HHS Secretary Seeks Probe of Medicare Actuary Claims

Posted March 16, 2004 at 5:28pm

Health and Human Services Secretary Tommy Thompson has asked his department’s inspector general to look into allegations that a Medicare actuary’s job security was threatened if he shared his cost estimates with Congress.

But Thompson rebutted Democratic criticism that a series of HHS video news releases on the new Medicare prescription drug benefit ran afoul of federal laws prohibiting the dissemination of “covert propaganda.”

Speaking with reporters on Tuesday, Thompson said “there seems to be a cloud over this department” because of the actuary’s allegations that then-Centers for Medicare and Medicaid Services Administrator Tom Scully had threatened to fire him if he shared some cost estimates on the Medicare drug bill with Congressional Democrats.

Both Republicans and Democrats on Capitol Hill have expressed concern that the administration may have been purposely trying to keep the higher cost estimates of the drug bill a secret until after both chambers voted on the bill, because they were aware of Member concerns about the ultimate cost of the bill.

The Congressional Budget Office has continued to insist on its original estimate of $395 billion for the drug bill. Meanwhile, the White House-run Office of Management and Budget revealed in December that they believed the actual costs would be closer to $530 billion.

Thompson’s chief of staff, Scott Whitaker, said he talked to the actuary, Rick Foster, last June about the reports. Whitaker said he assured Foster at that time that his job was not in danger and told Scully that the threats were not appropriate.

Still, Thompson said he wanted the inspector general to look into the allegations “to find out that all of the facts that we have just outlined are correct.”

Thompson said the IG would likely look not only at Scully’s alleged threat, but also at whether the administration improperly withheld its estimates on the bill from Congress.

Senate Minority Leader Tom Daschle (D-S.D.), who had called for an investigation of Foster’s claims on Friday, appeared pleased.

“This is a welcome acknowledgement that the administration’s credibility has been badly damaged by this scandal and that an independent investigation is needed to uncover the nature and extent of the misconduct,” said Daschle spokesman Todd Webster.

Meanwhile, Thompson responded to Democratic complaints about the video news releases, saying his department’s use of pre-packaged news segments was common practice in government and showed examples of Clinton administration video press releases.

One of the Clinton administration releases featured then-HHS Secretary Donna Shalala talking about the benefits of the Clinton prescription drug plan — as well as shots of pharmacies and senior citizens.

That is strikingly similar to the Bush administration video news release that features Thompson and background footage of a pharmacy and senior citizens.

Similar to the current administration’s video news release, the Shalala piece ends with a woman saying, “Labelle Brigham reporting.” The Thompson release has a woman saying, “In Washington, Karen Ryan reporting.”

Kelly Keane, assistant secretary for public affairs at HHS, noted that the Clinton administration video news release uses language similar to the Bush administration when describing Clinton’s Medicare proposal as a “plan to strengthen and modernize Medicare.”

The primary difference between the two videos is that the Clinton administration first identifies their release as coming from HHS. The first words on the screen are, “This tape is provided by the U.S. Department of Health and Human Services for your free and unrestricted use.”

The Bush administration video begins with the words, “Government Answers Questions about the New Medicare Law.” Beneath that are the words, “Same Medicare with New Benefits.”

HHS spokesman Bill Pierce said the similarities prove that the department is not using its communications power improperly.

“Ours is a lot more tame,” he said, comparing the two video news releases. “We clearly identify who we are. Besides, the decision is left up to the television stations on whether to run it or not.”

The General Accounting Office agreed on Monday to probe whether the Bush administration releases violate federal laws against disseminating propaganda. Last week, they ruled that paid Medicare advertisements produced by HHS did not run afoul of the law.

CLARIFICATION: Articles in the March 16 and 17 editions of Roll Call about the Medicare probe appeared to quote federal law as prohibiting the use of federal funds to pay for “covert propoganda.” The law prohibits funds used for “publicity and propoganda,” while the General Accounting Office has ruled that materials that run foul of the law include “covert propoganda, that is, materials that ‘are misleading as to their origin.'”