July 06,2004

Health and Human Services Inspector General Report on Foster, Scully


TO: Reporters and Editors
RE: HHS IG Report on Foster and Scully
DA: Tuesday, July 6, 2004

Sen. Chuck Grassley, Chairman of the Senate Committee on Finance, issued thefollowing comment about the report of the Inspector General released today by the Department ofHealth and Human Services regarding the Medicare Chief Actuary and the former Administratorof the Centers for Medicare and Medicaid Services.

"This report of the Inspector General determines important facts for the public record,including that there was no violation of civil or criminal law, although in my opinion,Administrator Scully's conduct with respect to Rick Foster was inappropriate.

"I also look forward to seeing a legal determination from the General Accounting Office.

"During a Finance Committee meeting with Rick Foster on June 24, he acknowledgedthat his office did not complete a full cost estimate of the Medicare bills last year. So, there wasno full cost estimate to withhold from Congress. In fact, the true cost estimate as far as Congressis concerned is that of the Congressional Budget Office. We're required by law to abide by thecost estimates prepared by the Congressional Budget Office, and that cost estimate was availablefor everyone's review before the vote. The Medicare actuary also told the Finance Committeeand the Inspector General that the HHS Secretary's chief of staff called him as these events wereunfolding last year to let him know that he had the Secretary's full support. So, it doesn't appearthat Rick Foster was under a real threat of termination given the assurances he had fromSecretary Thompson."