HHS' inspector general's office concluded that former CMS Administrator Tom Scully did pressure CMS Actuary Richard Foster to withhold from congressional Democrats the true cost of a Medicare reform bill, but the inspector general's office also concluded that Scully did not commit criminal violations, Modern Healthcare has learned. The bill became law in December 2003. Foster estimated that the Medicare Modernization and Prescription Drug Act would cost $524 billion over 10 years, not the $395 billion the Bush administration was projecting. The administration later conceded that Foster's higher estimate was essentially correct. The inspector general's office concluded that Scully threatened Foster with dismissal if Foster shared his estimate with congressional Democrats, who had repeatedly requested the information. Disclosure of Foster's estimate could have thwarted passage of the bill, because more than a dozen Republicans had said they would not approve legislation with a price tag exceeding $400 billion.
The inspector general's office is expected to release a report on its findings during a briefing this afternoon with Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.). Scully left the CMS earlier this year to join the Washington law firm Alston & Bird. Sources close to the investigation said since Scully was no longer a federal employee, the inspector general would not recommend administrative action against him. In May, the Congressional Research Service reached similar conclusions. At deadline, attempts to reach Scully at his home and offices were unsuccessful. Officials at HHS and the inspector general's office declined to comment, and Grassley was not available. -- by Mark Taylor