Thompson Launches Inquiry Into Medicare Drug Bill Cost

Times Staff Writer

Noting that “there seems to be a cloud hanging over this department,” Health and Human Services Secretary Tommy G. Thompson on Tuesday ordered a formal investigation of allegations that the Bush administration withheld information about the cost of the Medicare prescription drug bill from members of Congress.

Thompson said his department’s inspector general would reconstruct events of last June, when the House and Senate were debating separate versions of the Medicare reform bill, to determine whether then-Medicare Administrator Thomas A. Scully threatened to fire Richard S. Foster, Medicare’s top financial analyst, if he shared his cost estimates with lawmakers.

The investigation also will examine whether information about the cost and potential impact of various provisions of the Medicare legislation was improperly withheld from Congress, Thompson said.

While they were debating the legislation, lawmakers used the administration’s estimate that the Medicare bill would cost $400 billion over 10 years. An administration document prepared in June, but not shared with Congress, put the cost of an early version of the legislation at $551 billion.

Thompson’s decision to order a formal investigation, which several Democratic lawmakers demanded last week, was part of an effort by the administration to regain control of the public political debate over the Medicare law and to restore its credibility, which also has been damaged by Democratic attacks on its media campaign to promote the law.


In a meeting with reporters, Thompson called on several of his top aides to defend the administration’s Medicare materials and answer questions about various Medicare-related controversies.

“We have nothing to hide,” Thompson said.

Some Democratic lawmakers welcomed news of the investigation. “The American people deserve to know the truth about how this breach of public trust could have occurred,” Senate Minority Leader Tom Daschle (D-S.D.) said.

But others said they were still waiting for specific information about the law’s cost and impact, including several matters they had asked about while the bill was being finalized and debated, and some information they had requested after President Bush signed the bill into law Dec. 8.

“Clearly, members [of Congress] were voting with less information than we now know was available,” said Dan Maffei, spokesman for Rep. Charles B. Rangel (D-N.Y.). “To this day, the administration is still less than forthcoming.”

On Feb. 3 and again on March 2, Rangel and other House Democrats wrote Thompson asking for information about the administration’s cost estimates. They have received no response.

In another indication that the administration may be responding to political pressure, Thompson announced the 13 members of a task force on drug importation, which he said would focus on whether prescription drugs could be imported safely and what procedures would be needed to make safe importation possible. In the past, administration officials have insisted that it was nearly impossible to certify the safety of drugs imported from Canada and other countries.

The task force, which will be chaired by Surgeon General Richard H. Carmona, will hold five “listening sessions” on the issue, the first one on Friday, and could finish its work as soon as this summer, Thompson said. Administration officials said previously that their study of drug importation, a requirement of the new Medicare law, would not be complete until December.

Several state governors, joined in the past week by a growing group of lawmakers from both parties, have harshly criticized the administration for refusing to consider ways to give American consumers better access to prescription drugs sold in Canada, where, because of price controls, drug costs generally are 30% to 70% lower than in the United States.

The AARP, a 35-million-member seniors organization whose support for the Medicare reform bill was crucial to its passage, also has pushed to legalize the reimportation of U.S.-made drugs from Canada.

Even as he announced the inquiry into the administration’s handling of Medicare cost estimates, Thompson downplayed the need for a formal investigation. Lawmakers who were working last fall on a compromise bill “knew that our estimates were higher” than the official $400-billion estimate, he said -- “not the exact amount, but higher,” Thompson said.

Although a June 11 administration document leaked to reporters in January pegged the cost for an early version of the bill at $551 billion over 10 years, Thompson said he did not see the administration’s final cost estimate until Dec. 23 or 24.

The administration reported in January that the bill could cost $534 billion over 10 years.

Thompson also tried to distance himself from the dispute over who was controlling the flow of information to Congress. “Tom Scully was running this, and Tom Scully made those decisions,” he said.

Scully did not respond to a telephone call, but in an interview Tuesday on CNBC’s “Capital Report,” he denied that he had threatened to fire Foster, and said that in three years he had interfered with only one congressional request for information -- on an issue in the House Medicare bill unrelated to the overall cost.

“We told everybody when Congress started writing their bill, ‘We think your bill’s going to be more.’ We didn’t know exactly how much.... Look, this is all politics,” he said.

Thompson blamed the Democrats for the dispute, saying, “There’s been an intentional attempt to demonize this bill from Day One, to demagogue it.”

The General Accounting Office, Congress’ investigative arm, concluded last week that the administration’s advertising campaign and fliers promoting the law were technically legal but contained “notable omissions and other weaknesses.” The GAO said Monday it would also investigate the legality of the administration’s “video news releases” about the Medicare law.

Thompson insisted that the controversies were “not damaging at all” to the administration’s credibility with seniors.

“When we roll out the [drug discount] card in June, people are going to be very appreciative,” he said. “This is an excellent bill,” especially for low-income seniors, he said.