OIG Investigates MMA Cost Estimate

In mid-March, Health and Human Services Secretary Tommy Thompson asked the HHS Inspector General to investigate allegations by Richard Foster, CMS’ chief actuary, that he was told to withhold higher cost estimates of the Medicare Modernization Act (MMA) when it was under consideration by Congress last year.

Shortly before the House of Representatives passed the measure in late November, lawmakers received a Congressional Budget Office cost estimate on the legislation of $395 billion over 10 years, an estimate the CBO continues to stand behind. But in its 2005 budget, the Bush administration pegged MMA’s cost at $534 billion over 10 years.

House lawmakers called for an investigation of the matter following a published report that Foster had been told by then-CMS Administrator Tom Scully to keep quiet about the law’s higher costs, which he had estimated in the $500 billion to $600 billion range. In late March, according to a BNA report, Foster told the House Ways & Means Committee that he considered resigning after being told to withhhold the figures. Foster said CMS Deputy Administrator Leslie Norwalk told him Scully’s order was legal because each branch of the federal government is allowed to make its own cost estimates under the separation of powers clause in the United States Constitution.

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