HHS: Scully pressured Foster to withhold Medicare reform costs

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Former CMS Administrator Tom Scully did threaten Centers for Medicare & Medicaid Actuary Richard Foster with dismissal if he revealed his cost projections for the Medicare reform bill, but in doing so Scully did not commit criminal violations, according to the Health and Human Services inspector general's office.

The Medicare Modernization and Prescription Drug Act passed with bipartisan support in December 2003 under the assumption it would cost $395 billion over 10 years -- estimates put out by the Bush administration.

Foster quietly estimated that the bill would cost $524 billion over 10 years. Though Congressional Democrats repeatedly requested the estimates from Foster, he did not reveal them. The Bush administration later said Foster's higher estimate was correct.

More than a dozen Republicans had said they would not approve legislation if the costs exceeded $400 billion.

Scully left CMS to join the law firm Alston & Bird, based in Washington D.C. Sources close to the investigation told Modern Healthcare that since the inspector general would not recommend administrative action against him because he's no longer a federal employee.