OIG clears Scully of wrongdoing

July 12, 2004 WASHINGTON - An OIG investigation confirmed last week that former CMS Administrator Tom Scully warned CMS's chief actuary, Richard Foster, that he would be disciplined if Foster submitted certain cost estimates to Congress regarding the cost of the Medicare Prescription Drug Act. The investigation, however, turned up no evidence that withholding the information broke criminal laws. The OIG further said that Foster had no legal authority to disclose information independently to Congress, and that Scully had the final authority to determine the flow of the information. The controversy surrounding the act arose over a cost analysis prepared by Foster that showed that the Medicare Prescription Drug Act would cost $100 billion more than the $400 billion price tag bandied about before the bill's passage. After the bill's passage, Foster claimed that Scully threatened to fire him if he revealed the inflated price tag. The Office of the Inspector General cited CMS for failing to provide "premium estimates" of the cost of the Medicare Prescription Drug Act in its investigation of the issue released last week. Many fiscal conservatives said they would not have voted for a measure that exceeded $400 billion. After the bill passed, the Bush administration admitted that the new Medicare Drug law was actually going to cost $534 billion. The Congressional Research Service in May reported to Congress that the Bush administration broke the law by not disclosing information regarding the true cost of the bill.