!! History Commons Alert, Exciting News
Profile: Thomas A. Scully
Thomas A. Scully was a participant or observer in the following events:
Thomas A. Scully is sworn in as head of the Health Care Financing Administration (HCFA), a division of the US Department of Health and Human Services. Prior to joining the Bush administration, Scully served as president and chief executive officer of the Federation of American Hospitals, a trade association that lobbies on behalf of 1,700 privately-owned and managed community hospitals and health systems. He held that position for six years [Healthcare Financial Management, 7/2001; US Department of Health and Human Services, 11/10/2003] and was making $675,000 a year when he left. As the administrator of HCFA, he will be paid a salary of $134,000 a year. [New York Times, 12/3/2003] During his confirmation hearings, Scully promised the Senate Finance Committee that he would “aggressively enforc[e] the fraud statutes.” Under the Clinton administration, the Justice Department had brought a number of lawsuits against hospitals alleging that they had over billed Medicare, Medicaid, and other federal heath programs. [Iglehart, 12/27/2001]
Thomas A. Scully, administrator of the Centers for Medicare & Medicaid Services (CMS), tells Congress that he believes only a third of the estimated $12 billion in improper payments to health care providers is fraudulent. He says “the rest is
probably billing mistakes.” Scully, a former lobbyist for the health industry, admits the inspector general would probably disagree with his estimate. [US Congress, 7/26/2001, pp. 27 ]
HCA, the country’s largest for-profit hospital chain, announces that it has struck a deal with the Centers for Medicare & Medicaid Services (CMS) over unaudited Medicare and Medicaid billings.
The company—which paid more than $840 million in criminal fines, civil penalties, and damages in 2000 for fraudulent reportings to Medicare (see December 14, 2000), and which is still being investigated—will pay CMS $250 million to zero out its account with the agency. [Associated Press, 3/28/2002] But according to numerous government whistle-blowers, the amount is far too low. In a letter to the Department of Health and Human Services, Senator Charles E. Grassley (R-IA) will later accuse Medicare officials of “seeking to allow HCA to resolve more than $1 billion of liability to the Medicare program for only $250 million, based on little to no evidence supporting this low figure.” Even more troubling, notes the Senator, Medicare has agreed not to audit the company’s cost reports that have been piling up since 1997 when the agency stopped processing HCA bills because of the lawsuit. “One would expect a company with such a track record to be subjected to heightened scrutiny.… [Instead,] the Centers for Medicare and Medicaid Services is proposing to excuse HCA from an even routine review of thousands of Medicare cost reports,” Grassley writes. He says the deal is “too lenient.” John R. Phillips, one of the attorneys involved in the lawsuit against HCA, later says the deal was quietly arranged between HCA and CMS head Thomas A. Scully. “The $250 million was a total sellout by Scully, who totally negotiated it behind Justice’s back,” he says. [New York Times, 11/19/2002] Similarly, Grassley, in a June 25 letter to a Justice Department lawyer, says comments by Scully “have given me great concern that there is an active, ongoing effort underway to change or modify enforcement [on Medicare fraud] policy that in my view could significantly undermine the [law].” [Office of Senator Charles Grassley, 7/25/2002] Scully, during his confirmation hearings, had pledged he would “aggressively enforc[e] the fraud statutes” (see May 29, 2001).
Thomas A. Scully, administrator of the Centers for Medicare & Medicaid Services (CMS), warns Richard S. Foster, the agency’s top expert on Medicare costs, that he will be fired if he responds to Congress’s request for a cost estimate on the drug plan favored by the administration. Foster estimates that the plan will cost $534 billion over the next 10 years. This amount is roughly a third more than the $400 billion estimate that was provided to legislators by the Congressional Budget Office. The White House knows about Foster’s cost estimate but fears that if Congress obtains this information, it will not pass the drug plan. Several conservative House Republicans have said they will not vote for the bill if it exceeds $400 billion. Foster’s estimates are shared with Doug Badger, the president’s special assistant for health policy, and with James C. Capretta, associate director of the White House Office of Management and Budget. Scully instructs Foster that all cost estimates must first be submitted to him so he can decide whether they should be released. “More than once, Tom said he was just following orders,” Foster later tells the Washington Post, adding that he suspects the orders were coming directly from the White House, probably from Badger. On other occasions, when Foster is talking to lawmakers over the phone, White House officials are routinely on the line monitoring his comments and in some instances they instruct Foster not to respond to lawmakers’ questions, according to an unnamed congressional Democratic aide. It is not until January 2004, after the drug bill is passed, that the White House finally releases Foster’s estimates. [Knight Ridder, 3/12/2004; Washington Post, 3/13/2004; New York Times, 3/25/2004; US Department of Health and Human Services, 7/6/2004 ; New York Times, 7/7/2004] Several Republicans later say they would not have voted for the program had they known its true cost. [Savage, 2007, pp. 116]
