa), chair of Senate Finance Committee, which oversees Medicare, wrote in a letter to Thompson, "Action by a high-level government official to unfairly deny a contract or the opportunity to compete for a contract is an intolerable threat to the integrity of the procurement process." However, HHS official Jacquelyn White wrote in response to the GAO investigation, "The [Wisconsin] center, due to the body of work it had performed over the years, had become part of the problem, not the solution." She added that Scully "never instructed his staff to prevent the Wisconsin center from receiving more government work," although his aides "may have been left with that impression," the AP/Newsday reports. Scully yesterday said that he would not comment on the GAO investigation (Margasak, AP/Long Island Newsday, 8/4).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.