Amid health reform, massive Medicare agency is still without a leader

The Centers for Medicare and Medicaid Services (CMS) will mark its third anniversary next month since the massive agency had a Senate-confirmed leader.
 
Nine months into his term, President Barack Obama has yet to nominate someone to head an agency that will play an enormous role in implementing any healthcare reform legislation Congress passes this year.
 

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The agency has 4,400 employees, a $676 billion annual budget and a duty to provide healthcare to 44.6 million people enrolled in Medicare, 51 million in Medicaid and 6.3 million in the Children’s Health Insurance Program (CHIP). In effect, the nation’s largest health insurer has been without a CEO for three years.
 
“It’s totally bizarre, what’s going on,” said Gail Wilensky, a senior fellow at Project HOPE who ran the agency for two years during the George H.W. Bush administration. “It’s a very bad situation, particularly in a year when healthcare reform is such a big issue.”
 
The leadership vacuum at CMS dates back to the George W. Bush administration. The last person to receive Senate confirmation as CMS administrator was Mark McClellan, who resigned on Oct. 15, 2006.

"We are working as fast as we can to find the right nominee for [the] CMS administrator position and expect to do very shortly," Jenny Backus, the acting deputy secretary for public affairs at the Department of Health and Human Services (HHS), said in a statement.
 
Since Obama took office in January, veteran CMS official Charlene Frizzera, the agency’s chief operating officer, has been filling in as acting administrator. Michelle Snyder, CMS's deputy chief operating officer and a long-time civil servant, is filling in as as acting deputy administrator, the agency's second-highest-ranking post. With no person formally holding the title of administrator, there is no one to serve as a spokesperson for the agency.
 
“If the administration is preparing to chart a new direction” in Medicare, said Alexander Vachon a healthcare consultant and president of Hamilton PPB, “that clearly is waiting until there’s a new administrator.” In the meantime, Vachon said, CMS abides by Isaac Newton’s first law of motion: An object at rest tends to stay at rest.
 
The job of CMS administrator, while little noticed by most Americans, is deeply rooted in the politics of Medicare and healthcare in general, which can draw out the process of selecting, vetting and securing confirmation for a nominee.
 
But unlike during the last administration, the party in power at the White House also controls the Senate, which should make the challenge of filling the job easier. “It seems odd, given that it’s a Democratic Congress. I don’t know what’s causing this very odd behavior,” Wilensky said.
 
In addition to CMS’s role as a kind of laboratory for healthcare policy and Medicare’s clout as a trendsetter in healthcare financing, the agency controls a huge swath of the American healthcare system as a payer and regulator. CMS revises the structure and rates of payments to every class of Medicare provider each year, with billions of dollars at stake each time.
 
The ongoing lack of political leadership also makes it harder for healthcare industry groups affected by CMS regulations to get their message to decision makers, Vachon said. “For lobbyists wanting to make the case for policy changes right now, that’s a tough thing to do without permanent leadership.”
 
During Obama’s transition period and the early months of his presidency, rumors about a number of candidates circulated among Washington’s healthcare insiders. The White House has remained mum and no clear leading candidate ever emerged.
 
The Senate Finance Committee and the House Energy and Commerce and Ways and Means committees, which have jurisdiction over CMS, did not respond to requests for comment.
 
Finance Committee ranking member Chuck Grassley (R-Iowa), however, lamented the lack of political leadership at the agency.
 
“It’s hard to believe that an agency in charge of so many functions and in control of billions of tax dollars has had acting administrators for three years,” Grassley said in a statement. “An acting administrator, no matter how qualified, just doesn’t have the standing to change and improve operations. The agency needs a leader, not a caretaker. … And a president has an obligation to find qualified people as quickly as possible.”
 
President George W. Bush’s last nominee for the job languished with “acting” prefixed to his job title for more than a year as the Democratic Senate declined to even vote him out of committee. Even the highly respected McClellan had to overcome holds – not always on related issues -- from Sen. John McCain (R-Ariz.) and others before winning confirmation in 2004.
 
The Obama administration has filled every other marquee position at HHS. After former Sen. Tom Daschle (D-S.D.) was forced to give up his nomination to be HHS secretary due to revelations of unpaid back taxes, Obama tapped then-Kansas Gov. Kathleen Sebelius (D) for the post.
 
Though Sebelius underwent a somewhat grueling confirmation process, the Senate endorsed her for the job on a 65 to 31 vote in April. Food and Drug Administration Commissioner Margaret Hamburg, Centers for Disease Control and Prevention Director Thomas Frieden, and National Institutes of Health Director Francis Collins each easily won confirmation.
 
But CMS has been left behind. During the George W. Bush administration, CMS went without a Senate-confirmed administrator for a total of 31 months, including the last 27 months of his term. Bush nominated Kerry Weems, a career HHS official, to the position in May 2007 but the Senate never took up his nomination. Leslie Norwalk, the agency’s deputy administrator, helmed CMS for nine months before that.
 
Weems' 16-month tenure as acting CMS administrator is the longest in the 32-year history of the agency, which was called the Health Care Financing Administration until 2001. Only one other time did the agency lack a Senate-confirmed administrator for more than a year: during the end of the George H.W. Bush administration and the beginning of the Clinton administration, when William Toby was acting chief for 13 months.
 
Weems' prospects were damaged by bitter political fighting between the Democratic Congress and the Bush White House over CHIP. Congress twice passed legislation to expand the program but Bush vetoed the bills. Democrats were also angered by CMS taking administrative actions to slow expansions of the program by states, Grassley noted.
 
The sprawling agency’s largest components are three centers: One that concerned with traditional Medicare; one that oversees private Medicare Part D prescription drug and Medicare Advantage insurance plans; and one that runs Medicaid and CHIP.
 
The administration has made political appointments to two of the top CMS positions below the administrator but a third remains vacant.
 
Jonathan Blum, a former aide to Finance Committee Chairman Max Baucus (D-Mont.), is director of the Center for Medicare Management and the acting director of the Center for Drug and Health Plan Choice. Cindy Mann, who worked on Medicaid issues during the Clinton administration and was a professor at Georgetown University, is director of the Center for Medicaid and State Operations. Those posts do not require Senate confirmation.

"We have been very lucky to have two terrific health policy leaders running Medicare and Medicaid," said Backus, who noted these officials oversaw the distribution of HHS's economic stimulus funds to states and beneficiaries.