At the same time top Medicare official Thomas A. Scully is working with Congress to draft new Medicare legislation, he is looking for a private sector job that will pay him to advise clients affected by the very same Medicare program he is helping to draft. The fact that Scully’s job search is taking place at the same time he is working on legislation, raises concerns that his contributions to the bill are potentially being influenced by his own private interests. Scully insists however that he is complying with all federal ethics regulations and says he has a waiver from the department’s general counsel permitting him to seek work in the private sector. By December he has narrowed his list of prospective employers to five companies: Alston & Bird; Baker, Donelson, Bearman, Caldwell & Berkowitz; Ropes & Gray; Welsh, Carson, Anderson & Stowe; and Texas Pacific Group. All of the companies have clients in the health care industry. Scully, who made $675,000 a year as a lobbyist before taking his current position in the government at $134,000 a year, is expected to make a hefty salary in the private sector with his insider knowledge of the new Medicare program. “His exhaustive knowledge of the Medicare program and the intricacies of the legislation, approved by Congress last week, would make him a prize catch for any law firm or private equity firm,” notes the New York Times. Scully will resign on December 16, less than a month after Congress passes the Medicare bill. [Washington Post, 12/3/2003; New York Times, 12/3/2003]
Thomas A. Scully resigns as head of the Centers for Medicare & Medicaid Services (CMS)(formerly called the Health Care Financing Administration (HCFA)). [Washington Post, 12/3/2003] For the last six months Scully, a former lobbyist for the health care industry, has been shopping around for a job in the private sector hoping to find a firm that would hire him to advise clients affected by the new Medicare program that he helped draft (see June-December 2003). Shortly after resigning, Scully is hired by Alston & Bird LLP to help the law firm build a health practice in their Washington office. He also lands a second part-time job with Welsh, Carson, Anderson & Stowe, a New York investment firm specializing in telecommunications and health care. [Washington Post, 1/14/2004]
Conservatives for Patients’ Rights logo. [Source: Conservatives for Patients? Rights]An organization called Conservatives for Patients’ Rights (CPR) publicly takes credit for orchestrating the disruptive and sometimes-violent protests against the White House’s health care reform proposals (see June 30, 2009, July 6, 2009, July 25, 2009, July 27, 2009, July 27, 2009, July 31, 2009, August 1, 2009, August 1, 2009, August 2, 2009, August 3, 2009, August 3, 2009, August 3, 2009, August 3, 2009, August 4, 2009, and August 4, 2009). Washington Post reporter Greg Sargent says the admission “rais[es] questions about [the protests’] spontaneity.” CPR is headed by Rick Scott, a former health industry CEO who once ran Columbia/HCA before being ousted for malfeasance in 1997. (Columbia/HCA subsequently paid the US government $1.7 billion dollars in fines due to fraud that occured during Scott’s tenure.) Scott, who was once a part owner of the Texas Rangers with George W. Bush, now owns an investment firm that primarily traffics in health care, and owns a chain of Florida urgent care clinics called Solantic. [Washington Post, 5/10/2009; Plum Line, 8/4/2009] (Solantic also boasts former Bush administration official Thomas Scully as a member of its board. In 2004, Scully deliberately withheld information from Congress that the Bush administration’s Medicare reforms would cost $200 billion more than acknowledged.) [MSNBC, 8/7/2009]
Contracting with 'Swift Boat' PR Firm - Scott is spending millions on CPR’s public relations effort, and has contracted with CRC Public Relations, the group that masterminded the “swift boat” attacks against 2004 Democratic presidential candidate John Kerry. He is also coordinating his efforts with Grover Norquist, the conservative advocate and influential Washington insider. CPR spokesman Brian Burgess confirms that CPR is e-mailing “town hall alert” flyers and schedules of town hall meetings to its mailing list. CPR is also actively recruiting members for the “tea party,” a loosely organized group of conservative protesters (see April 8, 2009). Scott says, “We have invested a lot of time, energy, and resources into educating Americans over the past several months about the dangers of government-run health care and I think we’re seeing some of the fruits of that campaign.” Doug Thornell, a House Democratic staff member, says: “The more you dig the more you learn that this is a carefully orchestrated effort by special interest lobbyists and the Republican Party, who are using fringe elements on the right to protect insurance company profits and defeat health care reform. The anger at these events looks very similar to what we saw at McCain/Palin rallies in the fall.” [Washington Post, 5/10/2009; Plum Line, 8/4/2009]
Group Interested in Protecting Industry Profits, Critics Say - Richard Kirsch of Health Care for America Now, a pro-reform group, says of Scott: “Those attacking reform are really looking to protect their own profits, and he’s a perfect messenger for that. His history of making a fortune by destroying quality in the health care system and ripping off the government is a great example of what’s really going on.” CPR plans on spending over $1 million a month in anti-reform television and radio ads. [Washington Post, 5/10/2009] White House press secretary Robert Gibbs, learning of CPR’s admission, says the organization is led by a “CEO that used to run a health care company that was fined by the federal government $1.7 billion for fraud. I think that’s a lot of what you need to know about the motives of that group.” Scott retorts, “It is a shame that Mr. Gibbs chooses to dismiss these Americans and their very real concerns, instead opting to level personal attacks.” [San Francisco Chronicle, 8/4/2009]
Entity Tags: Greg Sargent, Doug Thornell, Columbia/HCA, CRC Public Relations, Brian Burgess, Conservatives for Patients’ Rights, Solantic, Thomas A. Scully, Rick Scott, Richard Kirsch, Obama administration, Robert Gibbs, Grover Norquist, Republican Party, Medicare
Timeline Tags: US Health Care, Civil Liberties, Domestic Propaganda, 2010 Elections
Receive weekly email updates summarizing what contributors have added to the History Commons database
Developing and maintaining this site is very labor intensive. If you find it useful, please give us a hand and donate what you can.
If you would like to help us with this effort, please contact us. We need help with programming (Java, JDO, mysql, and xml), design, networking, and publicity. If you want to contribute information to this site, click the register link at the top of the page, and start contributing.