Bush Administration Threatens Own Staff over Medicare Estimates

From those Commies over at the Wall Street Journal


March 18, 2004 5:36 a.m. EST


Read the e-mail exchange between Richard Foster and Jeffery Flick.


Medicare's Chief Actuary
Reveals E-Mail Warning


Directive Says 'Work Up The Numbers';
Notes 'Consequences for Insubordination'
By DAVID ROGERS
Staff Reporter of THE WALL STREET JOURNAL
March 18, 2004 5:36 a.m.; Page A4

WASHINGTON -- Medicare's chief actuary was warned last year that he could be accused of "insubordination" if he shared information with Congress about a White House-backed prescription-drug bill without the approval of his politically appointed superiors, according to e-mails he has made public.

The June 20 directive to Medicare actuary Richard Foster came in an e-mail from the top aide to Thomas Scully1, then the administrator for the health-care program. "Work up the numbers and share them with Tom Scully only. NO ONE ELSE" reads the message from Jeffery Flick, the last portion in bold-faced capital letters. A second warning, also in bold-face, follows in the same message: "The consequences for insubordination are extremely severe."xx

Mr. Scully, now a private consultant in Washington, has denied he threatened to fire the actuary, whose office has traditionally been a source of independent assessment of Medicare costs. He didn't return several calls Wednesday.

But Mr. Foster says in an interview that after receiving that message he was much more hesitant to share information. He agreed this week to provide a copy of the previously private e-mail exchange to The Wall Street Journal to explain why he wasn't more forthcoming last year about his estimates of the cost and impact of the legislation.

Those estimates are a growing election-year problem for the White House. Before the bill was passed last November, proponents, including the administration, relied on Congressional Budget Office estimates saying the expected cost of the new benefit would be less than $400 billion over 10 years. Since then, the White House has admitted that its own numbers show the costs will be closer to $534 billion.

That has outraged conservatives in Mr. Bush's own party, as well as Democrats, who accuse the administration of misleading them to win a major legislative priority for the president. While Republican leaders say the feud is overblown, no one doubts that release of the higher cost estimates last fall could have killed the measure, which only passed by one vote after hours of arm-twisting in the House in November.

Hoping to contain the damage, Health and Human Services Secretary Tommy Thompson this week asked the department's inspector general to begin an inquiry. But the firestorm shows no sign of quickly disappearing, and is being fanned by a bitter presidential campaign in which both Mr. Bush and Democratic opponent John Kerry have challenged the other's personal credibility.


Against this background, House Ways and Means Committee Chairman Bill Thomas (R., Calif.) has signaled that Mr. Foster may testify publicly next week before his panel, where the actuary is sure to be questioned on the matter. Democrats are demanding to know more about any communications between Mr. Scully and the White House related to the actuary's role. "This decision was made higher up," says Rep. Robert Matsui (D, Calif.), head of the Democratic Congressional Campaign Committee.

The debate comes as Republican leaders are struggling to win conservative support for a new budget plan for the coming fiscal year on the House floor next week.

"It is very disappointing," says Rep. Jeff Flake (R., Ariz.). Adds Rep. Benjamin Cardin, a Maryland Democrat: "There is an accumulation of items that adds up to a credibility gap. No one has a monopoly on the truth in a democracy and this administration has lost sight of that."

The significance of the June 20 e-mail exchange is twofold. First, it is the clearest written proof yet of the pressure put on Mr. Foster. Second, the messages clarify what information was being sought at the time by members of the House Ways and Means Committee.

The e-mail exchange begins with the actuary informing Mr. Scully of three information requests, one from a Republican and two from Democrats. Mr. Foster promises to provide advanced copies of "our intended response." The answer from Mr. Flick, then Mr. Scully's administrative assistant, says the answer to the first request, from House Republicans, can proceed. But the remaining two, both from Democrats, should be held until Mr. Scully authorizes the release.

"Tom was very explicit," writes Mr. Flick, who didn't return several phone calls.

The CBO is the official arbiter for the cost of all bills, and Mr. Scully has always insisted that Democrats were fishing for information no longer relevant to the legislation. But according to the e-mail exchange, one Democratic request dealt with one of the most important sections of the final legislation -- and the biggest single cost discrepancy between Mr. Foster's estimates and those of the CBO.

At issue is the so-called Medicare Advantage program, under which private health plans and health-maintenance organizations are promised increased reimbursements from the government as well as premium subsidies to help attract elderly patients. CBO was skeptical that these incentives would work, and therefore assigned a low cost to Medicare Advantage. Mr. Foster was much more bullish that retirees would sign up, but he warned that the result would be substantially higher costs because of the federal dollars needed to support the subsidies.

In traditional government-run Medicare, the beneficiary might pay 14% and Medicare 86%, for example. But under Medicare Advantage, the effective government contribution could be 90% or much higher in some markets.

As the debate proceeded last year, the White House and Republicans were selective about the numbers they made public. Mr. Foster's higher participation rates were frequently touted, but not the cost.

In fact, the final numbers released by the administration show the Medicare Advantage portion of the bill would cost $46 billion -- more than three times the $14 billion estimated by CBO. The Wall Street Journal reported last fall that internal administration estimates for Medicare Advantage were substantially higher than CBO, but Medicare officials, including Mr. Foster, said they didn't feel free to comment publicly, despite repeated requests.

Bruce Vladeck and Nancy-Ann DeParle, two former Medicare administrators who worked with Mr. Foster during the Clinton Administration, both expressed surprise at the threatening tone of the e-mail. Mr. Vladeck said he also received complaints on occasion from the Clinton White House about Mr. Foster's independence, but he said the actuary was also part of a larger "professional community" that includes members of congressional committees, like Ways and Means, with expertise in the health area.

When Mr. Vladeck named Mr. Foster to the job in the mid-1990s, he recalls, he told the career civil servant that the post was similar to that of a Supreme Court justice in its need to be independent of political pressure. Ms. DeParle also said that the "integrity of the office rested on its independence" and Mr. Foster had been subjected to an "odd, disturbing process."

 

Yep- Should have posted it under one of those other threads.

In my defense, I did look at all the thread titles on the first page before creating a new one.